Crowdfunding is the ultimate expression of connection and democracy. The Internet allows this phenomenon to continuously grow. Crowdfunding means people contributing money to a certain project, be it a show, event, cause, business, game app, etc. There are usually rewards for the backers: they get promotional materials, or to try out beta-versions of the product, and if it is an event, they get exclusive backstage access.
In this way, the creator of the project raises capital to actually do it, and the contributor gains the rewards for supporting a project he or she believes in. Sounds too good to be true? Well, there’s a catch. In order for the project to actually raise money, it needs to follow certain guidelines. Here are the 7 best practices for running a successful crowdfunding gig.
Recommended Reading: Ultimate Guide To Crowdfunding Success
1. Build It Before Launching
Many crowdfunding campaigns go under because they fail to lay the ground work before introducing their project to the masses. You want to have a social presence. Either a Facebook, Twitter, or YouTube account already in place.
Have your own website describing the project you’re doing. This will help you harness the power of your audience for getting the campaign off the ground and it also helps people who don’t know you to trust you more.
Nobody likes giving money away for no reason, so having your name and your campaign’s site pop up on Google when a potential pledger is searching for you outside the crowdfunding site will help build trust in your project.
2. Know Your Target Audience
There are tons of crowdfunding sites out there. Know which site your potential pledgers (the people contributing to your project) are browsing. That means understanding each site’s audience. Look at what sort of projects are featured on the homepage, and what campaigns are most successful on the site.
If a certain site raises the most money for music projects, and you are doing a piano recital, that’s the place for you. If you have a cause awareness campaign, you should check out Razoo or RocketHub. Go for the ol’ behemoth KICKSTARTER for projects involving tech. On the other hand, appsplit, the first app crowdfunding site launched in 2010, is great for mobile development.
Reminder: Make sure you read the terms and conditions for the site you choose. Some take a significant portion of the money gathered and/or require you to be a US citizen. Others have more relaxed terms.
3. Storytelling and Psychology
Believe it or not, the crowdfunding model is older than the Internet. During the 19th century, newspaper publisher Joseph Pulitzer (yes, the inventor of Pulitzer Prizes) raised more than $ 100,000 in six months. The goal? The pedestal restoration of the Statue of Liberty, which resulted in 125,000 people pledging towards it. Why? Because they cared and could identify with the story.
Most people browsing KICKSTARTER are looking to support things they believe in or care about. There are also certain psychological trends all humans fall into. Tony Robbins talks about this in an awesome TED talk.
How To Tell A Story
Think about this when you’re presenting your project’s story. Remember to make it emotional. The 6 keys elements you’ll need to address in your overall project presentation are Certainty, Variety, Significance, Love & Connection, Growth and Contribution.
Most of the people want all of those things, so talk about them. The trick is to convey the ideas to the eventual pledger by hinting at them. Make sure they get it within the first minute. Let’s say, I’m trying to raise money for a social job platform for Android. Here’s an intro that works well:
“My project is certainly significant because we are trying to connect young people with their potential future jobs, contributing and improving to the overall employment rate here in Romania. We will impact more than 10,000 people in the first 4 weeks, and with a minimum conversion of 2%, our app is bound to drastically change the lives of 200 people”
The combination of real numbers, overall tone and the 6 elements make for a compelling story. What takes it to the next level though is the human element involved.
4. Video? 100% Yes!
What better way to tell a story than through video? Having a video for your project is an absolute must. “More than 50 percent of crowdfunding projects with a video are successful. Conversely, only 30 percent of those without a video succeed.” says Kendall Americo, CEO of ClickStartMe.
First, let the viewer know who you are, then jump right into the story. Your video should have a catchy title such as: “Would you save the app world with me?” as opposed to “New app to be launched soon”. The story being told should be short and precise.
You need to convey the following:
- Who you are
- How your story is connected with the 6 key elements
- What the rewards for the contributor are
- Asking exactly for what you want and explaining where the money will go
- Thanking everybody in advance, already assuming they’ve pledged
Consider making a professional video as an investment and if you’re not comfortable with your accent, maybe hire a voice talent.
5. Lots of Rewards
Rewards are awesome and offering them is a no-brainer. Try giving rewards, for even the smallest of donations. Here are a few ideas:
- Behind-the-scenes photos or videos
- Autographed materials, photos, t-shirts, mugs and other souvenirs
- Including the pledger in the product’s credits
- The actual product (free or largely discounted)
- Invitation to launch parties, events, social gatherings
- Unreleased beta-versions of the product
- Including the pledger’s name within the game/product
- Access to the team or one-on-one talks with you
- Direct involvement in the script/features of the campaign
6. The Inner Circle
Competition for funds is fierce nowadays. That’s why you’ll want to make sure you have a few friends or family members as first investors. People often imitate others in order to belong to a tribe. Take advantage of this “group mind” by planting the first seed yourself. Once you have your 1st round backers, others will come.
7. Get the word out
The Internet is full of blogs and publications about every topic under the sun. Immediately after your campaign starts to grow, contact as many as possible. Once you reach your first milestone, your project can become a story. Especially if you are raising money for a cause.
Media attention spreads like wildfire if it’s an interesting project. Best to not contact anybody on launch day and wait until you hit your first milestone. That will prove some interest in your idea and you’ll be more likely to score an article.