As a tool, crowdfunding has helped millions of startups and small businesses raise the capital they need to find success. By definition, it’s a method of raising capital through the collective effort of friends, family, customers, and individual investors. This approach taps into a large pool of individuals—primarily online via social media and crowdfunding platforms—and leverages their networks for greater reach and exposure (courtesy of fundable.com).
But it’s more than money raised – the moving parts involved in crowdfunding and how you deal with them, will determine whether or not you’ll run a successful campaign. This week’s Alloy 26 Lunch and Learn highlighted our members at Leaf Shave and the incredible journey they took to surpass their goal and raise $115K. If you’re considering running a crowdfunding campaign, take some advice from Adam Simone at Leaf Shave:
“The most important piece of the compound word ‘crowdfunding’ is ‘crowd.’ So my number one piece of advice to folks looking at this route for their project is to measure every decision they make against how well it is serving their backers. As long as they do that, the wisdom of the crowd will work its magic.”
Not only has Leaf Shave found success while working in Alloy 26, our members at Switcheroo recently launched their first Kickstarter Campaign and reached their goal to raise $25K in just 10 days! What advice does Mike Neilson, CEO of Switcheroo, have for us?
“The best advice that I have learned from my experience so far is to build a strong network of family, friends, and fans to help spread the word when your campaign launches. Having that initial push at the start of the campaign is critical to reaching the fundraising goal.”
There’s still time to back Switcheroo and support lighting made easy. Check out their link now through February 8: https://www.kickstarter.com/projects/neilson/switcheroo-lighting-made-easy.
With the help of Leaf Shave, we’ve outlined 5 steps for launching a non-equity crowdfunding project for a physical product. Check it out below!
There is no such thing as being overprepared when it comes to launching your crowdfunding campaign. Knowing your numbers and doing your research – i.e. the cost for manufacturing, logistics, shipping, refund strategies, fees, and how long you want to run your campaign are key factors to a successful run.Start to build your email list and warm up your audience by bringing family, friends, acquaintances up to speed with your project. MailChimp is an easy-to-use email marketing tool to reach your audience in an effective way. And, be patient – a timeline you set for yourself in the beginning may not stay the same throughout. Need help growing your list? Look into paid Facebook and Instagram ads.
Make sure you know what you plan on using the capital for. Is it for production, testing your products, learning about your customers? Is it going to be used to ultimately launch a business? These factors will help you form your story.
Each platform is unique and comes with its own fees and deals to help you grow. Depending on your product, you may find competition on platforms with entrepreneurs funding similar ideas or you may be the lone product. Knowing your strategies and strengths will help with your decision.
How good should your campaign look? Know your brand and roll with it on all collateral material. This includes your video, which is key to a successful campaign – people like stories and visualizations are extremely helpful. Make sure to keep it short between 1.5 and 3 minutes. Rotate your Facebook and Instagram Ads to keep the reach fresh.Getting Press – local press can give legitimacy to your company. But it does not guarantee a pledge.
Projects on Kickstarter will only be funded if they reach their goal – it’s all or nothing. If you hit 30% of your goal within the first few days, statistically you’ll have success. Your launch date matters, so look for similar products with similar launch days, be flexible and understanding. A typical launch lasts 30 days – but you’re the expert of your product and can control the timeline.Don’t forget to utilize your email list and communicate with your supports from beginning to end.
Fun Fact: The Pittsburgh market for Kickstarter campaigns has grown significantly in the past 5 years boasting 1,536 campaigns, 142,917 backers, and over $8.9 million raised.
So, now do you think you’re ready to launch your campaign? 2017 could be your year.