Crowdfunding is a great way to earn money for a project, product or personal business venture. Are you considering launching a crowdfunding campaign? Here are some tips to help you complete your project.
1. Choose the platform on which to launch your crowdfunding campaign:
Many platforms offer the possibility of launching a crowdfunding campaign. However, not all are equal and you should carefully choose the one that is best for your project.
Before you start, we recommend that you compare platforms on 3 criteria:
- The types of financing proposed
- The success rate of the platform
- The audience of the platform
Types of financing proposed:
The choice of the type of financing is a natural selection criterion. Indeed, there are 3 types of crowdfunding: donations, investments, and loans; and crowdfunding platforms usually only offer one or two types of funding only.
Depending on the type of financing desired, you will be able to easily eliminate a part of the platforms.
The success rate of the platform:
The second criterion to take into account is the success rate of the platform: out of 100 crowdfunding campaigns launched on the platform, how successful are they in reaching their financing objective?
Rather than looking at the overall success rate of the platform, we recommend that you refine your analysis by considering only projects similar to yours both in terms of the business sector and size of funding.
Indeed a platform can have a very different success rate depending on whether you wanted to raise € 5,000 for an art project or € 50,000 for a company.
The audience of the platform:
The last criterion is the audience of the platform. The audience is vital because the success of your campaign depends directly on your ability to get people talking about you in order to attract as many contributors as possible.
We recommend analyzing the audience based on 3 criteria: the number of active contributors on the platform, the number of Facebook subscribers, and the number of Twitter subscribers.
If the amount you want to raise is important, also consider the average amount invested by contributors.
2. Anticipate the cost of the crowdfunding campaign
Launching a crowdfunding campaign requires a real budget. The realization of the project presentation video, press releases, and the digital content necessary to promote your crowdfunding operation have a cost that should be anticipated. Added to this are the costs of the platform and, depending on the type of financing desired, any legal fees or audit.
3. Prepare the promotional content of the campaign in advance
The success of your crowdfunding campaign depends on your ability to build momentum around it. Prepare your promotional material in advance - video, content to relay in social networks, email campaign, etc. - will allow you once the campaign launched to devote all your time trying to make people talk about you.
4. Reach a high funding rate quickly
The funding rate of the campaign creates positive social pressure around your project. The idea is quite simple: a high funding rate shows that people believe in your project, which helps to reassure the most undecided potential contributors, and to convince them more easily to participate in the project. To reach a high rate of financing very quickly, the best technique is to secure some of the financing upstream of the launch of the crowdfunding campaign. This will allow you to quickly increase the funding rate of it and thus increase your chances of success.
5. Create a tempting rewards structure
If you use donations, you'll have to think about the rewards for contributors. Ideally, your structure will have to encourage as many contributors as possible to participate, even for small amounts, and encourage contributors to be generous by offering very attractive rewards for the biggest contributions.
6. Choose carefully the duration of your crowdfunding campaign
The campaign should be long enough to allow you to create momentum to reach enough people to raise the desired amount. But not too much so that the campaign gets bogged down and the momentum disappears.
In addition, it is also quite common that a large part of the contributions arrives at the last minute. In this context, choosing a fairly short campaign time can be beneficial because it prevents your prospects from taking too much time to decide whether or not to participate.
7. Communicate with your network upstream and during the crowdfunding campaign
Your loved ones and the people in your network will be your first promoters. Contact them well in advance of the launch of your crowdfunding campaign so that they are ready when the time comes to give you a boost by talking about it around them.
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