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If you build it they may fund
Crowdfunding has gained popularity in recent years, providing entrepreneurs the opportunity to have their projects financially supported by a group of people.
According to Indiegogo, “Crowdfunding is the process of pooling money from many different people to make an idea happen.”
There are several crowdfunding sites in the U.S. but two of the largest are Kickstarter.com and Indiegogo.com. Since its creation in 2009, Kickstarter has funded over 71,000 projects, equating to more than $1.3 billion. Indiegogo has over 15 million visitors to their site daily and allows international campaigns.
Campaigns’ missions can vary from publishing books to funding a yoga website.
To improve your campaign’s success, there are several steps and a lot of research that needs to be done.
5 Tips for Creating a Successfully Crowdfunded Campaign
Start with a Plan: Successful campaigns take time, planning, and a lot of follow-up. Have materials ready to go, rewards planned out, and figures recorded for your funders to see when the campaign goes live. It's also important to plan your budget. Take into account the cost of rewards, shipping, the project budget, and fees from the crowdfunding site will take as well as your credit card processor— Indiegogo charges a 9 percent fee if you choose the "Flexible Funding" scale. If you reach your goal, you get 5 percent back. If you choose the "Fixed Funding" scale, they apply a 4 percent fee. If you do not make your goal, no fees are charged. Kickstarter collects a 5 percent fee to the funds raised, if funding isn't successful, they do not collect fees.
Get Offline: A crowd-funded project or product sees much greater return when its creators A) reach out to investors before the project launches and B) create events and meetups to support the campaign in an offline setting. Use networking to amp up excitement and find backers. As a campaign creator, you are your best marketing tool. Talk to people face-to-face and create a solid support system that share your message.
Share your Personal Story: Backers get excited about passion. Create your video to show your love for your idea as an entrepreneur. Provide perks that get your backers excited about the product: early sampling, beta testing a site before it launches, bonus materials others will not have access to. Sharing your passion not only through your story, but directly with those individuals funding your campaign, can make a huge difference.
Provide Stellar Customer Service: Respond to feedback from your backers. They can provide so much more than capital to your campaign. Ask for feedback and when you get it, which you will, respond with adjustments to your marketing plan, rewards, user experience interface and product costs. Setting that precedent will pay off when you start selling your product or it's up and running full-time.
Set your Goal as Low as You Can Go: How low can you go? This funding is important to your project’s success. It is important to be realistic with your expectations. Budget what amount of funding your business needs, what fees your crowdfunding platform and credit processing company will take once the project is finalized, and what your rewards will cost. Then don’t add anything more. Especially when working with Kickstarter, who is an all-or-nothing platform, asking for more than absolutely necessary can hurt the success of your project. For more tips from Kickstarter, read through their "Creator Handbook" that is available at Kickstarter.com for free.
Indiegogo provides a free, downloadable version of their "Field Guide." Find it at landing.indiegogo.com/iggfieldguide/
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