Most entrepreneurs have heard of crowdfunding these days but still many dont understand the basics of crowdfunding. Its presented as this perfect avenue to raise funds without giving up capital while at the same time getting your name and product or service out the public. Well, it is all those things but it is far from perfect, it isnt this magic fundraising platform that if you build it they will come scenerio, it isnt.
Here are the 5 Basics of crowdfunding you need to know before starting a project.
1. Its all about the pre-launch
What do I mean by this? The success or failure of every crowdfunding project is made in then first 72 hours of its launch. People love to get behind a success story, they get more press, more tweets, more shares and ultimately more money. Your crowdfunding campaign should start 3 months before you ever go live, you should have at least 50% of your goal already raised before you even launch on Kickstarter or Indiegogo and ideally you should have 100% raised before you launch. This is what every successful campaign does.
2. Have a great story
Your story sells the product. Make it fun, believable, exciting. Make it something that people want to share, like, tweet and tell all their friends. A great project is one thats spread far beyond your immediate group and the more money you want to raise the more the story becomes absolutely essential. Create a wow, a very strange, a why didnt I think of that or a very funny campaign story and people will spread the word for you. Put a huge amount of thought into your message, then keep it consistent across all your media channels and tell the world, theyll repay your great story by telling the rest of the world.
3.Have a video and sell yourself
As much as people love a great story they love a person they can get behind even more. If theres ever a time in your life you should come across as humble yet confident, knowledgable but not cocky, this is excited about what your doing and show your passion. If youre not passionate about what youre doing how can you expect anyone else to be? Make sure your message is clear, to the point, specific in describing exactly what youre doing and very specific in what youre asking for. Whatever you do dont forget to ask people to contribute, ask them to click on a link and invest in your project. If you dont ask, they probably wont act. This isnt your time to be shy so dont be, but still remain humble.
4. Create doable milestones
If you have 20 friends but you want to raise a million dollars youd better make sure theyre all very rich, really believe in you and are happy to part with large sums of their money to give to you. The secret for most highly successful crowdfunding campaigns that raise a million plus is that they almost always have some large investors already on board before they ever launch for the majority of the funds. Most people are going to invest $20 or less, so if you do the math and want to raise a million dollars you need to be probably the most popular person on the planet. Otherwise you need the previous 3 items we just discussed, some luck, alot of marketing dollars and some very popular friends. In other words create milestones that you realistically believe you can achieve and get your project off the ground. The key is to get funded so use the least amount possible of youre going with Kickstarter but even with Indiegogo though you dont have to be fully funded to keep the funds you still want to set realistic targets.
5. Set stretch goals
Weve covered most of the basics of crowdfunding but the one last thing you need to know is if funds start to pour in you want to make sure you have stretch milestones established to ensure that you can keep the excitement going. Theres nothing worse than being on a great role with thousands of people talking about you and you not having something to keep the funds coming in. Create multiple stretch goals that are in realistic increments and make sure it goes all the way up to your greatest, highest expectations.
Those are the basics of crowdfunding that you need to know, you absolutely need to take into account when creating your project. Youll be far more successful if you follow these 5 points and far less disappointed.
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