Done properly, crowdfunding is a relatively risk-free way to boost your business bank balance. But only a small minority of crowdfunding appeals are successful. Approach the opportunity with the same care as you would any source of business finance to maximise your chance of success.
How do I write a good crowdfunding campaign? 11 tips to maximise your crowdfunding success
1. Choose the right platform
There are lots of crowdfunding platforms; from formal peer-to-peer lending to informal charity fundraising. You might be familiar with Kickstarter, GoFundMe, JustGiving and Facebook Donate, but these are just a fraction of the options available.
You need to research your options to find the right platform for your project needs.
- Are they a business or charity crowdfunding platform?
- Is investment on a reward or investment basis?
- Who are their typical investors / audience?
- What fees do they charge?
- Is funding on an all-or-nothing basis?
Also consider what you’re willing to give investors in exchange for their support. Expectations can range from a token product to an equity share of your business.
Read our blog post on crowdfunding your startup if you’re new to the concept and need some background information.
2. Make sure it all adds up
You don’t have to include detailed financials in your crowdfunding appeal. But it can build investor confidence in your credentials if you show you know your stuff.
Not only that, working out costs and expenses helps you decide how much you realistically need to raise. Check out of blog post of writing a business plan for your startup. Don’t forget to plan for the costs of providing your rewards!
3. Be honest
It is important to be honest when you write your crowdfunding campaign. You don’t want to ruin your reputation with a tall tale that isn’t true.
Be honest about how you’ll spend the money. If you’ll use some of the money raised to take a year off work to get the business off the ground, tell people. Explain how much quicker you’ll achieve your goal by working full time on this very worthwhile project.
4. Get everything ready before you launch…
Your appeal runs only for a set amount of time. To maximise impact, get everything ready before you launch. For example, you may want to share certain content or direct people to particular resources. Consider:
- setting up a website or social media page
- writing blog posts required
- recording any videos you want to share
You may still want to create content during your campaign. For example, answering any questions that crop up via a live video. But having the majority prepared in advance will really help.
5. But respond in real time
Social media is just that…people expect to interact with you and ask questions about your business. Think of the crowdfunding process as a networking event rather than an advertising campaign.
You’ll need to be available to respond to potential investors – via Twitter, Facebook, anywhere they might encounter your appeal.
Use every interaction as an opportunity to make a great impression and enthuse people about your project. Let them get to know the real you.
6. Offer something worth having
Some crowdfunding campaigns offer a reward to investors. It is a thank you to your supporters for having faith in you.
Many reward-based investors have a vested interest in seeing your business succeed because they really want to get their hands on what you’re offering. So it makes sense to offer them something related to your business plan.
- a free product once you’re up and running
- a signed copy of your book once it’s published
- an afternoon tea voucher (and kitten cuddles) at your cat café
Factor the cost of the reward into your business plan and make sure you treat your investors as your most valued customers.
7. Be yourself / your brand
For many small investors, the appeal of crowdfunding is supporting something they love or believe in. Be yourself and appeal to people who’ll feel as passionately as you do about your business.
Being starchy and formal might work with a high street bank but isn’t likely to appeal to the crowd of pet lovers you want to fund your cat café.
8. Highlight your problem… and the solution
The best appeals have a well-defined problem that money can solve.
This makes them easy to understand and shows how investors can be part of the solution. Even if your problem is complicated, try to get it down to a single easy-to-understand concept.
Make it very clear how each small donation adds up to a big success.
9. Appeal emotionally
Targeting people’s hearts and minds is a great way to secure funding. But only appeal to people’s emotions if it is appropriate.
If your product is life-changing, let people know how it can help those in need. If you’re raising money to overcome an unexpected setback – like a break-in or illness – talk about that.
But don’t make it all about you and what you want. If your emotional appeal is just based on how much you’d like to quit your job, that’s unlikely to get people to part with their money.
10. Share successes
Share the number of investors you’ve secured to date. People are more inclined to support campaigns that other people have got faith in. This is especially important for new businesses where there is no evidence or customer reviews to back up your business case.
11. Be liberal with thanks
One of the easiest ways to reward an investor is to thank them publicly. And one of the quickest ways to annoy them is to fail to acknowledge their support.
People love acknowledgement of their generosity, especially on social media. (Who doesn’t love a good humblebrag about the charities or causes we’ve supported?!) So make sure you thank every investor you recruit and remind them of the important part they’re playing in your project.
Want to know what other sources of business finance are available to your startup business? Check out our guide to funding options for businesses.
Want to know more about crowdfunding? Our guide to crowdfunding for business answers your burning questions...