Major Failures in Raising Capital
I was contacted by a young entrepreneur who claimed to have a new ethnic food product that Cosco wanted to put on its shelves. He valued the deal in the millions of dollars… and was positive that his special soup recipe could go viral and national in a big way. The only problem… at least in his mind… was that management at Cosco wanted to first see his special soup distributed in other outlets as proof of concept for its sales value and popularity. But he had not yet distributed his product anywhere and did not have the funding to do so.
The young guy seemed very smart and energetic. He was from East Africa and his backstory on the soup… made in his grandmother’s kitchen when he was a little boy… was pure PR gold. He needed close to $200k to produce the soup and get int into grocery outlets… so wanted our team to help him put together a crowdfunding campaign. The only challenge was… he had no money to build a campaign. His offer to us — if we could help him launch his million dollar food product by first raising the $200k on Kickstarter… was that he would give us $5,000 for our efforts. How could success even remotely be possible if the client/entrepreneur had zero dollars to build a campaign? Zero dollars to produce a video? And zero dollars to produce food product shots? We’re supposed to spend our time, our effort, our skill and our money to help him build a seven figure food empire… on the hopes of maybe, maybe, maybe getting $5K?
The absurdity of the above is extreme and obvious, but our team comes across similar variations almost every month… which boils down to the mistaken idea that crowdfunding is both free and easy. The “entrepreneur” for the most part has never successfully run a business, does not understand crowdfunding, does not understand media, marketing or promotion… and, worst of all, has no idea whatsoever of the budget needed to develop a compelling video, product photos or effective campaign. They want the crowdfunding professionals to bear the funding cost, take all of the risk, do all of the work… on the hopes of maybe getting a small slice of the pie IF the funding is successful. Obviously, no one with any real experience in fundraising would touch that type of loser situation with a ten foot pole.
To raise capital with crowdfunding one needs to look at the various platforms and determine which is the best match for his/her project. This first step is important… and one that most miss altogether by only looking at payout terms and/or service percentages. Some platforms are better for tech, some for “feel good” green solutions, some for educational products. There are now even very hot platforms for real estate, bio/med and real estate.
Need to raise capital? We have resources to help.
Initial retainer as low as $1875.In years gone by one could run a successful campaign with weak photos and amateur homemade videos… but no longer. To be successful the campaign needs to be well-designed, the copy must be compelling… with strong subliminals throughout. There must be a strong visual hierarchy… and the product shots should “tell” a story progression as one scrolls down the page. And… at the very top of the list… the video must be national caliber. Sell the sizzle… not the steak! (Click on the photo below to see a crowdfunding video conceived, written, produced and directed by our team in New York).
Finally, the so-called “entrepreneurs” need to be better educated, better informed and move away from the false belief that crowdfunding is free money. One recent example I saw on a freelance job posting site — A company with a “life saving” new medical device they want to market worldwide. They needed to crowdfund $20M for human trials… with a campaign budget listed as $500. Seriously, how could anyone supposedly in the medical field be that naive?
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Our team produces successful crowdfunding campaigns and videos, for details go to — Project Development Consultation
I will be happy to take time by phone to explore and help advise anyone based on their specific situation. Call our office in New York at (212) 465–3205. There is no cost for that initial consultation. To find out more, go to — MediaConsultingServices.com
About the Author
Michael David McGuire is a freelance development consultant based in New York and Los Angeles. Projects have spanned more than 800 separate markets across North America, Europe and Asia.
Media Bio at MichaelDavidMcGuire.com
