How to run a successful crowdfunding campaign?
A list of tips I gave to a friend based on my experience so far…
Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.
I love crowdfunding as a funding mechanism. Especially because it also works as a marketing campaign, if done right.
For that reason, I have returned to crowdfunding every time I have needed to raise money. Either for paying my tuition and travel costs. Or for raising capital (equity, convertible debt, fond — you name it).
However, I am sure most people and companies expect it to be more than it is!
Let me rephrase it:
- Crowdfunding is not a magical way to raise easy-stupid money.
- It takes a lot of work!
- And most of the money raised will be local…
Of course, crowdfunding will also attract the non-smart money (which currently seems to dominate the crypto markets).
Yet, the market has become much smarter within the last 2–3 years.
So the first thing is to build a perfect campaign with all the information on the particular project. But this how-to information for that is freely available (google it or consult with the particular crowdfunding platform team). Therefore, I will skip this part and focus on the campaign marketing.
As mentioned, most of the money raised will be local. There will be some random or professional investors money. But most of it will come from our friends, family and other wealthy individuals we might have met in our travels.
Thus it makes sense to focus on getting the people that know of you see your message, while making them think everyone will be rushing for the opportunity.
Create the feeling of global scale and urgency!
In my experience, the following is what needs to be done:
- Local press. Get the newspapers writing about you. Go on a radio show. Better yet, TV. Most of it will not convert! It will generate awareness in the back of people’s minds. And this is what you need…
- Widespread (local) marketing: Post on all the social media channels (Facebook, Google+ Instagram, LinkedIn, Twitter etc — both under corporate and personal accounts). Write a few blog posts or opinion articles. Put together a newsletter of 1000+ emails (if you do not have a corporate newsletter then compose a personal one by combining the emails of everyone whose business card you have ever received). This is to get the word out there! If done well, people will start sharing it for you.
- Targeted messages: Put together a list of 100 people that know of you and who you would want to become your investor. Next up, send them personal emails or write via any messenger platform. Better yet, try to book meetings with them.
The last part is the most important, as this is how you will get most of the money. BUT, it does not work, unless those people have not heard about you and the campaign before. Thus do not miss the first two points!
Also, in my personal experience, advertising does not have a good enough return on investment. So do not spend money on raising the small amount. Rather spend your time and energy.
In past, we have also tried a few extra activities, such as investor events, Facebook live Q/As, partnerships with our customers, as well as bringing in outside investors (those that invest directly into you). So go and test these or some other great ideas you will have.
Just do the work!
Has something else worked well when running successful crowdfunding campaigns? Would you recommend some specific activities?
