7 keys to a successful crowdfunding campaign
According to a study carried out by entrepreneur.com, 69% to 89% of business projects (depending on the platform chosen) do not reach their fundraising objective necessary for their development. While being, altogether with Kickstarter – the world leader of the crowdfunding market, the platform Indiegogo has a success rate of only 13 %.
In most of the cases, it is not the quality of the published projects to blame. The startup project of a high-tech ice blender “The Coolest Cooler” had not managed to reach its fundraising goal of $125 000 on Kickstarter on its first attempt. Only 10 months later, the same project managed to raise more than $10 million on the same platform.
A lot of future entrepreneurs think that it is enough to create a project description page on a crowdfunding platform in order to quickly start receiving funds from thousands of investors. In real, the success or the failure of a crowdfunding campaign relies on a number key factors.
How to run a successful crowdfunding campaign?
Do not underestimate the importance of a pre-campaign
Young entrepreneurs often underestimate the preparation phase and start launch a communication campaign the same date as they launch their crowdfunding campaign. To maximize donations, one of the keys to succeed is to identify, contact and interact with potential contributors and influencers prior to the campaign. One or ideally 2 months in advance should be enough in order to establish a community around the project and generate a maximum of buzz online and offline.
Make a persuasive video
The Kickstarter platform highlights that a quality video is actually the most important part of your crowdfunding page as it is the first thing that a potential backer will see. A video of a project should bring answers to 4 questions: Who, What, When and Why. The ideal length of a crowdfunding video is approximately 2 minutes.
Moreover, the two elements that contribute most to the quality of your video are good lighting and the sound quality. Should you decide to create a crowdfunding video on your own or hire an expert, you definitely should not neglect these points.
Use only HD photos
Same as having a good quality video, is it crucial to use images (of products, team, working environment etc) of a very high quality. On one hand, it will make your project presentation much more attractive for different potential backers and you will therefore have more chances to reach your dream amount of funding. Furthermore, journalists and bloggers will be more likely willing to write an article about your project if you provide them with good quality pictures.
Set a realistic fundraising goal
The choice of your donation objective will play an important role. Most importantly, it must correspond with the necessary minimum funding you need to kick-start your project. If it is too low, your potential backers might think that you do not dispose of means nor ambition to realize your project. If it is too high, there is a risk that you will not reach your goal and receive 0 funding. Finally, note that, according the latest statistics published by Kicktarter, the most successful projects set their fundraising goal between $5000 and $10 000.
Using social networks to create buzz around your project is one of the best ways to reach to investors ready to help you out. Start with determining 3-4 social networks with the highest number of your potentials backers. Then, at least one month before the start of your campaign and all along, it is highly recommended to post daily on the chosen social networks and engage with your community in order to attract as many contributors as possible to your crowdfunding page.
It is highly unlikely that media accidentally discover your business project and decide to write an article about it. All projects having raised the highest amount of money have been written about in press (as they often display in on their page of crowdfunding campaign). In order to attract attention of media, make sure to write persuasive press releases and contact journalists, bloggers and influencers potentially interested in your project.
Talk about the project progress
Once you prepare the crowdfunding page, it is important to make it “active” all along your crowdfunding campaign. Indeed, this can show that the project is successfully turning into reality which is likely to convince new backers to contribute. Moreover, investors on platforms such as Kickstarter are often very interested to know all the details about the development process of your product. Finally, a recent report by Indiegogo says that those campaigns that update their campaign page and information at least 3 times gather on average 239% more funding than others.
By respecting these 7 key principles, you will maximize chances of getting the funding you need to kick-start your business. In case you do not have time to create and manage efficiently your campaign, All-In Factory team of experienced professionals can do it for you.