Funding is usually one of the first problems entrepreneurs can face, and what makes this process frustrating is a combination of high expectations and looking for money in all the wrong places. We’ve come up with some simple crowdfunding hacks that can turn that around, however.
The demand for other financing options has continued to grow as traditional sources of finance have become increasingly difficult to access, with difficult application processes and heavy repayment plans.
In fact, 60 per cent of startup entrepreneurs admitted to using personal savings more than any other source of business financing. That’s where crowdfunding hacks could come in handy.
As you know, crowdfunding is one of the UK’s fastest growing alternative finance options. It’s funding a venture by raising money from friends, family, customers, private institutional investors or complete strangers.
But do you know the crowdfunding hacks that should be used to make the campaign a success?
For leaders of businesses and projects, there are five simple crowdfunding hacks to ensure campaigns tick all the right boxes to raise as much capital as possible:
(1) Identify a clear target audience
You will need to engage with your personal and professional contacts to make your project a success. Usually your friends and family will be the first to pledge – and it’s a good idea to line of up some of that funding before your project goes live. The best way to start is to gather your team together and start drawing a map of your network.
This network map will give you a much fuller picture of the shape and size of your crowd. Your unique network map will be the basis for all the key elements you’ll be creating next, so leave nothing out.
(2) Look out for free money
There are many initiatives that might qualify for a boost from corporate or local council funds. Basically, if your project meets the criteria of the fund, it may get an additional cash injection.
At Crowdfunder.co.uk we work with many partners to ensure that projects on the platform can tap into additional funds and potentially get a splash of cash.
(3) Determine whether you have the necessary skills
Think about your strengths and weaknesses. Are there any gaps in your own skillset that need to be filled? It’s a good idea to share the load then running a crowdfunding project and find people to help with specific tasks.
The core team behind great Crowdfunder projects is usually made up of two to five key people, so think about who you want on board play to everyone’s strengths.
(4) Offer unique rewards and incentives
Rewards are a great way of increasing the amount of money a supporter will pledge as well as a great way for generating excitement around your project. Think about the kind of people who will be making the pledges and offer rewards that you yourself would want to receive.
Consider the following:
- Rewards should be good value for money. If one of your rewards is available elsewhere, 20-30 per cent discount it a great way of making it attractive to your crowd.
- Offer exclusive ‘behind the scenes’ experiences, tickets to events, masterclasses or special editions – things that aren’t available elsewhere.
- Limited rewards are a fantastic way of securing early support. Having just a small number available is a good way to get your crowd motivated.
- Spread your rewards evenly across different price points from £10 to £100 and include some sort of sponsorship at the top end to attract support from businesses, or larger organisations.
(5) Present your story in an engaging way
When visitors land on your project, you need make a connection quickly and get them excited about your project. To do this well you’ll need to consider the following:
- Make sure your description is structured, concise and engaging.
- Add some images such as team photos or images explaining the project.
- Create rich, bite-sized content, such as a bespoke video. Keep it short and sweet!
- Use diagrams or maps to add context to your project.
- Use infographics to show dreary data in a more visual way.
- Add testimonials to give it a professional-looking finish.
- Utilise multiple touchpoints to communicate the existence of your project page to your audiences.
Once you’ve made it through your successful crowdfund, it’s time to pat yourself on the back and think about what’s next, but remember to thank everyone as loudly and publicly as you can.
Most importantly, keep your backers updated with any developments, first, when they can expect their rewards and later how the business is progressing. Happy crowdfunding!
Sami Mauger is head of coaching & project innovation at Crowdfunder.co.uk