How To Raise Money For Your Start-up With Crowdfunding
As an entrepreneur with an idea for a new product or service, one of the biggest problems you will face is raising funding to launch your start-up. In years gone by, you would take your idea and a prototype to your bank manager and ask for a loan. The manager would assess your idea and would often be able to make his own decision. If you required a large amount of funding, he may refer it to head office.
Today, there is a smarter way to raise money for your start-up
Today, there is a smarter way to raise money for your start-up and build a crowd of loyal customers in the process, and that way is… crowdfunding. Crowdfunding provides you with the perfect way to validate your start-up idea, raise funding and build a crowd of early adopters and Investors; and you don’t have to worry about paying any loans back to the bank.
‘Rewards’ & ‘Equity’ Crowdfunding
The two main areas of crowdfunding are ‘Rewards’ and ‘Equity’.
Rewards crowdfunding lets start-ups raise funding for a project by giving backers of the campaign a reward. Generally the start-up has designed a new innovative product, which they pre-sell at a discount. The start-up uses the money to manufacture the product and the backer waits for the product to be made and delivered. Kickstarter and Indiegogo are the main crowdfunding platforms to use when planning a ‘rewards’ campaign.
Equity crowdfunding allows start-ups to raise funding by releasing shares (equity) in the company for a fixed amount of investment. Investors who back a start-up are hoping the business does well increasing the value of their shares which they can sell at a later date. In the UK platforms such as Crowdcube and Seedrs are the places to run your equity crowdfunding campaign.
Not all crowdfunding projects are successful
It has to be said that not all crowdfunding projects are successful and a start-up will need to invest a reasonable amount of money into running their campaign. However, running a successful campaign can be the difference between launching your start-up and it never getting off the ground at all. So the investment is generally worth the risk if you believe you have a great product or service that people need.
How to increase your chances of success?
Successful rewards and equity campaigns follow a few common practices, which you can model:
- They have a strong and unique product/service offer
- Are presented in an appealing and engaging way – with a pitch video, creative copy and images
- Implement a marketing strategy to help build attention about the campaign and mobalise your crowd.
- Have a team in place to manage the campaign workload.
Planning and implementing a crowdfunding campaign takes time and can be a lot of hard work. To increase your chances of successfully funding your campaign you should research past campaigns and gain a good understanding of what is required to run a successful campaign. Speaking with other start-ups who have crowdfunded is a good idea and hiring a crowdfunding marketing agency such as Wow Your Crowd, will help guide you on your crowdfunding journey and improve your chances of launching your start-up and realising your business dreams.
To learn more about Crowdfunding and how you can kick-start your campaign contact us today.
5 Steps to Create a Crowdfunding Campaign for your Charity or Social Cause
All good causes need money and crowdfunding has been exceptionally useful to many social causes throughout recent years. The rise of social media has made it easier than ever to share your message and reach a large number of people. The problem? You only have one chance to hook your audience. That’s why you need to develop the best sales pitch possible. Here’s 5 steps on how to create an incredible sales pitch for your charity or social cause crowdfunding campaign.
Know your hook
People need to feel emotionally invested in your campaign in order to dig into their pockets so important to know and understand your message and how to use it.
The most successful crowdfunding campaigns have an emotional, ethical or political undertone, so work out what your best angle is and put your message out there. It’s important not to sound too perfect otherwise your audience will wonder why you need investment. Also be careful about humour – people need to take the cause seriously enough to donate.
Write a good narrative
Remember that your sales pitch has to get people invested enough in your cause in order to donate – write clear but persuasive copy in your sales pitch, which will help your campaign to spread. Throughout your sales pitch, explain the problem and solution, include quotable narrative, from facts and statistics to the campaigns purpose and how you’re going to make a difference. Write copy that is inclusive – make readers feel a part of it and readers will become donors to fight the cause with you!
Create an engaging video
As you are ‘crowdfunding’ online, it’s good to understand people’s social media habits. The best crowdfunding campaigns know that people have short attention spans. Create a short but engaging video that quickly and easily explains what your campaign is about, why you are doing it, what it is that you need and when and where the results will take place. People will be more inclined watch a quick video rather than read a long essay.
Translate to multiple languages
A lot of crowdfunding campaigns will affect and appeal to a large group of people from different cultures and countries. If that sounds like your campaign, it’s important to be able to communicate with everybody so be sure to get your sales pitch translated into as many languages as is necessary. This shows thought and intent. It says ‘this applies to you too!’
Reward your crowdfunders donations
Some people like to receive a little something for their donation. Whether this is something small like a mention of their name or something bigger like a tangible item. Rewards are a great way for you to repay donors for their donation. Popular rewards for charity campaigns include token offering such as key-rings, tee shirts and mugs to bigger items such as sponsored gifts, event tickets, vouchers and first reveals.
Raising money for your charity of choice or social cause is a brilliant thing to do and will provide much help for those in need. By taking action and implementing the steps listed above you will be in the right place to create a clear and persuasive pitch, which will help you to run a successful crowdfunding campaign for your charity or social cause.
For all your crowdfunding needs get in touch here and good luck!
How To Create A Successful Equity Crowdfunding Video
Having a captivating crowdfunding video is one of the most important aspects of a successful equity crowdfunding campaign. It’s an extremely powerful marketing tool that can convince investors that your campaign is the one to back. Recent research has proven that a campaign supported by video is 85% more likely to achieve its funding goals.
Your equity crowdfunding video’s message should be tailored to its intended audience. It’s important to remember, you are selling an investment opportunity in your business and not promoting your products or services. All too often crowdfunding videos make this mistake and end up losing the interest of investors.
Tips For Creating A Successful Equity Crowdfunding Video
Now that we know the importance of a compelling equity crowdfunding video, and how it should be targeted, we can look into the finer details that will set your video up for success:
Plan Out The Video Carefully
Detail every aspect of the video prior to shooting. This is one of the most important steps to creating a successful equity crowdfunding video. Know your audience, know what you want to say and say it as effectively as possible. Be personable and tell potential investors about your business opportunity and why they should back your project. Identify the key investment benefits of your campaign and compel your potential investors to give you their backing. Before you start filming, create a script and be sure to include these points:
- Your elevator pitch – a short introduction explaining who you are and what your company does. Talk about the issue you are solving and why it will transform the lives of others.
- Tell your story and explain why the business exists. Explain your goals and your mission.
- Show the market opportunity – use industry data to show the gap in the market and the need for your business.
- Highlight your strategy - explain how your company generates its revenue, what your plans are and how the investment will be used to achieve them. Explain how investors can make a return on their investment.
Make It Personal
Your video acts as a brilliant opportunity for you to introduce yourself and your team to potential investors. So don’t miss this chance, star in your video be personable and show your passion for your business. Many investors may not meet you face to face so your video is the only chance to help them know, like and trust you.
Make Your Video Stand Out
If your equity crowdfunding video isn’t engaging and doesn’t stand out, it, and your project, have a good chance of failing. Placing your hopes and dreams firmly in the gutter. Don’t leave your business success to chance. Hire a professional video production company, that specialises in equity crowdfunding videos. Tap into their wealth of industry knowledge and reap the benefits of a professional high-quality video production. Although this approach may cost more, it will be worth it in the end with a stand out video that makes you look professional and keeps investors focused on your message long after the video has finished.
Another top tip is to create a selection of ultra-shareable cut-down video edits, which you can use across your social media channels to generate a buzz and build awareness of your cowdfunding campaign.
Testimonials
It’s a great idea to feature testimonials in your pitch video from current customers, partners and investors who support your business and endorse it. Their positive experiences about your service and team will help to influence potential investors thoughts and feelings about your business.
Don’t Overdo It
Keep your equity crowdfunding video as short and to the point as possible. Ideally, your video should be around 3 minutes long with the first 20-30 seconds making a real impact. Right away, grab the viewers attention. Hook them and make them excited about your project. This will entice investors to continue watching the rest of the video and hopefully invest.
Call To Action
Be sure to end your equity crowdfunding video with a clear call to action. Summarise your campaign, and provide a final reminder on why your project is the perfect opportunity to invest in. Tell investors what they should do next in order to be part of your business success.
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