Crowdfunding is a kind of social fundraising. It’s the new way to raise money, by leveraging your personal network to support your cause or campaign. Along with your network, you can use an online crowdfunding platform to raise the money you need to fund your personal or business venture.
Crowdfunding is an excellent option for startups, product creators, and developers to launch their ideas, collect funds and have a platform to build a community for their big idea.
When starting any crowdfunding campaign, you may need to keep these points in mind; you must be mindful of several misconceptions and misunderstandings surrounding crowdfunding to prevent any issues that could have a negative effect on your project.
Crowdfunding Myths
Here are some important crowdfunding myths:
Innovative ideas are not crucial to the success
Wrong! The most innovative ideas have the best chance of succeeding and raising the funding they seek. Along with being innovative the best ideas need a good plan and strategy to bring it to life, which requires adequate time and attention to implement successfully. First, find out which groups of individuals are likely to support your campaign and then work out a marketing strategy on how to share your campaign with them to gain their backing.
The real work starts when your campaign starts
I will urge you to initiate your campaign at least two months before the official launch date. This is the time required to construct an effective plan, including a mailing list, and to develop a strong backer community around your project. These are the two crucial factors needed for your campaign’s success. It would help if you used this time to study, prepare ahead, collect a good team, identify positions, and arrange all the assets before the start of the project. Planning well in advance will set you to campaign up for success.
The concept that people are waiting for your idea and project launch is misleading. Although crowdfunding begins with close friends and relatives, it hardly finishes with them. Many of us are also aware of the importance of news and social media promotions for business promotion.
To get the desired support you need for your campaign, you must start using other networks to inspire people to spread the word to their networks to gain mass awareness. With the right effort behind the campaign along with a well-advertised promotion, you will give your campaign a greater chance of success.
A Significant following on Social media DOESN’T assure success
Do you know that one of the reasons for your campaign failure is to post completely about it in advance?
Although social media is a key factor in crowdfunding success, you need to be aware of the fact that the majority of the donations will come from people you know already, such as your friends, relatives, or e-mail subscribers.
Keep in mind that undoubtedly Facebook numbers are important! Quite a few people will already have over 10k or more followers on their Facebook and Instagram, which they believe will be enough to help raise the funds they require. Unfortunately, this isn’t completely correct. Its best to work out the figures. How many pledges do you need of a certain amount to reach your funding target? Once you know this number times it by 20, (which = 5%). This is the ideal amount of people you need to reach out to and convince to back your campaign.
For example: For a 5 % conversion expectancy:
100 pledges x £100 fee = £10,000 funding target.
20 x 100 pledges = 2000 people
Facebook & Instagram are a great way to reach more people and build up your crowd. Review the number of followers you already have and then decide how many more people you need to reach.
Many campaigns set up a marketing funnel to capture leads for their campaign. The marketing funnel can include Facebook ads, press releases, email marketing and other marketing strategies.
If you haven’t got a social following or email list, it makes sense to start building one as soon as possible. Ideally 6 or even 12 months before you launch! You want people to know who you are and what you stand for. If you don’t have that kind of time then use the time you have to the maximum.
The crowdfunding campaign is only for startups
Many people think that crowdfunding is predominately for entrepreneurs and start-ups to raise significant capital to support their innovative ideas. This isn’t correct and is a misunderstanding. Crowdfunding is for everyone, entrepreneurs, start-ups, individuals and established businesses. Recently many big brands have started to use crowdfunding as a way to test their new innovations, rather than launching them direct to the commercial market.
Finally,
Implementing a Crowdfunding Marketing campaign is a great way to build awareness, build a community of followers and overcome any financial obstacles you may have with raising capital with conventional methods such as banks, schemes, investors, and other financial institutions. Any entrepreneur or business with an advanced concept can use crowdfunding to raise money quickly and easily without giving away large amounts of equity in their business or spending large sums of personal money.
