CEO of Crowdfunding Focus Magazine Talks Best Practices. - CrowdClan
- Understand the CrowdFunding scene. There are
different types of CrowdFunding such as donation, rewards, equity and
debt based CrowdFunding (there are more, but these are the main ones).
Choosing the one that’s best for you is crucial. Some campaigns may be
best suited to one type of CrowdFunding and can, for example, at a later
stage, follow on with another type of CrowdFunding.
- Choose the right CrowdFunding platform.
There are more than 1000 CrowdFunding platforms around the globe and
choosing the right one is fundamental to your success. Each platform has
its own guidelines so further research has to be done in order to
compare and select the right one. Moreover, each country has its own
form of CrowdFunding regulations and tax implications so this has to be
taken into account as well.
- Know that CrowdFunding is a full time job.
Campaign management can be divided up between a team of people or can
be led by one person. There has to be a commitment to do what is
required at all stages of the process. Most campaign managers agree that
running a campaign requires far more work than they realised. Most
CrowdFunding websites do not explain just how much work is involved in
running a campaign.
- Set the right target. Many
campaigns fail because they do not understand how to set the target
amount they are looking for. Some campaigners set a target based on what
the project needs, irrespective of how large their crowd may be. Others
forget to factor in the costs of rewards, and end up spending more than
what they raised.
- Build your crowd.
This fundamental concept is often overlooked as it is often assumed
that either the CrowdFunding platform will promote the project or that
there is an unending supply of strangers out there wanting to back
projects. If you do not have a crowd, you need to build one first before
launching a CrowdFunding campaign.
- Commit time. You
will have to, on average, set aside at least 120 days to organize, plan
and execute your campaign. 60 days to set up and promote the fact that
you are going to launch a campaign, 30 days for the actual campaign and
30 days to deliver on your campaign promises.
- Invest in your project.
Campaign organisers have to demonstrate via their video, narrative and
rewards that they have already committed time, effort, energy and
resources into the project. This demonstration of forward movement is
crucial in gaining trust and funding momentum.
- Gain momentum. Successful
campaigns show that around 30% or more of the funds come in the first
48 hours of launching a project. This helps tremendously, as all future
investors like to support an idea that has already gained a lot of
traction. In other words, you need to have contacted and received the
support of your early supporters long before you launch a campaign.
There are other best practices but observing the above list will get you
started and help you gain a clearer perspective of how to launch and