If you want to start (or further) your business, you may need to turn to crowdfunding as a means of raising money. Crowdfunding can be a great tool for raising money, but it can also be a complicated process if you don’t know what you’re doing. Well, I’m here to help! With my crowdfunding tips on what to do and what to avoid, you will find raising money through crowdfunding to be a much simpler and even enjoyable process. Read on below to find out more.
Be Prepared: This first tip may sound obvious. However it’s probably the most important aspect of this entire article. Being prepared to present your product or business idea, answer any questions that may arise, and pitch a convincing concept is critical to the success of your crowdfunding campaign. Whether you are trying to raise five thousand dollars or five hundred thousand dollars, you must be prepared.
Know your product or business idea inside and out. Know your competition. Know that there will be people who support you and people who have their doubts. If you are prepared for receiving any possible reaction from those around you, you will be much more likely to succeed.
Strategize and Socialize: After you feel completely prepared (or at least as prepared as you can feel when getting ready to start on what’s possibly the single most important venture of your life), you must start to strategize and then socialize.
First, your strategy is how you will approach every angle of your crowdfunding journey. From social media outreach to your website to “thank you” emails for donors, decide on a strategy and if you find that it works well, stick with it. Consistency is key.
Then you can begin to socialize. Reach out to anyone and everyone: strangers, peers, colleagues, past schoolmates…think of anyone who might want to support you or your goals and reach out to them. Be charming but also realistic. Present a full picture of your concept and again, be consistent with it. You will find that as you raise money and gain traction, more people will put stock in what you have to say.
Communication is Key: Once someone invests in your idea, your relationship with them doesn’t end; in fact, it’s just begun. Think of your investors as your best friends–you must put time and care into your interactions with them, or you could possibly lose an extremely important relationship.
Thank your investors, keep them up-to-date on your product or business ideas, and give them sneak-peeks into information that is not yet available to the public. You want to make them feel special. These are the most important people in your company’s life right now.
Don’t Overthink It: Now let’s discuss some of the pitfalls that are crucial for you to avoid as you start your crowdfunding campaign.
Often our company or product is our baby. It’s what we put our all into; any extra time, dollar, and energy goes toward our business. However, with crowdfunding, you cannot allow yourself to overinvest. Yes, you must put effort into this process, just like anything else. But be careful that you don’t get too wrapped up in your crowdfunding efforts.
In other words it’s important to not have all of your eggs in one basket. You will spend a lot of time, money, and resources on your crowdfunding campaign–don’t let it overtake you to the point that you forget other aspects of your work.
Don’t Assume It’s For You: Does money excite you? I assume transforming your business idea into a successfully run company excites you as well, or else you wouldn’t still be reading this article. Everyone wants to succeed, and most people want to make money while they do so.
However, crowdfunding is not for everyone. Certain concepts, such as specific products, lend themselves to crowdfunding efforts extremely efficiently. On the flip side, other concepts such as service-based companies (ie. hair salons or landscaping services) do not work as well for crowdfunding. This is not to say that crowdfunding is impossible for service-based business ideas, but only that it is not ideal for all companies.
We can easily get excited at the thought of raising lots of money and meeting potential investors. Be sure to do proper research prior to starting any crowdfunding efforts to ensure that you don’t waste your own time and money, or that of others.
Be Prepared to Fail: While you must be prepared with information, research, and answers to questions, you also must be mentally prepared for failure. This is different from being pessimistic or assuming you definitely will fail; instead, being prepared to fail simply means you know that it is a real possibility.
Only a small fraction of crowdfunding efforts truly result in success. If you follow the right steps and have a fair bit of luck, you can certainly be a part of this number! However, it is important that you do not assume that success will come easily, or that it will be a simple process.
Crowdfunding has become a buzzword of sorts. People read it and they get excited about the prospect of raising funds and gaining popularity. It is good to have expectations and hope, and it is also critical to be reasonable and know the statistics. In the end, there is a balance to strike between optimism and realism.
Get Started!: If you have done your research and have found that crowdfunding is indeed the right path for you to take, well done! Arriving at this conclusion is exciting; it means that you are about to start down a road full of challenges and, hopefully, celebrations. Keep our tips in mind and do your best to avoid the pitfalls that we have listed above, and you will find yourself ready to put your best effort into crowdfunding.
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