We recently attended a crowdfunding seminar hosted by Startup Direct and Paul Grant of the Funding Game. Simon, our Business Development Manager, was sent to make copious notes.
So here’s his take on the Five Points of
Calvinism. Err, sorry. Crowdfunding.
Point 1: TALK
Spend your time in this pre-prep phase generating contacts and talking to possible investors and buyers. This will serve two purposes:
- Your potential investors will feel more involved and in sync with your idea and vision. Then, when the time comes, they will be more likely to invest because this is their project, too.
- You’ll get a second opinion on your product or service. You may be working on false pre-suppositions about your target market and what they want. This will help you to find out more about the problem you are addressing.
Point 2: UNITE
This is where your real preparation takes place. You must drum up the promises you got from Point 1 and unite this into a sizeable committed line even before you launch your crowdfunding campaign.
Your should have at least 40% of the funding for your round pledged before you begin your campaign. This will give your pitch more credibility when you launch because so many people have already chosen to invest in your idea.
Point 3: LURE
Reel ’em in! Use your campaign design to lure the remaining 60%, and never skimp on the work you put in before the campaign. A few things to keep in mind:
- Your message should be clear and simple, should have a summary of where you are, where you are going and what you need to get there.
- Your video should be short and interesting, identify a need, show you as an expert in this field and provide your answer to the need. Very importantly, does it build and demonstrate your credibility as a provider
- Your rewards section, if you are running a product Crowdfunding campaign, should be well calculated, feasible and should have no more than 7 rewards – too many options spoil the backer for choice.
And all of this should be well linked with your social media outlets to increase credibility and offer more calls to action.
Point 4: INITIATE
You’ve finally made it to the point where you actually initiate the campaign. Make sure it lasts no longer than 30 days from the public launch as urgency sells. And you need to get that previously pledged 40% up on the site as soon as you go live.
Phone people, email them and generally get on their case until they have pledged.
Point 5: PERSEVERE
Keep the campaign going – answer questions, post updates, keep on top of networking, increase credibility. Consider adding new reward packages as old ones are used up and make sure to mark certain goal points with updates. And if it’s going really well add stretch goals.
Keep the investors and buyers excited and involved as this will lead to happy customers, a good reputation and referrals and recommendations!
So there you have the Five Points of Crowdfunding, proving that you CAN indeed find tulips in November.
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And if you’re going through the crowdfunding process, and need help with business plans, or pressing the flesh with investors, or you just want a financially savvy advocate to help you during your pitching, do get in touch through the contact form below.
Aiteo Consulting offers accounting, finance and advisory services to start-up and growing technology businesses. Jonathan Smith, the MD of Aiteo Consulting, is a registered mentor for Startup Direct.
Startup Direct is a delivery partner of the Governments Start Up Loans Scheme that provides up to £25K in start-up funding for entrepreneurs wanting to start a business.
Paul Grant is the founder of The Funding Game, a workshop initiative which aims to offer entrepreneurs a clear understanding of how to get their businesses funded.