Crowdfunding's New Self-Serve Options and Tools
Get the working capital your business needs from Entrepreneur Lending, powered by CAN Capital. Learn More »
Earlier this month the University of California, Berkeley posted a job on its career board for a crowdfunding project manager. The post advertised for a crowdfunding expert to help launch and manage a new campus-wide crowdfunding platform under development and guide users to execute successful fundraising campaigns.
More individuals and organizations are moving away from the well-known third-party crowdfunding platforms and are opting to host their perk- or donation-based fundraising campaigns on their own websites. Widely available tools (called white-label crowdfunding software) allow these self-hosted campaigns to thrive. Projects using this independent approach for raising capital have included Roberts Space Industries’ Star Citizen game (which raised $48 million), Lockitron ($2.2 million) and Tile ($2.6 million).
While the self-serve approach has downsides, such as no cross-pollination of backers from other campaigns, the benefits of using these plug-and play-white-label options are increasing as the technology solutions proliferate and it becomes easier to reach a crowd via pay-per click advertising and Facebook-sponsored posts.
These posts usually appear in a Facebook feed as an offer to “preorder” a cool consumer product. When users click on the ad, they are often led back to a “self-serve” crowdfunding campaign embedded on the offering company's website. Combining a self-hosted campaign with sponsored posts on Facebook has proved to be an effective approach for entrepreneurs wishing to reach backers beyond their own networks.
Self-hosting a campaign, whether it's done by a university, nonprofit or a solo entrepreneur, can result in the following advantages:
- Saving the platform fee of 4 percent to 9 percent of the monies raised
- Setting and being able to adjust the duration of the fundraising
- Controlling the branding
- Keeping the traffic on the company website
- Building a pool of backers with whom the company can be in direct contact
The self-serve approach works best when the organization or individual has an existing crowd to be leveraged (followers, members, customers, students and alumni) or if the company or organization is prepared to build one through marketing.
When selecting a white-label solution, compare criteria such as costs (set-up expenses, commission-based licenses or one-time fees), feature sets, degree of customization allowed and support offered. Some solutions can have the crowdfunding proposition up and running in 30 minutes or less. A handful of the growing number of white-label options include Crowdtilt, Launcht and Crowd Engine.
You Tube announced in May that it is adding a crowdfunding feature, allowing video creators to raise money from fans directly on the site. This feature will allow artists to gain support for their CDs or tours directly from fans without having to run a separate campaign on a traditional crowdfunding platform. Although ideal for musicians, this new feature can be tapped by entrepreneurs and inventors to pitch backers as well.
YouTube rival Vimeo offers its own benefits for crowdfunders. Earlier this year Vimeo established a $500,000 kitty to support crowdfunded filmmakers. Filmmakers with successful campaigns of at least $10,000 (raised on either Kickstarter, Seed&Spark or Indiegogo) have the opportunity to obtain money and marketing support -- as well as a Vimeo Pro account -- in exchange for an exclusive digital-distribution window through Vimeo On Demand.
Plus campaign support is arising via Linkedin crowdfunding forums, free meetups and webinars, campaign managers for hire and PR companies with experience in marketing crowdfunding campaigns. As the crowdfunding industry grows, an ecosystem is offering entrepreneurs a variety of new ways to gain the most out of their funding campaigns.