Anatomy of a Kickstarter Backer
Free Book Preview Money-Smart Solopreneur
Crowdfunding sites like Kickstarter and Indiegogo are rising in popularity as those aiming to launch a business, book, idea, product, film or the project of their dreams craft campaigns in pursuit of investors.
A fundraising goal must be set and a sufficient number of investors secured for a campaign before any money is exchanged. So there’s an art and science involved in properly launching a crowdfunding campaign. If the fundraising target is high, finding more investors who are willing to pitch in at a higher level is desirable. Kickstarter's statistics indicate that most of its successfully funded campaigns have been to raise less than $10,000.
Over the past year I have backed three Kickstarter campaigns, all very different in scope. I’ve invested in the campaigns of Abington, Mass.-based entrepreneur Lindsay Tia, New York City authors Chris Smith and Austin Allison and Springfield, Mass.-artist Sarah Concannon. Here are four things to know about a prospective crowdfunding investor, based on my experiences:
Related: Go Fund Yourself
1. A backer may be someone who has invested in other campaigns.
More than 7 million people have backed Kickstarter campaigns, with more than 2 million individuals financing more than one, according to Kickstarter.
When launching a campaign, consider ways to reach potential investors who already believe in crowdfunding.
2. Someone you already know (sort of) might become a contributor.
With each of the three campaigns I invested in, I had a loose personal connection to the organizer. The entrepreneur I financed is launching a fashion business. Tia has sold her product in a boutique that I own and I have met her enough times to be convinced that she could run a successful business.
I knew the authors whose campaign I invested in as well. I had heard one speak at events and the books (combined with a webinar thrown in as part of the campaign) seemed like sound investments.
While I never had previously met or heard of Concannon, I had been sent word of her Kickstarter campaign by a friend of a friend of the artist. Although I didn’t know her personally, the campaign offered a glimpse of the person behind the campaign. And the friend-of-a-friend connection felt like a good enough endorsement for me.
When launching a fundraising campaign, take stock in your current network and your network’s network because a successful launch will highly depend on your ability to sell to people who already know, like and trust you.
Most campaigns don't get funded. More than 100,000 Kickstarter campaigns have never received their funding because they didn't reach their fundraising goal. Just slightly more than 70,000 have been financed. It will be very long haul if you don't tap into the network of people who believe in you.
3. Your backer is asking, What’s in it for me?
In all three campaigns that I've invested in, I received something tangible from the deal. With the artist, I got a painting. With the author I received books and a webinar. From the entrepreneur's campaign I have the opportunity to name a product line and sample products.
As you launch your campaign, step into the shoes of a potential backer for a moment. Then determine what you could give that the investor would want.
Perhaps with the exception of charitable campaigns, most backers don't invest just for the warm and fuzzy feeling that they have helped a struggling entrepreneur. Backers probably want to get something, a product or experience that’s one of a kind. In my case, all three times I walked away with something I couldn’t go out and buy on the open market.
4. Plan your campaign.
Your backer wants to see a campaign that's well organized with video, photos and detailed explanations about where the money is going. Your campaign is a reflection of your ability to successfully launch your dream. If you can’t put together a campaign that wows people and effectively tells your story, then how are you going to launch the business, book, video, or art project? Your campaign is a reflection of your selling and marketing abilities, both of which will be necessary for launching your project after the money is raised. So make sure your crowdfunding page is awesome and then spread the word through blogging, social media and press releases.