You have a startup idea, want to raise funds, but don’t want to offer an equity stake to angel investors or venture capitalists just yet. Is it possible? Absolutely. In order to achieve this outcome, you will have to raisefunds through a rewards based crowdfunding platform. What are tricks of the trade to get your startup idea funded on a crowdfunding site? Here is a five step summary that will help you take your startup idea to the next level through online fundraising.
1. Finalize your product / service offering
Decide on what you would like to sell to your supporters or investors. If your startup has created an innovative hardware based product, you could pre-sell it at promotional prices. If your venture has created a software based product or a smartphone app, you could also pre-sell a monthly or annual subscription or membership at heavily discounted prices. Some alternative ideas include creating branded swag like t-shirts, mugs, or similar merchandise. You could also sell visibility and acknowledgement such as naming rights to a future product or a public mention of thanks on your website and social media.
2. Tell a story
You need to get your supporters sold on your vision and make them care for your startup idea. This is an art. Elon Musk’s Tesla is not just selling solar roofs, it is also selling you the idea of using renewable energy to reduce our carbon impact. You need to think from supporter’s point of view and ultimately persuade them how your product or service will add value to them. The best way of doing this is to create compelling multimedia content. Hire professional help if required. Often the difference between success and failure of a crowdfunding campaigns lies in the quality of your video content.
3. Start strong
The first and last day of your crowdfunding campaign are the most important days of your entire campaign in terms of fundraising. People tend to underestimate the power of social media and email. Research has shown that simply sharing your campaign on Facebook helps increase fund collection by over 350%. Email to friends, family, and colleagues can often contribute to one third of fundraising success. Use Facebook, Twitter, LinkedIn, WhatsApp, and emails to share your story with your network and beyond and start strong on your first day.
4. Amplify reach
Do not ignore the power of online marketing and public relations to amplify your reach beyond your known networks. Run a public relations campaign to maximize quality and quantity of coverage to get the word out. Supplement your public relations activities with paid online marketing activities on Google and Facebook to find new backers or supporters for your campaign.
5. Day to day campaign management
There is no right or wrong way to reach out to your supporters. You need to keep learning as you keep doing it. Is public relations working? If so, you need to prioritize public relations activities over other efforts. Are WhatsApp messages driving the results? Then, that is the way to go. Monitor your results and continuously refine your campaign approach. Also, don’t forget to keep posting regular updates on achieving major milestones to update your backers.