5 Ways to Learn the Nuts and Bolts of Crowdfunding
Crowdfunding is a multibillion dollar worldwide industry that continues to disrupt the traditional world of corporate finance, as well as change the way products go to market. Businesses new and old, small and large, are now incorporating both rewards crowdfunding and equity crowdfunding. The capital raising playbooks have changed. The interest in how to use crowdfunding and equity crowdfunding effectively is reaching new heights every day.
Where is the good information?
It's no surprise that a lot of good information is already out there about how crowdfunding works. Unfortunately, though, bad information is also rampant on the internet. In my JOBS Act law practice, I field questions every day as someone who "quarterbacks" equity crowdfunding campaigns for companies raising millions of dollars of new capital.
These questions make it clear that most people still do not truly understand how crowdfunding works, or what it takes to raise capital successfully using these amazing tools. Clearly, more education is desperately needed.
Related: The Basics of Crowdfunding
I try to do my part with Entrepreneur.com columns and media appearances. But I've found that there are some other ways to help yourself and learn the nuts and bolts of crowdfunding:
1. Look at successful crowdfunding campaigns.
Take the time to study and see how a successful crowdfunding campaign worked. Imitation is the sincerest form of flattery. Looks at crowdfunding home runs like Pebble Time and Coolest Cooler that both raised millions of dollars with rewards crowdfunding campaigns.
Watch their videos. Look at their perks. Learn from their successes. See the common threads that go through successful rewards crowdfunding campaigns: a great video, simple and easy-to-understand text on the campaign or offering page, a clear “call-to-action” and great rewards.
2. Look at unsuccessful crowdfunding campaigns and see what went wrong.
Kickstarter, Indiegogo and other crowdfunding platforms are filled with failures you can learn from. Did that make a bad video? Did they not explain their campaign well? Did they have bad rewards or perks? Look up these companies online and on their social media and see what they did to market their campaign.
In most cases, you will see that they did not market at all, the biggest mistake a crowdfunding campaign can make. Do some research, and don’t make the same mistakes.
3. Learn from marketing experts.
Crowdfunding is all about marketing. Getting the word out, driving traffic and messaging correctly are the keys to every successful crowdfunding campaign. If you know how to market your business or your product, you know how to drive traffic to a crowdfunding campaign.
If you are a marketing novice, read books by marketing gurus and watch their online videos. Learn from people like Gary Vaynerchuk and Seth Godin who have large amounts of great material available online. Read, learn, and implement! A crowdfunding campaign with poor marketing will be a failed crowdfunding campaign.
4. Attend a crowdfunding conference.
To do a deep dive and learn about both rewards and equity crowdfunding, one of the best methods is to attend a crowdfunding conference. One such event is The Global Crowdfunding Convention in Las Vegas run by crowdfunding pioneer and top expert Ruth Hedges. Hedges, whose roots in the crowdfunding industry are exemplified by her invitation to the White House for its Crowdfunding Champions of Change event when the JOBS Act was passed.
Hedges puts on a multi-day event that covers all aspects of the crowdfunding world. To illustrate how far crowdfunding has come in a short time, this year's Global Crowdfunding Convention, held at Planet Hollywood October 23-24, 2017, is sponsored by Microsoft.
5. Learn how to make a compelling video.
A great crowdfunding video enhances your chances of success. A terrible video practically guarantees failure. In addition to watching videos from successful campaigns and seeing what they did right, learn a little about video production yourself.
There are tons of YouTube videos about simple video creation -- things like basic lighting and decent audio -- that make a huge difference in what your crowdfunding video will ultimately look and sound like.
Learn how to tell your story with passion, explain your campaign, and most importantly, how to ask for either a donation or investment. The "ask" is an incredibly important part of every crowdfunding campaign, and one all-too-often missing -- particularly from failed campaigns.
So, crowdfunding fans, with these tips you can read, research and learn on your own, or have it spoon fed to you in Vegas while you eat at a ridiculously huge buffet.
Also, try to get tickets to the latest Cirque Du Soleil show. Either way, education about how to prepare for, launch and conduct a crowdfunding campaign is the key to all success in this amazing new world of raising capital online.