5 Essentials for a Successful Crowdfunding Campaign

Crowdfunding is the sweat equity of financing. Every company, no matter how small, can succeed but it requires a lot of work.

learn more about Seymour Segnit

By Seymour Segnit • Oct 31, 2014

Opinions expressed by Entrepreneur contributors are their own.

In an ever-changing marketplace, large businesses struggle to keep up with the latest in technology and innovation. Corporations move at a snail's pace, committing millions to research and development, while tech-savvy entrepreneurs often innovate in months (and sometimes days or hours!) rather than years.

As a result, crowdfunding (often coupled with social media advertising and email marketing) is positioning small business as the "go to" for innovation and information services. In 2013, crowdfunding raised more than $5.1 billion worldwide and is expected to hit $10 billion by the end of this year.

Related: 6 Tips From Kickstarter on How to Run a Successful Crowdfunding Campaign

With this growth comes greater competition, so in most cases, each crowdfunding campaign need to be even more compelling than the last to snag the attention — and the dollars — of the growing crowd.

So how do you do it? If you are considering crowdfunding, you have likely already read tips and tricks from those that have "been there, done that." You know you need to create a video, share your campaign on social media, and test the market with friends and family early on – months before you launch, even - to get a steady flow of contributions going from the start.

Consider these five little known suggestions to help you supercharge a successful campaign:

1. Presentation is everything

How you present your idea on your campaign page is likely more important than the idea itself. You have just seconds to grab the attention of your potential supporters, so make sure your campaign page and video has a clear and concise message that pleads your case with the who, what, when, where and why – especially the why.

For the video, if you are not a strong presenter or are uncomfortable on camera, get someone else to tell the story. Every word throughout the entire video must have deliberate intention and meaning. Open with a question related to why your product is needed. Include testimonials from those who have seen your idea and loved it.

A decent camera phone with enough light will record at high enough quality to look professional, if you include the right messages behind it.

2. Pay to promote

Some crowdfunding platforms, such as Indiegogo, allow campaigns to begin using contributions before the campaign is over, so be willing to return a portion of your contributions to your campaign to increase its overall reach.

Use contributions strategically, such as to create sponsored posts on Facebook. A PR advisor can advise on overall positioning and promotion, including how to write and post a press release on the campaign launch. Consider partnering with a search engine optimization expert to help contributors more easily find your campaign.

Contributions invested wisely will increase the total number of contributions and more than cover what you have spent.

Related: How to Market Your Crowdfunding Campaign

3. Press releases don't equal direct leads

A press release launching your campaign, and any articles that appear as a result, can go a long way to build awareness and credibility. They will remain online, and easily found, indefinitely if sent over a wire service, such as Business Wire or PR Newswire, but don't consider them lead generation tool.

Even if your team consists of one person - you - coupling traditional public relations with advertising and sales tactics will help you get additional leads and turn them into contributions.

4. Keep communicating, even to naysayers

There is nothing worse than contributing to a campaign and then never hearing a peep again until the product ships -- if it ever does. Keep your contributors in the know on shipping dates, interesting milestones and relevant news. That builds credibility for you and the campaign.

If they have questions, respond promptly. If they praise you publicly, respond with gratitude. If they complain publicly, respond with a clarification or apology, as appropriate. Just respond.

5. Return for a second round of funding

With traditional funding, businesses often seek a seed round from private investors or banks, then progress, regroup and return for a second "round' of funding. You can do the same with crowdfunding, which is one of several reasons to start with a modest request.

While you might need $500,000 or even $1 million to turn your idea into a real shipping product, asking for that amount is usually a mistake. Set the goal at the minimum you need to take the project forward. A goal of $10,000 or $25,000 is much easier to reach. If you succeed far beyond that goal, it is a much more exciting story for the media.

It's especially important when using a platform like Kickstarter, which only releases contributions if you reach your goal. When you need more capital to expand the capabilities or international reach of your product, you can return to ask for a second round of funding from the crowd.

Crowdfunding is not necessarily going to be the miraculous savior to your suffering business or a get rich quick scheme. It is, however, an extraordinary model that, if done properly, just may help you fund your industry's next big idea.

Related: 4 Famous Crowdfunding Fails

Seymour Segnit

Co-inventor of thingCHARGER, the No. 1 crowdfunded mobile accessory to date

Entrepreneur Seymour Segnit has first-hand experience with the highs and lows of running a highly successful crowdfunding campaign, with his thingCHARGER becoming the No. 1 crowdfunded mobile accessory to date with more than $700,000 raised since launching in October 2013. Prior to thingCHARGER, Segnit attended the Westminster School and Oxford University, worked in advertising and broadcasting, and co-founded a venture-funded technology company in Silicon Valley, California. He's also the host of the new Kickass Crowdfunding Show, launching this fall, which will bring in other experts from around the crowdfunding world to help listeners learn the best practices required to fund their ideas.

Related Topics

Editor's Pick

Have More Responsibilities at Work, But No Pay Bump? Use This Script to Get the Raise You Deserve.
Black and Asian Founders Face Opposition at All Levels — Here's Why That Has to Change
Business News

Frontier Airlines Just Announced Its All-You-Can-Fly Summer Pass for $399. What's the Catch?

As travel begins to pick up, the airline hopes unlimited travel will jumpstart its business.

Buying / Investing in Business

Here's What You Need to Know About the Changing Face of Venture Capital

The picture of a venture capitalist is changing. Gen Z angels, digital natives and purpose-driven investors are leading the charge in venture capital, aiming for higher returns with less risk.

Business News

This New AI Technology Will Turn Your Ex Into a Red Flag, Snake or Even a Dog

Picsart's "Replace My Ex" might be the next-best solution for the heartbroken.