Get All Access for $5/mo

Leverage Video to Cut Through the Crowdfunding Clutter A picture is worth a thousand words but a good video can be worth a lot of dollars.

By Ben Chodor Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Whether you're looking to fund the next big startup or just a really great potato salad, crowdfunding is an essential tool for entrepreneurs to raise funds. Last year the global online crowdfunding industry raised about $5.1 billion for thousands of businesses and startups in need of cash.

Kickstarter, Indiegogo or any of the "traditional" platforms can help you stand out in front of potential and existing consumers. Newer, equity crowdfunding campaigns serve a different purpose. The rewards (equity in a company) are distinct and clear. You can raise your business profile and gain new investment in your business with either, if you leverage these platforms correctly.

Related: 8 Ways to Optimize Your Video Content and Improve Your SEO

With widespread use comes good and bad tactics to get crowdfunding campaigns noticed. A common mistake is a poorly produced video to promote the campaign. The video that accompanies the main business pitch is one of the first things that potential investors see. This is a crucial tactic to get right. I was recently told by an executive at a major crowdfunding site that campaigns with great videos tend to get 300 percent more investment than those without.

You can increase the amount of funds that you raise by following a few basic tips. First, the video should deliver your company's core message. Highlight your management team and your company's unique value propositions. You should offer a bird's-eye view of your company with the creative and entrepreneurial angle of Shark Tank.

Your video needs to capture and share the most important aspects of your company and showcase why it deserves to be funded – in less than two minutes. Make sure it answers a few questions that buyers and investors will likely have:

1. Why is this startup important to the industry it's in? Include your unique selling points.

2. Who are you? Buyers and investors want to back a company and a management team they believe in.

3. Who is your audience? This is key. Video is one of the most personal mediums. Speak directly to your core audience.

4. What is the product/platform, and how does it work? You have give folks a clear understanding of how your product works if you want them to back it.

5. How will investors benefit from backing your project? If you are using a "traditional" crowdfunding site, this answer is usually pretty simple and rewards-based. Remember, consumers want great perks that matter to them. For newer, equity crowdfunding campaigns, answer the questions above and emphasize your solid business plan.

Related: 3 Tricks to Create Premium Video Content on a Budget

But one great video is not enough. When the campaign has gained traction, promote it through additional digital marketing and PR tactics. Additional video expands your original content to highlight your company's footprint while keeping your existing core audience engaged.

I believe that we'll see more companies, from Fortune 500 brands to startups, begin to leverage video for more of their external communications, particularly investor relations. That includes first-blush exposure from being on an equity crowdfunding platform to ongoing, video-based earnings calls.

As technologies for video production and distribution change, startups and small businesses can capture and produce cost effective yet high-end, quality video that was once reserved for big budget companies. The video that you create can be distributed on desktop, mobile and now into your living room with the explosion of players entering the Over The Top (OTT) space.

Companies that want to be seen as an upcoming industry disruptor should lean on video as a means to gain a supportive bandwagon of consumers, investors and fans. It's a genius tool to gain traction and cut through the clutter.

Related: 6 Tricks to Get More Eyeballs on Your Videos

Ben Chodor

Entrepreneur, Digital Media and Digital Health Innovator & Mentor

Ben Chodor is the Co-CEO of Sherpa Digital Media, a provider of digital media solutions, infrastructure services and media intelligence tools to organizations nationally and globally. Over the past 25 years, Ben has established himself as a global leader in the world of online digital media, from online video to streaming media and OTT.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

Mark Cuban Warns About Fake Fundraisers on Social Media After Assassination Attempt: 'Makes Things Worse'

Mark Cuban warned his followers about online grifters who try to capitalize on tragedy.

Business Culture

Want Engaged Employees? Act Like a Nanobubble

Nanobubbles revitalized Lake Elsinore by addressing its root problems, offering a metaphor for sustainable employee engagement.

Starting a Business

He Started an 'Accidental' Business at 25 With Just $2,000 — Then Gave His Product to the Pope: 'Anyone Can Be an Entrepreneur'

Michael Aram, founder of the namesake luxury home and jewelry brand, learned the art of metalworking in India — and used it to launch a global brand.