8 Things to Do Before Launching a Crowdfunding Campaign

CrowdFunding

Crowdfunding might be right for your business if you don’t qualify for a commercial loan (e.g., because you haven’t developed a credit history or don’t have collateral), if you are good at social networking in particular and networking in general, or if it can be utilized as a marketing tool to generate a lot of buzz about your products, services or technology.

Before deciding to launch a crowdfunding campaign, if its success is important to you, then do everything that you can to prepare to achieve your funding target. Most crowdfunding campaigns fail: slightly less than 1 in 3 reaches their financial goals. In many cases this is  due to lack of advance planning and preparation.

Here are 8 things to do before you pitch for money on a crowdfunding platform.

(1) –Do your research on whether your type of business/product/service has much success in crowdfunding and, if so, on which platform(s).
–(2) Chose the type of crowdfunding – donations, rewards, lending or equity – that is appropriate for your stage of business, the amount of money that you need and what you are going to do with the funds.
(3) –Study successful campaigns and learn from what they did right. Try to find someone who has had success in crowdfunding to coach you.
–(4) Develop and follow a pre-launch marketing plan. You want to generate interest before you start asking for funding. The start is crucial.
(5) –Prepare a plan of action for what you are going to do when, what you are going to offer, and how you are going to follow-up. Don’t promise rewards or results that you won’t be able to make good on (e.g., because you won’t have the production capacity).
(6) –Develop your story so that you can pitch with passion and keep the buzz going after the launch.
(7) –Know what’s in it for the crowd that you are going to pitch to so that you can make what you offer attractive to that group; i.e., know your audience and market appropriately.
(8)  Be aware that sometimes it is unwise to try to go it alone, especially if you are needing to raise large amounts of capital. You may need to hire a professional, e.g., an attorney (to help protect your interests and make sure that you are operating legally in offering equity positions), a graphic designer (to develop marketing materials) or a marketing consultant (to manage your campaign).
At the Kansas SBDC, one of our areas of advising is how to access capital; and, we recognize that financing solutions are not one-size-fits-all. Our business advisors can help you figure out how much money you need to bring in to launch a business start, new product or expansion. We can also help you evaluate options for bringing together the financing you need and prepare you to work with the resources you chose.
Related articles:
Laurie Pieper, Ph.D.
Business Advisor
Washburn University SBDC
America’s SBDC Kansas
This entry was posted in business growth, Business Planning, Capital/Financing/Grants, social media/marketing, success, Uncategorized and tagged , , , , , , , , , , , . Bookmark the permalink.

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