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Successful crowdfunding campaigns are rarely down to luck. If you want to attract new customers, promote your business and surpass your funding goal, careful preparation is required. Check the to do list below to see if you’re ready to go!
The amount of “pre-committed” (equity) or “guaranteed” (rewards) investment required depends on the size of your existing network and your marketing budget, but at least 30% is vital. This is as a consequence of several important reasons. Firstly, most equity platforms will not allow a public launch until you demonstrate your “investability”. Secondly, in the context of both rewards and equity, backers only back projects that have backers. Campaign data consistently shows that the vast majority of projects or businesses that get 20% of their goal on the first day succeed.
For equity campaigns, you’ll be expected to include documentation to support investors in making their decision. Typical documentation includes: business plan, financials, investor deck and S/EIS Advanced Assurance (if eligible). Other documentation such as proof of Intellectual Property, may be required depending on your business.
A common crowdfunding error is expecting the crowd to find your campaign after launch. It is instead vital to bring your crowd to your campaign, with the buzz around your campaign peaking at or just after launch. We recommend spending at least 6 weeks “priming” your crowd before launching on top of building a marketing strategy to entice new followers to back you.
Building your crowd prior to launch is important. You also need to ensure existing followers, include your friends and family, are aware of your launch and are ready to contribute. If a good first day is important, ensuring your network know of your launch is the way to ensure your campaign gets off to a good start!
All crowdfunding campaigns require a video and a campaign pitch. In rewards campaigns, there is a greater emphasis on media content such as imagery, GIFs and graphic design work. Equity campaigns require an executive summary, an elevator pitch, key bullet points as well as information about the team. High production quality is beneficial, but having a business’ message to appeal to you funding audience is vital!
It is still the case that the majority of rewards campaigns deliver late, under-deliver or fail to deliver. This fails to inspire confidence in your backers for your future ability to deliver and could negatively impact your business’ reputation. Understand the demands of your campaign in multiple scenarios and ensure you can deliver rewards to your backers.
Founders always underestimate the amount of time needs to be dedicated to a campaign. Communicating with backers, preparing for fulfilment and implementing your marketing plans will take a significant amount of time out of your day. This can be hard to plan for but as a minimum, ensure your campaign is not clashing with a busy time or with a large amount of staff holiday. Prepare for the worst and put time aside in your diary.