4 Crowdfunding Mistakes to Avoid
Crowdfunding isn’t a new concept but, yeah, lately it’s been getting more popular day by day. There are many famous platforms that host crowdfunding campaigns such as Kickstarter, Indiegogo, RocketHub, Onevest. Needless to say, these platforms are now widely popular places for “Crowdfunders” to look for potential investors who can take their project to the next level.
Crowdfunding is defined as, “The practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet”. (Wikipedia)
Whether it’s a cause, service, project, or a business venture, running a successful Crowdfunding campaign is not as easy as it may seem. Well, it may be easy to hit the submit button and wait for it to get a load of interested candidates. However, the “creating interest “ part takes a lot of effort on the part of the project creator before the true goal can be realized.
On the bright side, many small business ventures and projects have managed to raise a significant amount of money using this technique. And according to Entrepreneur’s June 2013 issue, the number of successful campaigns seems to be rising every year.
Regardless to make sure that your crowdfunding campaign doesn’t go wrong and gets you the result you so desire, it is important that you understand where people usually go wrong while running such campaigns.[Tweet “Run a successful #crowdfunding campaign for your #business by avoiding these 4 common mistakes”]
So, let’s take a look at some critical crowdfunding mistakes and make sure our campaign runs smoothly and successfully.
You Are a Nobody
If you are a nobody and nobody knows you, nobody will care. You have to build a brand identity before you can go around asking for donations. People don’t invest their hard-earned money in a cause or a venture they are not familiar with. They will view anybody asking for money, who they don’t know, with an eye of a skeptic. You have to build an awareness of your project and then the trust part comes next. Once you’ve aced the awareness and trust, then and only then will you get a donation. Do this through videos, testimonials, pictures, or whatever it takes to convince the investors.
A great idea would be to tie your project to somebody who everybody knows. For example, a celebrity or another well-reputed organization or personality who can endorse your brand and tell them why people should be interested. Remember how actress Kristin Bell helped raise $5.7 million through crowdfunding for the Veronica Mars Movie?
As Alon Goren, CEO and co-founder of Invested.in says, “Nothing attracts a crowd more than a crowd!”
Your Message Isn’t Clear
While writing up your pitch, it is crucial for you to clearly and concisely state your value proposition and benefits. If you have a lot of people asking how you plan to achieve your goals (and no conversions), then you have clearly failed to deliver your message. Include all details, pictures, backup plans, testing and screening pitches, etc. Make sure your potential funders don’t have to ask too many questions before they invest.
You Are Just Like Many Others
Competition, competition! This is one thing that is hard to avoid. However, it is important for you to set your venture apart from the other tens of thousands of ventures who have the same or similar purpose. The key here is not to come up with a project that is oh-so-different. Rather, try to position yourself differently and make your ideas sound unique. This is a never-failing marketing strategy and you need to learn how it is done before you put it up online!
You Have No Idea How Much To Ask For
Asking too much or too little can also be a problem. If you ask for too little, you might get the donations in no time. However, it probably won’t be enough and when you ask for more, you’ll make the mistake of giving the impression that you’re greedy or desperate. On the other hand, asking for too much will drive away a lot of potential funders who would have been willing to invest had you lowered the donation amount. A reasonable figure is attainable and your fans are likely to contribute because it appears realistic.