7 Tips to Get Crowdfunding for Your Business

Collaborative Post 

If you’re an entrepreneur with a stellar business idea, but not enough finances to move your business past the ideation phase, crowdfunding can be a viable strategy to get the wheels turning.

But what exactly is crowdfunding? And how do you gather an audience to believe and fund your business idea?

First of all, crowdfunding is the process of acquiring funding from an interested crowd through the internet. There are a slew of popular platforms that entrepreneurs can use to launch their campaigns, as well as a variety of key strategies to ensure a successful campaign.

The people or organisations who contribute a stake to your campaign are the business’s backers. In return for their investment, they may receive incentives such as equity in the company, exclusive products and services, or simply the satisfaction of contributing to the business’s objective.

If you’re looking for an alternative way to acquire much-needed equity to operate your business, crowdfunding can be a fantastic option. Here are seven tips on how to make the most out of your crowdfunding campaign.

1. Do Your Research

Before you launch your crowdfunding campaign, it’s crucial to have a solid grasp of the process before jumping headfirst into it. There are a plethora of crowdfunding platforms you can use to acquire funding, so you and your co-founders may have to discuss at length the pros and cons of each platform.

In addition, you should also read up on successful crowdfunding campaigns of businesses in your industry. This way, you’ll work out the viability of this financing decision for your market offering. You can even learn a thing or two about what has worked in the past and what flopped.

That said, there are definitely times when crowdfunding is not the best option for your business. For instance, some business models work best only when they’re launched immediately to the public, as hype may wane in the following months. In other cases, well-funded competitors who see promise in your idea may steal and reskin your offering, which can be a devastating blow to your business’s long-term life cycle.

In these cases, it might be best to explore other options for funding. See: ‘6 Ways to Help Finance Business Growth’.

2. Create a Compelling Video

One of the most important elements of a successful crowdfunding campaign is a compelling video.

A short video is your chance to sell your business idea and get people excited about supporting your venture. Its main job is to present the information in an engaging and visually appealing way, with the ultimate purpose of drawing in backers.

Your video doesn’t have to be overly produced or expensive to succeed. Keep your video short (2-3 minutes is ideal). As long as it tells a story that can resonate with potential backers, this marketing medium can be a viable attractant for your desired demographic. 

3. Set a Realistic Funding Goal

When setting your funding goal, it’s important to be realistic. Your audience wants to feel like they’re making an impact in supporting your objectives—and if you set your target too high, they may be turned off by seeing such an unattainable figure.

On the other hand, if you set your goal too low, you may not raise enough money to actually get your business finances in shape.

It’s not a good look to constantly increase your business funding requirement as soon as you hit a milestone. As such, it’s crucial to choose a funding goal that mirrors your business’s objectives and helps fund the money-generating operations of the company from the outset.

4. Offer Rewards at Different Levels

One of the main draws of crowdfunding for many people is the incentives they receive from supporting your campaign. As such, it’s important to offer rewards at different pledge levels.

When choosing rewards, be sure to offer something at each level that would appeal to different types of backers. For example, someone who pledges $10 might want a t-shirt while someone who pledges $100 might want an exclusive VIP experience related to your product or service. Get creative and think outside the box when coming up with rewards!

5. Have a Plan for Social Media 

Social media can be a powerful tool for promoting your small business—but only if used correctly. Posting off-the-cuff updates about your campaign on social media can help keep your business on a consumer’s radar, but it’s not going to be as potent as laying out a social media calendar.

Decide which platforms you’re going to use, how often you’re going to post updates, and what type of content you’re going to share to update your backers and draw in new ones. As a crowdfunded company, transparency is even more crucial to success than it is for other types of businesses.

While rolling out long-form blog updates is important, having an active social media page where backers can contact you can give them peace of mind knowing that the project is active and won’t randomly get abandoned.

6. Reach Out to Your Network 

When launching a crowdfunding campaign, don’t forget about the people who already know you within your immediate vicinity—aka, your friends, colleagues, and family.

Tap into these people early on and let them know about your campaign goals. Don’t rely on them throughout the entire campaign’s lifecycle, but encourage them to get the word out and help your business grow through their local community.

7. Engage with Your Backers

Once people have supported your campaign financially, it’s important to keep them updated on your progress—regardless of whether or not you reach your initial funding goal!

Send out monthly newsletters letting backers know what’s new with your business and how their money is being used. You can even consider creating a community through Facebook where backers can interact with you and the community.