Crowdfunding

Starting Up?

Crowdfunding is a great way to raise funds for your startup and it isn’t as easy as adding some content and a brief description of your product/service and expect money to magically appear because it won’t. That is why I’m going to tell you what you need to do to start a crowdfunding campaign.
1. Prelaunch Campaign 
An email list and survey are actually two of the many things within a prelaunch campaign which is what you should start with before going head first into creating a crowdfunding campaign.
2. Email List
If you’re a starting a new business and don’t really have the funds to move forward without some help this is one of the first things you should do to run a successful campaign. Mailchimp is a great site to store an email list. There is also an app as well which is easy to use and though there are some premium features most of it can be used for free! Once you create an account on mailchimp or another email list site you’re going to need to find a way to get email addresses from people which brings us to the next step.
3. Survey
Next, I recommend you create a survey with a few questions. An excellent site you can use for making a survey is typeform. Again, this site has some premium features as well, but it’s mostly free and easy to use! At the end of the survey there is a feature where you can put in to ask for their email address.
4. Get an LLC/ Bank account
Unless you are already incorporated, make sure to set up an LLC for your crowdfunding project and get a business bank account. Revenue from rewards campaigns and pre-sales of goods are taxable income so talk to your CPA. LLCs are rather simple and inexpensive. You can use sites like legalzoom or even get a lawyer to help. In my previous blog called: The Logistics of Creating a Comic Book Company I explained the forms and the publishing you’ll need to be recognized as an LLC.
5. Social Media
This I stress is a HUGE  step! Connect with your peers and with the peers of your peers! Go to Facebook, Twitter, Instagram, hell even Pintrest and market yourself on there!
6. Research and Pick the Right Platform For You
There are a bunch of different crowdfunding sites that are all great in their own way, but some have specific reasons to be used like, gofundme is used for raising money for more personal reasons than a business while kickstarter and indiegogo are more for business related funding. Also, you need to do your research on which site you’d rather use because for our business we had our heart set on kickstarter until we actually looked into it and on kickstarter if you don’t raise your goal by the time you have you don’t get any of the money raised at all. Now, indiegogo is different in the sense of if you don’t raise your complete goal you get anything that was raised. There is one thing you need to know and that is if you do reach your goal you are charged by kickstarter or indiegogo a percentage of your funds because well nothing is free.
7. Set a Funding Goal

Every campaign and every situation is different, you have to do your own calculations. In the most basic scenario your funding goal needs to include these things:
– Cost of completing the project
– Cost of fulfilling rewards
– Legal
– PR & marketing
– Platform & processing fees: ~10%
– 30% cushion
8. Secure the first 30%
Just market your product/business all over social media in moderation by using the free app buffer. Get at least 100 emails if possible in your email list. If you secure your first 30% in the first 24-48 hours you’ll have a better success rate with your campaign. Also, if you can raise your minimum funding goal within a week it is much better to do so than in 3 weeks. If you shoot for a lower goal, but not too low you should be fine, but definitely do research on that because you choose a stretched out goal like you only really need 25,000 and you set it for 100,000 you can risk the chance of not reaching your goal.

SideNote

Another thing you should know is people want to support something that seems to have momentum and actually getting some reach with people. If your goal is set too high even though you have 25,000 raised they still will see a pretty empty bar still due to the stretched out goal so make sure to do your research on that as well!
9. Set Reward Tiers
People like to get something for their contribution so come up with a few ideas for rewards for the amount of money they give to you. Some examples are: t shirt, signed prints, collectible, etc. I suggest you look up some related projects to yours and look at what they are giving away as rewards.
10. Create Your Story
The story is the written description of a crowdfunding campaign that will be visible on the campaign page. It’s one of the most important elements of the campaign. This should include what your project is, what you need the money for, and what you offer in return, as well as anything else that potential backers may need to know to be able to decide whether or not to support your campaign. Make your story at least 400-600 words and include images or renderings of prototypes as well as video to drive the message home. Have your story reviewed by complete strangers and get the feel from them on what they think about it.
11.  Make a Video
This would pull in more potential backers and show your creative side! Keep it to 3-4 minutes with your pitch and explain your story, but briefly.
12.  Prepare Media Outreach

Media outlets, journalists, and bloggers play a pivotal role in the crowdfunding ecosystem. It is important to understand that simply running a crowdfunding campaign is no longer newsworthy. In order to get coverage for a project, it is necessary to run a crowdfunding press release. Then get a media list of highly targeted journalists, and bloggers who have covered topics in your niche.

 

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