Everything you need to prepare for a successful crowdfunding campaign
Crowdfunding campaigns may seem easy at first glance but in reality, it takes hard work to raise the money you need for your business. This applies to campaigns on Kickstarter or Indiegogo and it applies on Crowdcube or Funding Circle.
But I want to help you turn this journey into your success story. In this article you’ll discover the key points you need to focus on to smash your funding target with your equity crowdfunding campaign.
If you need a refresher on the types of crowdfunding, you can check out our Beginner’s Guide to Crowdfunding.
Now let’s dive into it…
1. Your elevator pitch – describe your pitch in 20 words or less, using language that everyone can understand.
Entrepreneurship 101: always have an elevator pitch ready to use. You’ll have to use it in your description, in your video and especially at networking opportunities.
So, what’s the perfect elevator pitch recipe?
Narrow your idea to one sentence, define the problem, then describe the solution…
… and preferably do it in 30 seconds!
Also, use a language that everyone can understand. You are not talking to one person in your campaign, you are trying to reach hundreds of people with different levels of business experience, education and lifestyle. Be inclusive in your messaging, in your tone and with the words you use.
2. An image is worth a thousand words. Include videos, presentation and images to support your project.
Approximately 65% of people are visual learners so show your potential investors what your business is all about by including videos and images in your project.
One of the main factors that investors base their decision on is trust. It’s hard to trust someone if you don’t even know what they look like. So, don’t be afraid to appear in your video. In addition, it’s the best way to showcase how passionate you are about your company.
It’s also an amazing way to showcase your product. Depending on how complex it is, it’s a simple and effective way to show your potential investors how your product works and how it can be used.
3. What is your inspiration and what makes you the person to trust? Remember it is about people not products.
Crowdfunding is about the people, not the product. Your passion and your expertise will be the deciding factor when someone is thinking about giving you their hard-earned cash.
Tell your story, talk about what made you start this business and how you are personally invested in it. Don’t hide your passion, let it shine through your words and your tone.
Remember when Tom Cruise jumped on Oprah’s couch shouting how much he loved Katie Holmes? Cringe worthy? Yes. But you could see the passion in his eyes. That’s the passion your investors want to see to make sure you will do everything you can to grow your business and deliver on your profits.
Don’t go jumping on people’s couches though...
4. Why are you raising your funds and what will they be used for? You need to provide details that are grounded in facts and figures.
You need to provide financial forecasts that are grounded in reality and show that you have a clear vision on how to develop your company. Just as crowdfunding itself should be part of a well thought out business decision, you need to know what exactly you’ll be spending the money on. And of course, share this with your potential investors.
A professional in any field is well prepared.
That includes the past of the company – why and how you got started;
the present – what you are currently doing to manage it;
and the future – what are your plans to grow, how will you accomplish this and scalability options.
5. Who are your competitors and why are you different? It is ok to talk about the elephant in the room.
Researching your competitors is a vital component of your marketing plan and you should not avoid the subject. Due diligence is a sign of being prepared.
How can you discern yourself from your competitors if you don’t know what their strengths and weaknesses are?
So do your research. And don’t be afraid to talk about the elephant in the room.
6. What is your exit route? Tell the crowd, customers or donors what they should expect?
How you see your place in your company in the long run is just as important as your short-term passion for it. Do you want to build it up and then sell it for a profit? Do you want to run it until your old age?
Long-term plans show investors that you’re serious about your business and are a trustworthy person.
To sum it all up, think of your preparations to launch an equity crowdfunding project as creating a business plan. Do your research, do your planning and then showcase it in the best way you can to the world.