Make Crowdfunding work for your project by building a buzz about your product or service. Give your product more exposure by raising capital through the joint effort of well-wishers – friends, family, customers, or investors. The crowdfunding approach is essentially building communities online to reach a potential investor pool through crowdfunding platforms, social media, or email lists. Kickstarter and IndieGoGo are rewards-based crowdfunding platforms. Familiarise with other types such as donation-based, and equity crowdfunding. Know the components involved in creating a successful crowdfunding campaign that attracts new financial backers. Fulfill the financial objectives for your project and win supporters for raising funds. Video pitch plays an important role in your crowdfunding promotions for sharing ideas with a bigger audience. Get to know what works and what does not while sourcing monies from the crowd to fund your project. Your supporters are eager to learn about the funding of your project.
In India, crowdfunding by a startup is not permitted. But Indian investors can opt to invest in startups of foreign platforms. Except for equity-based the others- donation, reward-based, and P2P are RBI regulated and legal in India. Neither rewards, equity, or donation-based crowdfunding requires you to return the money you get which is yours to keep. But, it depends on the platform you select to work with. In Kickstarter, it could be ‘All’ or ‘Nothing of the funds’ to keep if you do not achieve the threshold goal for the target funds. P2P works like traditional financing where monies have to be fully paid back along with interest and platform fees. Some popular crowdfunding marketing platforms in India are Kickstarter, Indiegogo, Catapooolt, Milaap, Faircent, Ketto, Wishberry, FuelADream, etc
Crowdfunding is a process to source funds for your project in small amounts from a lot of people. The marketing platforms for crowdfunding allow you to create a page on their site and pitch your project to potential backers. Use digital marketing to promote your page. Back your efforts with social media, online advertising, PR, etc to drive web traffic to your page and achieve the funding goal.
Types of Crowdfunding
The four types of crowdfunding are -Reward-Based, Equity-Based, Donation-Based & P2P.
In reward-based crowdfunding, people pledge money and in return expect a package of benefits. Eg –Fundable, and RocketHub. A range of rewards is based on differing sums of money pledged in a tiered structure. Thus the crowd funders can engage with people having different interest levels in the project and maximize collections.
With equity-based crowdfunding, the investors share in the rewards and risks associated with the project by owning a part of the enterprise. Partner with businesses by using platforms such as AngelList, and CircleUp.
Here people pledge money without any consideration of any incentive such as for charity. In donation-based crowdfunding, the individuals need to first build their campaign and spread the buzz on social media so that they can get supportive donors. Some people feel strongly towards supporting a genuine cause and link with other peoples. Platform examples in India are Ketto and Milaap.
P2P – Peer to Peer
P2P allows people to raise un-secured loans from external sources that do not include conventional bank loans. Examples are Funding Circle and Faircent.
How Crowdfunding Works?
Crowdfunding is a blend of raising capital utilizing marketing with strategies & research. Multiply ‘Reach’ for your development project, and build an audience. Several crowdfunding platforms are available with specialization in a type of crowdfunding. Choose the right type of platform which is ideal for your project. Crowdfunding campaigns share three common elements- the project, the people, and the goal. There are three stages in running a successful crowdfunding campaign – pre-campaign, launch your campaign, and post-campaign. The project can be a product or a service. People are the audience that backs up the project. The primary purpose of a goal is to raise capital for the project. The secondary purpose would be the opportunity to connect with the backers who can be the first customers for your project.
Tell a Story prior to pre-launch
Initially spread the word for your campaign before launching it. Start your crowdfunding process by telling a story that will depend on other supportive elements. The platform you use will dictate the components for your campaign promotion. It could be using professional videos that are specific with details.
Take say a 3 or 4-tier approach for rewarding people who back your project depending on the sums assured, Communicate with the people who back your projects and keep them informed about updates and the progress made at different stages. Do the research and find similar successful projects like yours on the platform you use and study what works and what does not. Follow-through even after your campaign ends.
Crowdfunding Marketing Platforms
Some popular crowdfunding platforms are Kickstarter, Indiegogo, or Patreon.
This platform recommends projects to last < 30 days. This creates a sense of urgency and helps to raise more funds. Moreover, you will not receive money for a forward period of 2 weeks as the pledges will not get debited until the end. With Kickstarter, it is all or nothing. So keep in mind the funding amount you set. It is better to be in a position where you can raise more funds than the stated goal amount. Kickstarter collects its 5% fee along with the payment processor fee (Amazon) of about 3-5 %.
Submit your project to Kickstarter. It takes 2 – 3 business days for Kickstarter to review and approve your project. After approval, you can launch your project at any time. The goal for your project remains the same throughout but you can edit for improvements. Rewards promised cannot be changed but you can add to it. Promotional videos may be upgraded. Now that you are running the campaign you can email updates to your backers who have shown interest in your project. Your audience will be those people who follow you on your social media channels – Facebook, YouTube, etc. You may need press attention to tell your story overboard. Expect referral traffic to your project from Kickstarters’ home page and discover page which can be viewed from your dashboard.
Back a Project
Click ‘discover’ at the top left to browse through Kickstarters’ 15 project categories. Click the filter tab to refine your search further or hit the search button at the top right to find more categories. Scroll further to the bottom and click load more to view more projects.
To back a project, click on any project (you have identified) to find more details about the project. If you have decided to support the project click the ‘back this project’ tab. Supporters can expect tiered rewards from creators when they pledge a certain sum of money. When the project is finally successful click the reward option for the chosen project and enter the pledge amount with shipping details + any additional costs. If you agree to all continue and enter your credit card info. and click the pledge tab.
Kickstarter will charge your CC if the project meets the funding goal within the set deadline. Follow up for updates by visiting the project page to check the progress made.
IndieGoGo is different from Kickstarter. It is less restrictive with fixed & flexible campaigns and an automatic approval process. They charge 4% a lower fee than Kickstarters 5%. The funding goal target for fixed funding has to be met or contributions are returned. But in the case of flexible funding, the contributions can be kept for unsuccessful campaigns with a 9% fee charge.
In IndieGoGo campaigns are best when set at a 60 – 70 days period. A good video pitch has essentially got to be personal, and tell a story. Don’t forget to pitch your business to all your friends and family members as you can expect them to fund about 40% of your project. Explain why you need the funds and how you would use the monies. Putting a face to your project will allow people to contact you. Choose your perks wisely as you will be required to give something back to backers that are intimately connected to your project.
After setting up your campaign page IndieGoGo makes it possible to share it on Twitter and Facebook. Analytics lets you measure IndieGoGo metrics to view your traffic flow from sources and how your campaign progresses. Keep your audience engaged and build that support from the outer circle of the people to fund the balance of 60% of the project. Thank your supporters and request them to share your project with others. Keep your backers informed about updates or any changes
Patreon Crowdfunding Marketing Platform
Patreon allows creators to taste freedom by approaching their fans directly. This allows creators to make their work possible and interact with their fans. Your most engaged fans are the people who care and that fuels the fire in you to keep creating week after week, month after month. For a monthly subscription creators offer exclusive content in exchange for supporting the Patreon users’ goal. By being a part of the creative process patrons give feedback and ideas to creators that sustain your channel. Sign up for Patreon as it is free to start and have access to the dashboard. You can be on Patreon for a number of reasons. May be starting a blog for your YouTube channel or some other creatives.
Create a Page on Patreon
You will be required to sell on the page after yo have set it up. Make the best of your page by selecting an appropriate cover photo (customized to Patreon dimensions for width x height) that represents your brand. Claim your Patreon URL of the page for SEO using keywords relevant to your brand. Your patrons may want more insights about you. An About page will give them this info about who you are and your credibility. Patrons are also interested to know what they will get for joining and supporting your project. For promotion, an intro video is a good option and your URL will help interactions with patrons and further forge this relationship.
Tier Benefits for Patrons
Creators create a page on the Patreon website with membership level tiers. Patrons consume content that is categorized under > games, podcast, videos, comics, comedy, and education. Creators can configure their page so that patrons can unlock monetary tiers and have access to the exclusive creatives for every new release. Patrons get access as long as they contribute and it is easy to opt-out.
After you start earning on Patreon, opt for a Lite, Pro, or Premium plan. The Lite plan will charge you a fee of 5% of your monthly income + payment processing whilst for Pro, it is 8%+ and Premium 12%+
Crowdfunding Community Backing for your Campaign Promotion
Take your campaign to greater heights by promoting your crowdfunding campaign to a community of backers. Some popular communities can be found in-
- BackerClub > a community of backers who repeatedly support the projects of creators by buying products and expecting rewards.
- BackersHub > email submissions to their 20,000 subscribed backers and posting your project on their site.
- Gadget Flow > Promote your campaign to a wider audience. The site attracts about 14m+ monthly visitors and has a social media follower base of 1m+. Features Kickstarter and IndieGoGo projects.
- Crowdfund Buzz > Use their PR agency for the promotion of your campaign through Social Media and Advertising services
- Kickstarter Forum > Share your projects and connect with other creators in the Kickstarter forum community or crowdfundingforum.com communities
- Green Inbox > Using Facebook ads to scale your projects by maximizing the metric ROAS- return on ad spend.
- Kickback Machine > Creators can find projects similar to theirs and learn from the experience of other projects
- BackerLand > Submit your Kickstarter and IndieGoGo projects (developed & pre-launch). Approved projects get listed on their homepage. Newsletter blasts that feature your project are mailed to their select super-backer community,
- Kickbooster > Kickstarter & IndieGoGo pre-launch campaigns for list creation and building hype around your product launch. Using referral marketing to encourage users and convert subsequent leads into pledges. Manage pledges and carry on with more funding. Bring affiliates from Kickboosters’ marketplace to market your products.
Crowdfunding Support Tools
- Hyperstarter > Check your Kickstarter campaign page checker for free with this analysis tool and optimize.
- Krowdster > find backers and get help with twitter influencer marketing for Kickstarter and IndieGoGo campaigns
- The Crowdfunding Center > campaign promotion and data-driven tool for creators, and backers
- BackerKit > crowdfunding software for backers and creators to connect and support each other to make every campaign work for the best.
- Trello > Use Trello to organize your crowdfunding campaign into cards and boards.
- Crowdfunding Insider > news and information website
- Kickstarter Magazine > stories about crowdfunding projects
- BackerNews > News about crowdfunding projects
- The Committee to Protect Journalists > (CPJ) Crowdfunding News for Journalism