It’s no wonder that crowdfunding is made up of two words that mean ‘funding by the crowd.’ When project founders post information about their projects online, anyone can sponsor the development of the project. On Kickstarter, one of the first crowdfunding platforms that continues to be popular, founders have managed to raise an impressive total of $5 608 896 634 for their projects.
You can launch commercial, creative, and social projects on crowdfunding platforms. With each year, competition for attention and donations becomes more intense, which means that many projects are unable to even raise 10% of their target amount. But founders have reason to compete: according to Fundera, the total amount raised by crowdfunding projects each year reached $17.2 billion in 2020. Crowdfunding campaigns may exceed all expectations: some founders are able to attract ten times more funding than they initially expected.
The success of a crowdfunding campaign is largely determined by the level of preparation. It’s not enough to launch a project and wait for people to respond – you have to set up your project in the correct way. To find out how to raise funding for your project in this competitive market, keep reading our article.
Choosing the right platform for your project
The most popular platforms in Russia are Boomstarter and Planeta. Kickstarter is the most popular international platform. These platforms have been around for several years, but new platforms are also emerging, so it might be a good idea to consider them as well.
Crowdfunding platforms developed at a particularly rapid speed during the first years of existence. For instance, Kickstarter was launched in 2009. In 2009, about a hundred new projects were listed on the platform each month, a number that increased to 400 projects in 2014. Today, more than half a million projects have already been launched on the platform.
When choosing a platform, you should consider which types of projects are the specialty of this particular platform, and whether or not your audience trusts this platform. Popular platforms that have been around for a long time tend to have the highest level of competition, so you will need to be especially serious when it comes to preparation.
Setting your financial goal
The first aspect that backers, or sponsors, pay attention to is your financial goal. On average, projects with a clear financial goal are three times more likely to successfully complete their campaigns than projects that do not have such a goal.
Beckers will willingly donate to an interesting project if the founders have explained their financial goal. For example, the creators of the Exploding Kittens board game defined a reasonable financial goal of $10,000. But during the crowdfunding campaign, they managed to raise more than eight million dollars! The project was so successful that the board game became available in the market and is still sold in stores today.
Don’t be afraid to set a financial goal of thousands of dollars. The success of the project is determined not so much by the requested amount as by its justification: the project budget should be transparent and understandable for backers.
Creating amazing rewards
Founders usually offer rewards to backers who donate a lot of money. These rewards can range from a thank you letter to the product at the center of the campaign, a souvenir with the project logo, and so on.
A project with a well-crafted reward system has a better chance of successfully reaching its target funding. According to Kickstarter statistics, successful projects tend to offer well-defined reward systems, with 9-10 rewards depending on the donated amount. You can also provide different types of rewards for the same donation amount.
You should make sure your rewards are creative and enticing for backers. For example, backers of the Mayak Space Satellite project who donated $ 4,000 were given the opportunity to visit the private territory of the Baikonur Cosmodrome.
Setting up the right layout for your project
Founders should indicate the budget of the project in transparent detail, describing the specific stages and terms of implementation, but it’s important not to get carried away. A crowdfunding project is not a business plan: you need to present your information in a visual format, but make sure not to bore your potential backers.
The description of the crowdfunding project should be full of facts while still keeping it interesting for the backer. A good option is to tell an emotional and exciting story about the project, presenting numbers and facts in an accessible form, for example, with infographics such as diagrams and graphs. Illustrative materials are very important for your project. The descriptions of successful Kickstarter crowdfunding campaigns usually contain 3-4 images and 1-2 videos. Pictures and videos used to illustrate your project must be of good quality.
Setting the right fundraising period
You might think that longer fundraising periods will result in higher funding, but this is a mistake.
Over time, backers lose interest in the project. After 30 days of fundraising, the chances of attracting a new audience are minimal. However, with a fundraising period of more than 30 days, founders are unable to create a sense of urgency, so the backers might think that they still have plenty of time to donate at a later date. As a result, they may simply forget about the donation.
30 days is the ideal fundraising period. During this time, you can attract the optimal number of founders. They will have time to get acquainted with the project, but will not postpone the moment when they transfer funds.
Promoting your project
The success of a campaign directly depends on the activity of its founders: how often they publish project updates and whether they talk about it on social media. It is advisable to post an update about the project at least 2-3 times a week. If people leave comments on your updates, you should not ignore them: it’s important to use the opportunity to start a conversation with current or potential backers.
It’s worth sharing the news about the project on your pages in social networks or on the project page. On average, creators of successful projects post at least 13 news posts about their progress, sharing their successes and talking about their difficulties. You should have designated project pages on the platforms that your audience uses: Facebook, Instagram, TikTok, and so on.
To successfully complete your campaign, you need to pay attention to the preparation of the campaign, create an interesting and informative description, and come up with tempting rewards for your backers. However, this is not enough – after launching the campaign, you need to regularly post project updates on the campaign page and in social networks. Communication with backers is crucial to successfully completing your crowdfunding campaign.