Have you heard of crowd funding and considered trying it to raise money for a project? Or have you heard the term and wondered what it meant? What is the advantage for the person who pledges money apart from feeling philanthropic?
I was at a social media mini conference in Wales as part of ACT Wales Ireland last week and attended a very interesting talk on crowd funding by James Moxey of Ciric (their facebook profile) as he recounted the success of a recent crowd funding project along with some suggestions for what to do and what not to do!
Full details of the crowd funding project are here. In summary, Steve Sullivan wished to raise £20,000 to create a film about Chris Sievey / Frank Sidebottom. He used kickstarter and within a month, he had not only raised £20,000 but £48,000!
How To Run a Successful CrowdFunding Campaign
The following are points to consider if you are wishing to create a crowdfunding campaign (based on the experiences of the project outlined above by James Moxey)
- Most of the crowdfunding platforms offer an ‘all or nothing’ service. This means that once you reach your target, you will receive the pledges approximately three weeks after the completion date (minus about 8% for charges). If you don’t meet your target, you don’t receive any of the funds. Hence, it is crucial that you are realistic with your target.
- The most popular UK and US crowdfunding platform seems to be Kickstarter but there are others too. The most popular Irish one seems to be FundIt.
- Crowdfunding platforms give people the opportunity to pre-order and give you, the creator, a good indication regarding potential interest as well as pre-sales.
- It is recommended that you create a video and ensure that you are featured within it – give people the chance to engage with you, see your passion and believe in you and your project. You need to tell your story.
- Give people value in return for their pledges. Look at what similar projects have offered and see what the take-up was. Apparently the most common pledges are around the €50 mark. You can limit the number of rewards for pledges too e.g. if you want to create a special limited edition of your product for €250, you could limit that to 25 backers and rewards. Don’t just give people the reward of a book for a pledge of €50 if you are going to be selling the book later for €20.
- Remember that you will need to drive people to your campaign so it is imperative you have a good social media presence. You may need to give yourself 3 months to build up to the launch of the campaign in order to build your communities (offline and online)
- With many of the platforms you can select the length of time within which you want to source funds. The most popular duration seems to be a month.
- Send press releases. 4 were sent in the duration of the project above.
- Offline press may not feature the project until it is completed and successful. Therefore, while this will not generate funds for your campaign, it is still worthwhile as it raises profile for your project now that it is funded and going ahead.
- Have a plan in place to update your backers. Send them an occasional update to let them know how the funding is going, give your backers a little ‘sneak peek’ with an extract of your book or a scene from your film. However, don’t push too much, don’t cause your supporters to become annoyed with you.
- Target any celebrities or key influencers who have relevant followings on social media and who may be interested in your project.
- It can be a good idea to have a team of volunteer helpers as this will be a very time consuming project.
Why People Pledge
- People are philanthropic and like to see projects come to life that might not if it wasn’t for crowdfunding. People like to help others.
- People like to be the first to receive something, particularly if it is something they are particularly interested in. They see it as pre-ordering.
- 70% of the backers in the project outlined above had funded more than 5 other projects on Kickstarter so there is certainly a tendancy for backers to fund more than one project.
- Businesses appreciate being associated with a good project so offering having a personal or business name inscribed on something, on an acknowledgements section or otherwise seems to go down well, this can generate backing too.