How to prepare for crowdfunding success
We look at how to plan, implement and hopefully complete a crowdfunding campaign that attracts the crowd’s attention for all the right reasons…
You have to be willing to get very public about your business or project in the crowd world; this includes telling complete strangers all about what you are planning.
You also need to accept that you may face questions on pretty much anything, from what you are planning to do to quite personal questions about yourself and other members of your team. This is particularly true if you are looking to borrow or raise equity.
Therefore, it is vital that you and your business are well prepared for this scrutiny. These are the essential things to get right before and after your campaign starts.
Preparing for your fundraising will be one of the most exciting and challenging things you probably ever do. The trick to success is to prepare to the nth degree and also to put in place strategies so that you can move and adapt as you go along, as there will inevitably be surprises along the way.
Hopefully, now that you are at this phase, you will have a really strong business plan ready, and you will also have decided which type of fundraising you want to do and which platform you want to choose. Once you have done all this, these are the steps to follow.
Gathering the information you will need to support your campaign
Typically, the sorts of information you will need are:
- an executive summary
- a business plan
- the founders’ CVs
- details of any IP, such as patent and trademark documentation
- financial forecasts
- samples of main customer and supplier contracts
- a video
- a website.
The video is key!
Of all these, probably the single most important thing to get right is the video, as this will be what your funders will look at first. Although some people do have successful campaigns with fairly (or totally) amateur videos, if you want to raise serious money you need to take the video very seriously. If you are not an expert in creating videos, I think you should definitely employ an expert to help you get this right, even if that costs you some money upfront. If your business is about something consumer-focused, and especially if you are raising money for something in the media or the visual arts, your whole project will be judged on the quality of your video.
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If you base the content on your executive summary, you will not go wrong in terms of what it has to contain, but don’t be tempted to make the video too “busy” or “wordy”. The trick is to be succinct and make sure that the video reflects you, your business and the values you have. There is no point in making a jokey video, for example, if in fact you are a naturally serious person, as funders will find it inconsistent and then be suspicious of you.
Having said that, most investors do not actually base their investment decision on the video, so don’t allow it to overtake everything else in terms of importance. Just make sure it is a really interesting summary of what you intend to do, who is going to be involved in the project and why you have the dream you have.
Your website and you personally on the web
It is easy to forget in the rush of a crowdfunding campaign that funders will dig around to find out more about you on the web. So make sure that your website is updated and that it looks and feels consistent with your campaign. You should also make sure any Facebook pages or LinkedIn groups you manage are up to date (and kept up to date during the campaign) and you should update your and your colleagues’ personal profiles on Twitter, Facebook and LinkedIn.
Getting the crowd ready for the campaign launch
By this stage you should have gathered a considerable list of your own potential funders. During the weeks running up to the campaign launch, make sure that you are talking regularly to these people, but don’t reveal too early on that you will be launching a campaign. Instead, talk to them about how your plans for your business or project are getting on, and tell them about any exciting developments that happen. Aim to tell them stuff that they will want to pass on to others, so don’t make it all self-promotion – this will quickly be spotted and then discounted.
Try to talk to them at least once a week, if not a bit more often. Don’t fall into the trap of talking to them every day for a week, then ignoring them for 10 days, only to blast them again for a few days.
Finally clear your diary, ensure the campaign looks perfect, and that the answers to anything and everything any funder could ever ask you will be accessible at the touch of a button.
During the campaign
Key things to keep on top of during your campaign are:
- Keep an eye on your campaign at least three times a day, especially on any blogs or boards relating to your campaign. Respond to queries as soon as possible (even if that is the middle of the night!) and definitely before you go to bed.
- Try to stick to your marketing timetable, however difficult that gets.
- Keep everything up to date – adding new comments and photos as events proceed.
- Keep encouraging your crowd to spread the word.
- If events take place that mean you have to rethink your campaign, e.g. the rewards you are offering or your marketing campaign, get on with it as soon as possible. Hopefully you will have ideas in your Plan B documents.
- Get on the phone to your key champions and ask for their support – make it easy for them by having tweets ready for them that they can just copy and paste.
- Don’t go mad with the PR – phase it to fit with your campaign. So have a big blast in the first two days of the campaign, then give it a rest. Make sure you are then tweeting and posting every two to three days to keep up the momentum both on the campaign platform and via Twitter and other sites, so you can keep current funders interested and bring more on board all the time. Make sure your tweets are at least two of the following: positive about what you are doing, showing the progress you are making, relevant to the campaign, interesting to the audience (not just to you!) and amusing to the audience (not just to you!).
The last week
Anticipate that the last week will be as intense as the first. If your campaign has clearly failed, this is the time to prepare the “thank you, anyway; I have taken on board what you have told me and see you again soon” speech or blog.
If you have not quite got there, this is the time to really go for it – get your publicity machine working like mad. Approach everyone who is relevant and let them know there are only a few days to go. Review your rewards and more.
And if you are in the lucky position that all is going well and you know you will hit or exceed your target, prepare your “thank you so much” speech or blog and start getting on with delivering what you have promised.
Completion (assuming you have been successful)
Depending on the platform you are using, completion will involve different things. With pledges you can expect the money to be transferred, minus the fees, within a couple of weeks. With debt and equity platforms there will also be paperwork to sign and there may be things to register in official places such as Companies House in the UK.
And, let’s face it, this is really just the beginning of the project itself, so it might be wise to take the weekend off to recharge your batteries so you are all set to go on Monday morning.
For more on crowdfunding, check out our feature on The UK’s million pound crowdfunding success stories.
This extract was taken from Crowd Funding: How to Raise Money and Make Money in the Crowd by Modwenna Rees-Mogg.