Knowledge Centre Is it for you?

With the meteoric rise of crowdfunding websites around the world, you might presume people are waiting in line, chomping-at-the-bit to fund projects. But as is true with most situations in life, you shouldn’t take things at face value. Crowdfunding works best if you are prepared for some hard work, you have an engaged audience and you have a well prepared idea that you can communicate effectively.

There are many examples of artists and creatives that have found it relatively easy to attract money for their crowdfunding campaign, but this isn’t always the norm, nor should you expect this for your project. Crowdfunding takes time and effort, no matter what anyone tells you.

To help you decide whether crowdfunding is for you, here are some considerations.

Be ready to work hard

Crowdfunding, like most forms of fundraising, is a full time job while you are doing it. Try to time your crowdfunding campaign appropriately. There is no point going through a campaign immediately before your event, performance, exhibition etc. This may be your busiest period, and having time to dedicate to an intense online campaign too isn’t likely. Many crowdfunding sites have rules about the minimum amount of time before you finish you campaign and your project happening.

Read the small print

Yes it is boring, but like any contract you enter, you should always fully read the terms and conditions of a crowdfunding website. Make sure you are familiar with crowdfunding terms and features such as:

All or nothing funding – where a project must be fully funded before its fundraising period expires or no money changes hands
Fees and charges – fees and charges will usually be applied by both the crowdfunding website and the payment service provider
Payment terms – some crowdfunding websites will pay your funds out in installments

Have people on your side before you go live

Long before you’re ready to go live with your crowdfunding campaign, you should have thought about the people that will help make it a success. Begin conversations about your campaign with these people before you ask them to make a pledge to it. When it comes time to formally ask people to pledge to your campaign, the approach will be much smoother and simpler since a previous conversation exists.

Presentation is critical

Whether in your video or written presentation, it’s vital you have answered simple questions like who you are, how much you’re seeking to raise, why you’re raising it, how you plan to spend the money etc. During your crowdfunding campaign, you should be well prepared to publicly answer questions about your budgeting and your project in general.

Consider the appropriate length for your campaign

You should think of your crowdfunding campaign in two ways. Firstly, you should remember that it will take time to get word out about your campaign. Secondly, like a house or car that sits on the market, the longer the house sits, the more questions and concerns that might be raised. Also, you need to be able to sustain your own energy and enthusiasm during the campaign. On Fund it, we typically recommend a project last between 6 and 8 weeks, but this will depend on the project, the amount to be raised, and the project creator.

Get your contact database in order

As our world becomes increasingly connected, there is naturally more communication among people than ever before. This is a good thing if you are thinking about crowdfunding. However, lots of people have never examined their contact database to see exactly who is on it and make sure that their information is up-to-date. Even with the most up-to-date database, it is worth remembering that the average read rates for direct email campaigns are between 20-30%. That means only 20-30% of your distribution list will likely read it.

Have really great rewards

Nearly all crowdfunding websites emphasise the importance of great ‘creative’ rewards which are either related to the project being offered, or the creator. It is also important that rewards are fairly priced. Projects with rewards that are overpriced or uninspired will struggle to find support.

Provide a flow of information on & off line while your campaign is ‘live’

Once your crowdfunding campaign is live, you need to assume that not everyone knows about it. No matter how effective your launch emails are or how clever your social media activity is, a conversation in the local pub or shop about your campaign could well be the most effective way to draw attention to it. People talk and share information both on and off line and the more effective you are at sharing information, the greater the opportunity you have for being successful.

Deliver your promise

In most crowdfunding sites, it is the full responsibility of the project creator to deliver the rewards they have offered. In most cases, the people that fund a project are most likely to be your close friends, family, fans, or professional contacts, so delivery of rewards is vital to your reputation. If you want to use crowdfunding as an on-going fundraising method, delivery (or over-delivery) of your rewards is vital to continued success.

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