Never a day goes by when someone contacts me AFTER launching a crowdfunding campaign asking why no one is backing their campaign.
More often or not they have missed all of the following critical success factors.
Project creators are worried because they suddenly realise that not enough preparation has gone into planning their campaign before launching.
For many the first realisation, believe it or not, is finding out that they actually need a crowd before they go crowdfunding.
It is very much like an author of a book. The publishing houses on the whole do not have access to crowds of hungry book buyers. They instead rely on the author to bring along their own crowd. In most cases the author needs to go out on the road to drum up their own book sales.
The secret to crowdfunding is in the word ‘crowdfunding‘. You NEED a crowd before you can go crowdfunding. I have long stopped wondering why project creators think strangers will invest in their product or service.
The reality is that strangers do not spend their days trawling through the internet looking for projects to back. There is only a small percentage of 'serial' backers that will go on to back more than one project.
As for those that do back more than one project the figures are in the low single digits and will not make a significant difference to what is ultimately raised.
So if strangers do not back campaigns who does? I have on one occasion worked with a project creator who spent over 18 months building his crowd before he went crowdfunding.
What a great example. His project was certainly not one of the 64% (Kickstarter) of campaigns that fail to reach their target.
Setting a realistic target is a greater challenge than one thinks.
More often than not project creators are over confident about how much money they can raise, how large their crowd is, how responsive their will be and how much they will be prepared to invest.
In most cases crowdfunding project fail to reach their target.
There is no exact science behind how to set a realistic target but there are ways you can at least workout what you can expect from your crowd.
At the very least you should be confident that you can raise a third of your target within 48 hours of launching your campaign.
The likelihood of reaching your target diminishes drastically if you do not do this.
What it means is that you need to have a very clear idea of where the first 33% of your funding is going to come from. You need to know how much and who will be giving. You cannot wait until after launching the campaign to figure this out.
There are hundreds of crowdfunding platforms serving the six main types of crowdfunding out there. There are over 2000 crowdfunding platforms worldwide with new ones starting up each week.
Which one is best for you?
Most project creators I get to work with at first do not know that there are different types of crowdfunding. At the very least they miss out on the fact that they may, over time, benefit from more than one type of crowdfunding. How about going for a rewards based campaign first followed by an equity round?
Once the type of crowdfunding platform has been established this narrows the field down dramatically in terms of the crowdfunding platforms a project creator can consider.
However, each crowdfunding platform has its own rules and regulations. This requires some due diligence and this research must be done even before considering a crowdfunding platform.
To top it all there is also the choice of you going out on your own. You can bypass a generic crowdfunding website and build your own.
The obvious benefit of going this route is saving on platform fees. However on the other hand this saving could easily be swallowed up in the expense of setting up your own website and payment mechanisms.
It is quite a mission to figure out the best crowdfunding platform but an ill chosen one can scupper the possible success of your campaign.
To help you with some of the issues listed above why not look into these crowdfunding resources before you go crowdfunding