How to Successfully Crowdfund your Business
While men have benefited from a gender bias against women when seeking financing for business start-ups, the opposite may be true for female entrepreneurs seeking initial investment through crowdfunding efforts.
According to research, women are seen as more trustworthy and more likely to receive crowdfunding than men.
Since crowdfunding is often done at the very inception of a business idea, it’s more important to your consumers that you actually deliver on your promise instead of pushing back the completion of your goals, no matter how increasingly sophisticated they are.
The following crowdfunding platforms can lead you to victory and a successful campaign:
Find the right platform.
Crowdfunding sounds straightforward enough. All you have to do is set up a campaign, share it on your social media, and the dough will come rolling in… right?
It turns out that crowdfunding is a little more complicated than that, especially when you and other hopeful entrepreneurs are essentially receiving gifted money for a variety of different causes.
There are three different types of crowdfunding: equity-based, rewards-based, and donation-based crowdfunding. Depending on what crowdfunding model works best for your needs, you can easily create a successful campaign on any of the following platforms:
Kickstarter is one of the most popular crowdfunding platforms out there, with creatives completing record-setting campaigns. Example? A card game based off of a popular indie game has earned more than $1 million on its Kickstarter in just one week.
Why Kickstarter works really well for creatives is because of its rewards-based crowdfunding system. For every set amount that a backer donates, he or she may be eligible for a small token of appreciation, and the gifts increase in value the more you donate.
There are two kickers to Kickstarter though. The first is that backers, unfortunately, won’t be able to make charitable donations. The second is that if you’re unable to meet your goal, you won’t receive the money. This all-or-nothing approach means less risk for everyone since creators won’t be expected to finish their product and backers won’t be charged.
Indiegogo is another rewards-based crowdfunding platform popular with creatives and non-profit organizations. Non-profits especially like Indiegogo because the platform allows for charitable donations. In terms of receiving money, Indiegogo is more flexible than Kickstarter since the campaign owner does receive however much is donated.
Rockethub is a donation-based launchpad for many music, art, science, and business projects. It not only boasts a lower vendor rate than other competitors such as Kickstarter, but it also allows you to take the money home regardless if you meet your goal or not.
A particular standout about Rockethub is the customer experience and service, as it offers a step-by-step course to structure your campaign, an enthusiastic staff that helps you promote your campaign, and an analytics dashboard that helps you gauge your campaign’s performance.
If you’re looking to crowdfund for a non-profit organization, Crowdrise (by GoFundMe) serves as a highly effective, donation-based platform for your campaign. Not only are your contributors able to write off their donations on their taxes, but you will have instant access to your funds as well.
The interesting quirk about Crowdrise is that you can customize your fundraising in a variety of ways. Whether you’re aiming to raise funds through social media, event planning, charity runs/walks/bikes, or peer-to-peer, the Crowdrise platform offers features that allow you and your contributors to track your progress and easily spread the word about your good cause.
Exclusively meant for the birth of new ideas and products, Quirky is an inventor’s dream when it comes to crowdfunding. However, Quirky’s approach to crowdfunding is a little different from what you may be used to.
When you first submit a new idea to the Quirky community, in exchange for the guidance and skill of your fellow community members (a product designer, a manufacturer, etc.), you give them “influence” or a certain percentage of your royalties.
Once your idea has been refined, you will submit a proposal to the Quirky team who will then review it for market potential. Once your invention has been approved, the Quirky team will produce your work and you and your “influencers” will share in the royalties for every unit that has been sold.