In the current financial climate raising the necessary funds to expand your business or launch, a new product can be incredibly tricky. So, what do you do if you are a young, innovative, creative company with an amazing product or service, an engaged and excited customer base, and the desire to grow?
This is where crowd-funding is becoming an increasingly popular choice for many businesses. There are a number of websites around the globe that offer the chance to fund your business project using the power of the people. The idea behind crowdfunding is that you sell small amounts of equity to a large number of investors, making it both affordable for investors (with most campaigns being able to offer as low as $10) and at the same time, a great way to ensure that you do not give away a large amount of your company to just one person.
One of the biggest benefits of crowd-funding is the customer engagement. Anyone who has invested in your project can share this information with their social media networks by tweeting, emailing, blogging or sharing the link to your page through Facebook. This makes it easy for other people to find your campaign and invest if they like what they see!
But how can you make sure that your crowdfunding project is a successful one? With more and more companies turning to crowd-funding platforms, you need to ensure that your pitch stands out from the crowd if you stand a chance of being successful with your fundraising.
We’ve spoken to gamesGRABR who have successfully used crowdfunding (and is now using it again for their next round of investment) to raise business finance and have put together this guide so that you can find the best way to be successful at crowd-funding.
1. Plan your pitch
A good pitch needs a lot of planning, and this is not a stage that you can skip if you want to be successful. Think carefully about the amount of money you want to raise, what you are going to use it for and how you are going to reward people who invest in your pitch? You should also use insight-based content to validate the industry that your business is in. What are the analysts predicting in terms of the growth and value of your industry? And what proof points are there from your industry of other businesses that have secured significant investment on their way to becoming ‘the next big thing’? Answering these questions will help convince people to invest.
Crowdfunding isn’t a failsafe way of raising funds, and it won’t be suitable for everyone. It is a very transparent way of dealing with investors, you have to be 100% sure that it is the right option for you as everyone will see whether or not you raise the funds that you are asking for. Take some extra time in the planning stages and really make sure you are ready to invest the time needed into making your pitch successful.
2. Believe in your product
This may sound simple but if you are passionate about your product or service, this will shine through in your pitch and tempt people to find out more about you and your business. Include as much information as you can and be specific about what you are looking to achieve. If you are trying to persuade people to invest in your business, there is really no such thing as too much information, as long as it is presented in the right way. Pages of text and financial projections will turn people away as much as a brief and uninspiring paragraph just asking for money. Check out some of the most successful pitches on the site that you are using for your crowd-funding and be inspired by how they presented themselves.
3. Use images and video as well as words
A pitch needs to be visually inspiring if you are going to grab people’s attention. gamesGRABR understood the importance of this with their first round of crowdfunding. Every time they reached certain milestones they would create a custom designed image, which was eye catching and created a talking point for potential investors. Social media is such a visual feast that it makes sense to leverage networks like Pinterest and Instagram to post engaging images of your crowd-funding and how it’s progressing to generate traffic from there to your campaign.
The use of video adds a further level of human interest and means that people are more likely to spend time looking at your pitch. And similar to the visual networks, use the power of YouTube and Vimeo to drive traffic from there to your crowdfunding.
4. Market your pitch
Simply creating a pitch on a crowd-funding site and sitting back and waiting for the investments to roll in is a sure-fire way to fail to hit your financial targets. Social media plays an instrumental role in the success of your crowdfunding campaign. If done effectively, it can be the driving force for not only traffic, but also engagement which are key and the essence of crowd-funding. You need to be marketing your pitch as much as possible. Below are a few more ideas:
- Post on Twitter and Facebook – or whichever social networks are most appropriate for your target audience – about your pitch. Personally thank on Twitter anyone who invests if you can find their profile handle. This is a good way to show that your pitch is popular and helps drive more traffic as others will see it.
- Email all of your contacts through email, LinkedIn, networking groups, and your newsletter/subscriber list.
- Ask people to tell their contacts! Create a button that people can host on their blog or an image and email that they can forward as this will help spread your campaign.
- Reach out to your networks and people that you engage with regularly and tell them about your campaign asking them to share it across their own social networks.
- Design a new page for your website to tell people about your pitch and update them. You can then direct all of your traffic here and, through your website analytics, you will be able to see which of your marketing efforts have generated the most interest.
- Talk to the press. Start with your local newspapers but also tell the national press and industry publications and blogs about what you are doing as well. A well-written and compelling press release will go a long way in getting your story heard.
In order to be incredibly successful, you need to leverage the help of other people in promoting your pitch. Consider who you have in your circles or the network you could work with to really help get your message out there. Think about who you could partner with – people who are influential in your industry to help drive traffic and awareness. For example, gamesGRABR have partnered with influential vloggers on YouTube, (with over a million YouTube subscribers between them). This not only adds to the credibility of their campaign but also amplifies their reach and traffic from YouTube.
Joint ventures and leveraging your contacts is the basis of social media marketing. It’s all about who you know and who they know when it comes to getting your message out there and driving as much traffic as possible to your pitch page, so don’t be afraid to approach others and ask for help.
Make sure that you answer questions as soon as they are asked (many crowdfunding platforms have forums where potential investors can ask questions) and keep in touch with all of your investors. Include investors in your marketing and make sure they know what is happening at every stage of your pitch. It is a well-known fact that it is easier to raise additional funds from existing investors as they have already bought into your company ethos. So keep the lines of communication open.
7. Don’t stop as soon as you hit your goal!
If you are fortunate enough to meet your crowd-funding goal then why stop there? Use this as an opportunity to raise even more funds and tell everyone how successful you’ve been. Everyone loves a success story, and you may find that more people are likely to invest once they know that your pitch has been successful.
Have you ever used crowd-funding? What’s been your experience with it? Let us know by leaving a comment!