Crowdfunding · Startups

Crowdfunding Campaign Management Agency vs Consultant?

Kevin Gao

July 12th, 2016

Crowdfunding Campaign Management Agency (1) vs Consultant (2) vs Internal Hire (3): 
Agency usually get paid in upfront cash + reward. 
Independent Consultant usually get paid upfront cash (+equity) + reward. 
Internal hire is usually salary + equity but no reward
 
Which way works better for a startup, which way is better for consultant? Cast your opinion please?
- Agency (1)
- Consultant (2)
- Internal Hire (3)

Jon Samsel Founder at H3O - we turn businesses into brands, and Advisor at Heardable

July 12th, 2016

Crowdfunding success is about: 
  • Having a product that people actually want
  • That said, people don’t really buy your product, they buy why you do it. Your story and your passion make you stand out in a crowd and help you connect with like-minded people
  • Telling compelling stories and connecting at an emotional level - use of vivid and inclusive language is key
  • Creating early hype & momentum - think how Hollywood releases movies -- the first weekend's box office numbers are critical. So of course advertising and press are critical - it's about creating maximum awareness in a short amount of time. Most contests run for 30 days. You will know within the 1st week if you are likely to achieve your funding goal or not. Most crowdfunded campaigns don't. Advertising and press are critical because they help create maximum awareness in a short amount of time.
  • Facebook is a great social network to advertise on because once people click on and like your crowdfunding campaign, they are likely to share it on Facebook -- doubling or tripling your paid campaign impact without costing you extra money
  • That said, FB may not be the best place to pitch your product -- Twitter or LinkedIn could be better for you. It's all about understanding your audience of likely buyers. Wh are they? Where are they already congregating online? How best can I reach them?
  • Start early - most successful crowdfunding campaigns take at last 6 months to plan
  • Choose the right crowdfunding platform - Kickstarter is about tech, has the highest traffic numbers and is more exclusive (they vet all entries prior to posting) whereas Indiegogo has more artistic endeavors
  • Most successful crowdfunding campaigns are small in goal range. About 45% of campaigns under $100k achieve their funding goals. About 8% of campaigns over $100k achieve their funding goals. 
  • Having a kickass funding page, complete with video and easy to understand donation packages -- from small $ to large $. Rewards matter. Especially higher level rewards that include the product. Low-level rewards result in very little money. Higher rewards require fewer sales to reach your goal. Include time-limited rewards. Average number of different reward levels per campaign is 9.
  • One of the most effective ways for an inventor to raise crowdsourcing money is for the inventor to have a deep personal rolodex, someone who already speaks at events or has a social following, and has a natural charismatic personality or is good on camera. To demonstrate this point, the majority of successful crowdfunding inventors have an average of 975 Facebook friends. If your inventor doesn't have this type of network, it will be an uphill battle to attain your funding goal. In general, the majority of crowdsourced money raised comes from people who know the inventor directly or are one degree away. They are genuinely interested in what the inventor is doing.
  • If you're not good at any of the above, hire a crowdfunding consultant or agency. You really do get what you pay for. FYI - If you think hiring a professional is expensive, wait till you see what hiring a novice costs you!  :)

Ken Steinberg Innovator and Serial Market Disrupter

July 12th, 2016

Why would you pay someone else to do your crowdfunding.  I've done this several times and @David is right, this is the job of the SME and your network.

Jennifer Fortney 20+ years’ experience in PR & marketing comms; Founder of Cascade PR, Chicago firm for small business & startups.

July 13th, 2016

Hey, Kevin,

Most of my clients that have worked with an agency specifically geared to crowdfunding have been unhappy. 

We've done a combo of me as a consultant and doing their PR. As a consultant I create a strategy and action item list to help keep them on task and deadline, and then I focused on generating some media attention around their campaign/launch for a % of the total raised. The real key is to set them up for success including getting them on the phone with one anther as business owners to discuss the experience and key learnings. For my clients, this has been the most affordable and productive choice.

Crowdfunding campaigns are a lot of work. It's easy to look at an agency that says they can do it all, but they will take a large %, of which you have to work into the final raise along with platform fees. So you will actually end up raising a lot more and we know that you want to keep your raise ask reasonable to actually make funders feel hopeful that you will be successful. 

Hope this is helpful.

Crowdfunding Consultants http://www.crackthecrowd.com/

January 21st, 2017

Crowdfunding can help whether you’re looking to fund your project, prove a concept, share your idea or bring change to the world. Benefit of working with a crowdfunding marketing agency is the fact that your campaign will have a much higher chance of success.

David Austin

July 12th, 2016

In the crowdfund world you want someone connected and deeply experienced. You also want someone who will give your startup a personal touch and see this as a launching pad to a growing relationship. That being the case, if they're all at the top of their game I think I'd put the consultant in 1st place if you can validate that they aren't already consumed with another client (big if). Could be a tossup between Agency and New Hire for 2nd place ... depends on what kind of personal attention the agency will give you.

Mark Sendo Founder, CEO, Forbes Contributor, Conference Speaker, TechCrunch featured story twice

July 12th, 2016

I have a retail Pet Industry product currently in the stage of building a working prototype.  I like the idea of a "consultant" .   Where can I find them?  how to insure a consultant is dedicated to our project?  How much can we expect to compensate the person?  do they handle everything from the video to the rewards, etc...?  

Ken Steinberg Innovator and Serial Market Disrupter

July 12th, 2016

@Chia, I can help you if you like.  I have experience in Crowdfunding...

Roy EA Helping Clients Build Products, Processes, & Profits| Adjunct Chief Financial, Research, or Operations Officers|

July 13th, 2016

John's historical funding data does not take into account the new realities under the JOBS act.  Now, far more sophisticated enterprises will be involved at the higher levels, who will have better concepts and teams.  It won't change the success rate for the 100 to 250K circus.  But those seeking higher investments will approach or exceed the 45% success rate.  And have consultants as part of their teams.

Adam Pressman

July 13th, 2016

Crowdfunding is a result.  It's not a process, skill, science or art.  All of what goes into gaining that result may be: marketing, PR, social media, tech, staffing, accounting, law, etc.  I say this so you'll identify which provider of those services will do better than you what it takes to get the result.   Some have posted correctly that the crowd backs you and that you can (and should) do some of the above yourself.  We learned that freeing the entrepreneur to do what entrepreneurs do best; get people excited and as committed as the entrepreneur to the success of the venture is what's important. 

If you can focus your efforts on getting just 150 people who are as committed to the success of your venture as you are, you have a tribe.  From that tribe you'll get money (hopefully 30% pledged before your campaign even has a website), talent, ideas and connections.   With those, any consultant in the above pursuits will be able to get your tribe of people you know to become a crowd of people you don't, all rallying behind your venture, realizing it, sustaining it, and growing it into more than you imagine.  Isn't that the reason you're doing this?

Chris Gorges Partner, Strategy at Rocketure

August 15th, 2016

Everyone here seems extremely anti-agency when it comes to crowdfunding, but the fact is, the agencies exist. So at the very least, give them a look. I have zero vested interest here -- I just have a list and wanted to share / encourage you to keep an open mind / do your own research.

http://www.crowdfundx.io/
http://launchlab.guru/
http://gogostarters.com/
http://crowdco.co/
http://www.crowdfundmafia.com/
http://ignitecfp.com/
http://www.agency20.com/