I have a couple of friends that are looking at raising capital with crowdfunding for a tech startup. My understanding is that most of the companies that come out of the gate raising millions of dollars are those that have been able to put a lot of strategy before the launch. Any thoughts on how to build such momentum?
More than 65% of new companies fail because they lack funding. In this course, you’ll learn common fundraising mistakes, how to nail an elevator pitch, how to craft a killer pitch deck, where to source investments from, and all about term sheets and convertible notes.
To have a successful crowd source funding campaign you need to invest in the following:
1) A creative, concise and engaging video that answers the following questions: Who are you? What are you creating/making? Why are you making it? How and When are you making it? and What do you need?
2) Secure at least 30% of the goal upfront and make sure the money goes in the first three days of the campaign. With the exception of family and close buddies, no one will contributes to a campaign that is less than 30%.
3) Start connecting with your audience on social media way before the campaign at least 3-6 month before the start the campaign. During that period make sure you are providing and engaging everyone very strongly.
4) During the campaign make sure to strategically release articles, conduct interviews (TV, Radio, Podcast..etc), give presentations, workshops, seminars. Obviously all of these will need to be setup way before the campaign starts.
5) Plan a huge launch and closing party. Try to find a sponsor for these, bring guest speakers, provide food and make it a lot of fun. You can invite all your friends and buddies to come and call at least 10 people while there are there.
6) During the campaign make sure you have a strong social media manager who will mange all the social media platforms. Make sure they have enough material and consistently release updates and information.
7) Plan for multiple follow up videos to share information updates..etc.
8) Plan a decent budget for your social media advertisement. You can do some tests at the beginning of the campaign to figure out your demographic and then hit them hard. I would say put a side at least 2-5% of your goal. It really depends on your product but I have heard about people going all out with 10-20%, and got some really great returns.
I hope this helps. The most important thing is to make sure you are very realistic with your goal. The only guaranteed money will come from the people you know. So the most realistic way to go about it is to ask yourself how much are you worth to all your friends and the people you know? Obviously this will depend on how much you have invested in them over the years.
As for your campaign going viral, that is usually very rare. It will really depend on your idea/product, video and campaign. But I wouldn't count on that.
Independent Venture Capital & Private Equity Professional
September 8th, 2016
Crowdfunding sites recommend you prime the pump with your own cash. That makes sense to me.
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Mobile Apps Developer - iOS / Android at AccuWeather
September 9th, 2016
For successfully raising "funds from the crowd" you have to appeal to the "crowd". Based on how fantastic your appeal (video) is, and proof on the research and your capability to perform the task promised will raise the chances of being able to fund your project. Of course better incentives attract more people.
Marketing Consultant, Ex-Paratrooper, Husband
April 6th, 2017
Prep the groundwork before you start - lots of content, good relationships with relevant thought leaders, and fully understanding the crowdfunding platform.