Crowdfunding campaigns becoming more common
You have an idea for a company, but you need some capital to get it off of the ground – you have the standard options of traditional bank loans, peer-to-peer lending networks, personal loans from family or friends, and now, crowdfunding wherein you solicit pledges online from people you know as well as strangers.
There are many types of crowdfunding sites now, each with their own advantage, for example, Kickstarter is the most popular, so consumers may be more likely to pledge as they are familiar with the platform, and Indiegogo attracts creatives and fans of creatives, while CircleUp launched just to serve consumer companies. Alternatively, EarlyShares offers equity crowdfunding for business, and Crowd Supply takes a product all the way through the fulfillment process so inventors aren’t packaging widgets in their garage.
Another crowdfunding option
Most crowdfunding platforms focus on the business of funding ideas and products, but sometimes, you may need money for other reasons. During the recession, cash reserves were wiped out for many small businesses, so a fabric shop run by a young couple with only two other employees could be in hot water if their air conditioning system goes out. GoFundMe is a crowdfunding site for more than just startup ideas, it is being used for everything from fundraising for school trips to helping pay friends’ medical bills.
The site is flexible and doesn’t limit people to one type of fundraising, so if that young couple wants to fundraise for a new air conditioner, they have a formalized way to do it.
Four tips on launching an effective crowdfunding campaign
Slapping up a crowdfunding campaign on a site doesn’t just magically attract dollars, and Brad Damphousse, CEO of GoFundMe offers the following four tips to see that you meet your funding goal, whether you’re helping with a coworker’s child’s medicine costs or looking to launch a new product:
- Set a clearly defined goal. You want to make sure that you are setting realistic and specific goals. If you are trying to raise money for your first three guitar lessons and ask for $80,000, I highly doubt that you will receive many donations. How much does a lesson cost? Be specific. Donors may be a bit put off if you’re rounding up their generosity and hard earned money.
- Write a catchy and descriptive title. Think of your donation page title as a headline in a newspaper.
Which page would you donate to?
- ‘Help Me, I need Money!!!’ or…
- ‘Help Tommy learn to Rock!’
What, Tommy wants to rock? We need to help him! But how?
- Use a great photo or video. Along with a catchy title, be sure to use an image or video that helps clearly communicate what your page is all about. Maybe it’s a video of Tommy playing the guitar horribly, or an image of a people around him booing. Whatever the case is, you want to show the subject of the your donation page. NOTE: Try and avoid using logos, graphics and other clip art on your page.
- Share. Share. Share. What good is a great-looking page if nobody can see it? The most important thing you can do to ensure a successful fundraising campaign is sharing your page link. Once someone receives your page link, they can click on it to make a donation.
Crowdfunding has risen in popularity, and has attracted a lot of attention, but like any marketing effort, it takes hard work to get the word out, so if you’re considering crowdfunding, take Damphousse’s advice above to improve your chances of meeting your fundraising goals.