Crowdfunding can be an effective tool for accomplishing your startup goals. Whether you’re looking to jumpstart your marketing efforts, expand your customer base, or reach out to friends and family for funding, crowdfunding provides a platform to rally support around you and your company.
Having worked with hundreds of entrepreneurs who have conducted successful fundraisers, we have distilled seven key strategies for launching a successful crowdfund:
- Tell your story. As the old adage goes: facts tell, stories sell. When it comes to eliciting customer engagement, a campaign with a good story is an unparalleled strategy. Did you experience some kind of obstacle on your path to entrepreneurship? Did a major life event influence your career choice or business decisions? Tell your story in your crowdfunding pitch to make a connection with backers and encourage engagement. If you don’t have a personal story to share with your audience, share facts and highlights about your startup, product or vision instead. Describe the problem (and severity of the problem) your product will solve, or discuss the vision for your startup. Keep your tone and messaging personal to make backers feel closely connected to you and your project.
- Provide value for value. Crowdfunding campaigns hinge on reciprocity. If your startup offers fantastic products, rewards or opportunities, you’ve created a huge incentive for backers to pledge to your campaign. When choosing your reward tiers, reflect on whether the incentives would appeal to you if you were the consumer; ask friends, family members and business acquaintances for their honest opinions as well.
- Introduce scarcity. A basic law of economics dictates that scarce supply inherently creates greater demand. Create greater demand for your startup by limiting one or more of the higher level rewards to just a few — this will inflate demand for those rewards and result in higher pledge amounts for your crowdfunding campaign!
- Create a marketing event. People love to feel like they are part of something bigger than themselves. Try to build a feeling of excitement and rally others around your crowdfunding campaign by tying the launch to a large, well known event. You can connect your product to a holiday, sporting event, or season to increase the momentum surrounding your launch. You can leverage the emotional connection surrounding these events to get people excited about your product and engage them in discussions. This is especially useful for connecting with backers through social channels, capitalizing on trending topics and popular hashtags to get more eyes on your fundraise!
- Highlight examples of social proof. Going back to the human desire to feel like a part of something bigger than themselves, most people don’t want to be the first or only supporter of a crowdfunding campaign — they want to see other influential advocates joining in. Do you have someone notable as an adviser, backer or endorser of your startup? Share your list of partners and patrons to give confidence to new backers and let them know that they won’t be the only one at your party.
- Build credibility and legitimacy. Many backers will believe it when they see it. In other words, they require some kind of evidence that your startup is legitimate and picking up steam before deciding to back your crowdfunding campaign. Show your backers what they’ll be supporting in detail — how it works, how you came up with the idea, and even pictures or videos if you have a prototype. Remember that you will likely never meet your backers, so the more proof you can provide that your startup is legitimate the better.
- Interact with your supporters. Don’t leave your backers in the dark for weeks after they’ve supported your project. Interact with your audience through frequent updates, thank-you emails or social media outreach, and responses to their questions and feedback.You can build anticipation and increase engagement in many ways. Post updates counting down to a big surprise regarding your project, conduct a product giveaway, or even host a contest involving your crowdfunding campaign. The opportunities here are endless and can be tailored for your specific startup.When interacting with your backers, always encourage an open dialogue and engagement. In general, people would rather talk than listen. Treat your updates and outreach as a conversation rather than a one-sided message.
Eric Corl is the Co-Founder and President of the crowdfunding site Fundable.com. Eric has been on the founding team of three successful startups including Fundable, IdeaBuyer and Startups.Co, all of which have focused on getting early-stage startups to market quickly and effectively. He is also a partner at Virtucon Ventures, an early stage incubator that brings new ideas to market.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.