It can be tough to know the best way to raise funds or even complete your crowdfunding campaign if you’ve never fundraised before. Take a look at the following crowdfunding do’s and don’ts to ensure that your first fundraising effort will be a success!
1. Conduct a market research to validate your idea. Build your audience before launching your campaign. This will give you an idea of how your audience is excited about your start-up idea.
2. Connect with millennials; these younger generations are most attractive donors. The reason is simple: Youngsters are more connected to social media, are good tech users and have a direct connection to cause or people they support.
3. Keeping campaign shorter around 40 days for best results.
4. Be great with your math: This doesn’t mean you should become a great mathematician but to well calculate your budget, reward cost including shipping and tax to avoid over or under spending on anything.
5. Get your product ready before or after your campaign ends as per your commitment to your backers. Otherwise, no matter if you have raised 1000% funds of your campaign goal, you will end up with a failed business.
6. Offer great customer support is key to run a successful business. Focus on customer delight pre and post sales. Engage a couple of your team members in live chat support to help visitors understand more about your product/service will lead them to become backers of your campaign.
Once you sell your product or services don’t think your job is done, delight your customers/backers even after sales to fix their issues with your product/service will play an effective way of improvement, engage your delivery, post-sales and support team members here.
7. Who wants to buy faulty products? People relatively less trust product doesn’t cover guarantee or warranty. Understand anxiety of your customers, offer them guarantee or warranty you can afford your reward cost and make them feel that if anything happens to your product you are there to fix them.
8. People love customization. Let’s talk about a real-world example of how Rolls-Royce took one important step forward. Do you know what makes rich people crazy about Rolls-Royce cars? Luxury, Class, Rich-Feel, Enjoyment, Hobby, Quality? Well yes but not only this but also customization.
Rolls-Royce lets customer build a custom car which gives the feeling of uniqueness and it makes sense because after spending thousands of dollars no one wants to see copies of the same car overtaking him on the highway.
Well as a start-up, you cannot match your customization to Rolls-Royce, but offering customization that you can afford is always a good idea.
1. As you already know that your friends and families would become early backers of your campaign but don’t ask money they cannot afford to back or you won’t be even able to tap into these early backers to your campaign.
2. Don’t overlook local regulations might applying to product and services you are offering or it would be serious consequences for you and your start-up.
3. Don’t ignore tax implications: Donations made through crowdfunding are tax deductible if they are made to a 501(c)(3) organization under the IRS tax code.
4. Don’t release ideas unprotected as you cannot copyright or patent your idea. Launch something tangible with your crowdfunding campaign to protect your intellectual property. If you have only idea and nothing solid it means it is not the right time yet.
5. Don’t offer monetary rewards until and unless you are raising funds as equity or debt. Monetary rewards are ineffective in reward crowdfunding as the notion of this type of crowdfunding is related to product or service or goodwill only.
6. Don’t forget to thank supporters just like traditional donations, every single backer of your campaign is important and deserve appreciation. This is the daunting task but keeping it recorded properly can make this task doable. This task is also important to build relationships with potential donors for future campaigns.
Starting your crowdfunding campaign is like working on two start-ups at a time. Crowdfunding is like another business and will require all sort of resources to run your successful campaign. If you think you do not have sufficient resources available in terms of a team of expert you can hire crowdfunding marketers, planners and consultants.
Plan Early – Execute On Time – Get Succeed