Crowdfunding can be a great way to fund your startup.
Unfortunately, according to Zippia, less than a quarter of crowdfunding campaigns succeed. Part of it is out of your hands – only so many people are willing to help fund campaigns, and those people only have so much money.
Alternatively, maybe consumers just aren’t interested in your startup. This is especially true if you won’t have any tangible rewards for backers or if your startup caters more to businesses than end consumers.
What You Can Control
There are many options for crowdfunding platforms, and each one has different rules.
Kickstarter is the best-known platform, but you only get the money you raised if you meet your original goal. Indiegogo and GoFundMe are both popular as well.
There are some platforms specifically for startups, too, like SeedInvest, StartEngine, Republic, and NextSeed.
A good marketing effort is key to getting attention from potential funders. Your marketing efforts should give people a glimpse of your startup and what you’re crowdfunding for.
The point of marketing is to build excitement before your campaign starts so you can hit the ground running. Then it should run for the duration of your campaign to keep drawing in new backers.
Communicating with potential funders is just as important as marketing to them. Your marketing should get their attention, and you should use continuing communication to keep that attention.
Be transparent about what your funding goal is and how you came up with that number. Keep your backers updated on progress and timelines. Anything you can do to get your funders engaged with your project and keep them excited.
Your marketing and communication efforts should come together to build a community of people who are interested in your startup. Building your backers into a community helps them feel involved in the process and keeps them interested. Those community members will be more likely to invest in your crowdfunding campaign and promote your campaign to people they know, which leads to more attention for your campaign.
What To Do If You Fail
The first thing to do if your startup crowdfunding campaign fails is to thank the people that did support you. Tell them what their support means to you and encourage them to keep up with your company in other sites. Your campaign may be over, but your startup is not.
Once you’ve shown your appreciation, it’s time to turn your attention inwards. What parts of your campaign worked well, and what didn’t? Maybe you had a lot of support at the beginning of the campaign but you didn’t keep that momentum going. Maybe your campaign never got a lot of attention or your goal wasn’t realistic. Take the time to review and re-evaluate.
Once you’ve analyzed your results, you have to decide if you want to try crowdfunding again or try a different way to get money for your startup.
If you do decide to try crowdfunding again, re-strategize and make sure you’re better prepared. Have your marketing materials ready before your begin, know what your goal is and why, and be prepared to deliver on any promises you make. Your second crowdfunding attempt will be harder than the first, but you should be better prepared.
What To Do If You Succeed
Your work isn’t over if your crowdfunding campaign succeeds. You need to keep up the momentum you’ve created both internally and externally.
Internally, you need to prepare to deliver on any backer rewards or prototypes you’ve promised. Ideally, some of these should have been almost ready to go before your campaign started. Get your merch into production, get your prototypes working, and get postage supplies ready. Make sure you have the people necessary to get everything done in a timely manner, too.
During all this, make sure you continue to communicate with your backers. They were excited enough to help fund your project, so keep that excitement going. Share behind-the-scenes photos and glimpses of rewards before they get sent out. If there’s a shipping or production delay, tell your funders as soon as you know so they don’t get impatient.
A word of warning – as disappointing as it is to fail during the crowdfunding campaign, it is much worse to fail at delivering promised rewards. Failing to deliver the rewards you promised your backers generates a lot of negative publicity for your startup, which is something you really don’t need.
Crowdfunding can be a great way to fund your startup, but there’s no way to guarantee success. There are, however, many factors you can control. Making sure that your crowdfunding campaign is well planned and thoroughly executed is key to making sure your campaign isn’t a complete failure, even if you don’t meet your funding goal.