- Finance, Advice
How to get started with crowdfunding
When you first ventured into the world of freelancing, you may have used a funding source commonly referred to as “bootstrapping.” This simply means that you used your own money to cover your start-up costs. Others have relied on investors or personal loans and some have leveraged capital from family and friends to jump start their freelancing careers.
Thankfully, for those who may not have or cannot save up enough money or who don’t have access to traditional funding streams, there is another form of funding that is a great fit for freelancers. Crowdfunding has become a popular way for some freelancers, small business owners, and entrepreneurs to raise initial funding and/or to accelerate their businesses.
When I learned about crowdfunding a few years ago, I was hesitant because I have this thing about asking people for money, but my views have changed drastically as I have watched other people launch successful crowdfunding campaigns that yielded great results. Here are some examples of some of the most successful campaigns:
What do successful campaigns have in common?
Have a good story
One of the most obvious is a backstory or captivating narrative for why a person is seeking funding and why his/her project/business is needed. The story often takes on the same characteristics of any good, persuasive writing.
Since you are asking people for something, it makes sense that you must convince them why they should believe you. To be honest, you have to be clear about what they will get out of it. Paradoxically, even though you are the one raising the funds, it is not about you; instead, it is about why others should invest in your vision, your idea, your business or your dream. Make sure that your pitch is engaging, lucid, and compelling.
Use the right platform
It is not enough to just have a good story. Also make sure that you are using a crowdfunding platform that is a good fit for your freelancing goals.
There are two types of platforms: rewards-based and equity crowdfunding. Rewards-based platforms like kickstarter.com and indiegogo.com allow people to donate without having equity in your project/business—keep in mind that some campaigns are all or nothing, so be realistic about your funding goals. It is also worth noting that these platforms have fees associated with them.
Another option is equity crowdfunding, which allows people to become actual shareholders in your company. This platform may be optimal for those freelancers who want to launch businesses. Two platforms that you might want to consider are crowdfunder.com and circleup.com. Indiegogo recently added the option of equity crowdfunding on their platform as well. As with anything, make sure that you read all of the fine print and that you are comfortable with the platform, its services, and the fees.
Marketing, marketing, marketing
This last step is the one that I struggle with the most—marketing. Poor marketing can ruin even the best business endeavors. This is why marketing is critical to every crowdfunding campaign. How do you gather a crowd or let people know that you are raising money?
Most of us will start with the familiar—friends and family.
I love my friends and family, but if you rely exclusively on them then there is a strong possibility that you are not casting a wide enough net. Instead, leverage your existing network that includes family, friends, former clients, current clients, school alums (e.g. high school, college), groups that you belong to, and lastly, members of your social media family. But don’t just post it and leave it—actively engage people by asking them to share it within their networks.
Another technique that seems to work is “bartering” with someone who has a larger network. I may have 1,000 friends/followers/connections and someone else may have 10,0000. A simple shout out from the person with the larger platform and a link to the campaign will suffice. Also, think about doing FB live, Snapchat and/or Periscope videos.
If you are not a fan of social media, you can write guest blogs and include information about the campaign; you can also appear on traditional radio shows and/or podcasts that reach your targeted audience. The key is driving visitors to your crowdfunding landing page.
A good crowdfunding campaign is only as good as the traffic that it generates. Once people get to the campaign, your content should help convert a visit into a DONATE.