Launching a startup requires money, and no matter how much you’ve saved, you’re probably going to need more. In today’s startup market, seeking venture capital (VC) funding seems like the best way to raise money especially because VC firms often offer large checks and access to valuable resources that startups need. However, VC funding comes with strings. Investors will take equity from your business in exchange for that big fat check, and you might lose operational control over your company.
However, there’s some good news; VC funding may not be your only option. Crowdfunding is a great way to raise large quantities of cash without sacrificing equity. However, not all crowdfunding campaigns are successful. Here are some commonalities among some of the most successful crowdfunding campaigns:
They say luck is where preparation meets opportunity. Technically you could throw up a campaign with a few lines and a picture and hope for the best. However, the most successful campaigns all have at least one thing in common: they were meticulously crafted. Kickstarters like Jeneba Barrie and African American College Alliance Clothing crafted compelling campaigns with captivating copy, high-quality videos, and enticing incentives for donors. Launching a successful Kickstarter campaign will be a test of your powers of persuasion.
Have a Functioning Prototype
This might feel like a chicken and egg situation, but you really should have a functioning prototype before launching a crowdfunding campaign. People like to see what they’re donating money towards. Having a functioning prototype shows donors that you’ve put in the hard work and created a product that works. If you haven’t even started working on your product yet, it will be hard to convince potential donors to help fund your dream. Your campaign video should include demonstrations of the product in action.
Offer Value to the Donors
With a Kickstarter campaign, you will not be required to offer equity for donations. In fact, Kickstarter doesn’t allow it. However, the most successful Kickstarter campaigns offer well-thought-out gifts to their donors. Prizes often range from thank you notes and small gifts at the lower donation tiers, to actual products at the higher end. Whatever it is, you should tangibly show your appreciation and incentivize donors to give more.
Carefully Select a Funding Goal
Here’s the harsh truth about Kickstarter: it’s all or nothing. That means that if you don’t meet your funding goal by the end date, you get none of the money. This one factor makes planning even more critical. Aim too low, and you might miss out on donations. Aim too high, and you might not hit your target. You’ll need to be brutally honest about how much you need and how much you think you can get.
Solve a Problem
You might think your product is the coolest thing ever but, if it doesn’t solve a problem for consumers, your Kickstarter probably won’t get much traction. Even the Potato Salad campaign offered to solve a consumer problem: finding the perfect potato salad recipe. This entrepreneur sought to change the world and finally end the debate about what belongs in a potato salad. Even if you doubt Zack Danger Brown and his potato salad-making skills, you can’t deny that it was a compelling campaign.