Crowdfunding is an increasingly popular online concept that anyone can use to raise money for any project or idea. But for it to be successful you need to plan your campaign well, taking into account various factors.
"Never a day goes by when someone doesn't contact me after launching a crowdfunding campaign asking why no one is backing it", says Anthony de Souza, Crowdfunding Specialist.
"More often or not they have missed all of the following critical success factors"
You need a crowd
Before you kick off your campaign, you need a crowd who will be willing to back it! The reality is that strangers do not spend their days trawling through the internet looking for projects to back. There is only a small percentage of 'serial' backers that will go on to back more than one project. As for those that do back more than one project the figures are in the low single digits and will not make a significant difference to what is ultimately raised.
So if strangers do not back campaigns, who does? I have on one occasion worked with a project creator who spent over 18 months building his crowd before he went crowdfunding. His project was certainly not one of the 64% (Kickstarter) of campaigns that failed to reach their target.
You need a realistic target
Setting a realistic target is a greater challenge than you might think. More often than not project creators are over confident about how much money they can raise, how large their crowd is, how responsive they will be and how much they will be prepared to invest, which means in most cases crowdfunding projects will fail to reach their target.
There is no exact science behind how to set a realistic target but there are ways you can at least work out what you can expect from your crowd. At the very least you should be confident that you can raise a third of your target within 48 hours of launching your campaign.
The likelihood of reaching your target diminishes drastically if you do not achieve this.
What it means is that you need to have a very clear idea of where the first 33% of your funding is going to come from. You need to know how much and who will be giving. You cannot wait until after launching the campaign to figure this out.
Choose the right crowdfunding platform
There are over 2000 crowdfunding platforms worldwide with new ones starting up each week, serving the six main types of crowdfunding out there.
Which one is best for you?
Most project creators I work with do not know that there are different types of crowdfunding. At the very least they miss out on the fact that they may, over time, benefit from more than one type of crowdfunding.
Once the type of crowdfunding has been established this narrows the field down dramatically in terms of the crowdfunding platforms a project creator can consider.
However, each crowdfunding platform has its own rules and regulations. This requires some due diligence and this research must be done even before considering a crowdfunding platform.
To top it all there is also the choice of you going out on your own. You can bypass a generic crowdfunding website and build your own. The obvious benefit of going this route is saving on platform fees. However on the other hand this saving could easily be swallowed up in the expenses of setting up your own website and payment mechanisms.
It is quite a mission to figure out the best crowdfunding platform but an ill chosen one can scupper the possible success of your campaign.
There's lots of factors to consider when launching a crowdfunding campaign, but these are just some of the main ones to consider to make your campaign a successful one.