Judging by the runaway success of some high-profile crowd finance campaigns, you might think it’s easy to raise money from the crowd.
All you do is sign up to Kickstarter or Seedrs, write some generic blurb, chuck up a few sexy photos of your project and the cash pours in. Right?
If you want to be successful, you need a plan.
First, it's important to have a clear understanding of what you’re selling and who you’re selling to. But that's only half the battle.
Next, you’re going to have to sit down, take a deep breath and wade through the plethora of crowd finance platforms in the hope you pick one that’s right for you.
Given the huge number of options, it can be easy to get overwhelmed with choice. Kickstarter,Indiegogo, Gofundme, Seedrs, Crowdcube, Ratesetter, Zopa… the list goes on. And on. And on.
But don’t worry. Crowdsurfer’s got your back. After all, crowd finance is our thing. So, before launching your campaign, here’s some friendly advice on how to choose the right platform.
Firstly, define success
What does success mean to you?
Funding for your project? A larger, more engaged following on social media? Increased media exposure? You probably won’t achieve all these things, so identify your priority and focus on it.
Be realistic. Don’t get carried away. Your campaign probably isn’t going to go viral and attract over $9 million in funding. Well, probably not. But you never know.
Consider “product market fit”
Marketing is simple, isn’t it? You work out who you’re trying to reach, how you’re going to reach them, and what you’re going to sell them. Unfortunately, the reality is a little more complex.
Different platforms serve different types of projects and communities of backers and entrepreneurs in different ways.
Are you raising money to fund development of a physical product, or to stage an event? If so, you might consider using a rewards platform like Kickstarter or Indiegogo to raise money in exchange for perks, like early access to products or experiences.
Are you looking for seed capital to grow a startup? Equity platforms like Seedrs and Crowdcube have built large investor audiences who are always on the lookout for startups with strong growth prospects. They streamline investor documentation and settlement, reducing the administrative headache so you can get on with growing your business.
Are you looking to borrow money quickly, with minimal fuss, without the hassle of taking out a bank loan? Try a peer-to-peer lending platform like Ratesetter or Zopa. Backers lend you money and you pay it back over a pre-determined term with a fixed rate of interest.
Or maybe you’re looking to raise money for a personal, community, or religious initiative. There are platforms dedicated to that too. Check out JustGiving or Gofundme, both of which have huge followings and strong track records in attracting donations for charitable causes.
Plough the niche
Once you’ve decided what type of crowd finance platform to use, it’s time to plough the niche.
If you find a platform that truly understands your industry, you’ll enjoy huge benefits…
- You’ll spend less time educating backers about what you’re looking to achieve.
- You’ll reach people who understand your market and can accurately assess your value proposition.
- You’ll benefit from network effects, whereby well-connected backers share information about your campaign, driving engagement and increased financial investment in your project.
So, find your niche and plough deep into it.
Tool up with Crowdsurfer
You’ve made it this far. You have a plan. You understand the diversity of the crowd finance market and the need to choose your platform wisely. You’re now ready to look at the options.
Crowdsurfer Pro gives you unparalleled visibility on what’s happening in the market, across different platform types and niches.
You can analyse the entire crowd finance market from the bottom up, tracking projects similar to your own and piecing together a picture of what other campaigns did well, or why they came up short. It’s always easier – and cheaper – to learn from mistakes made by others, rather than making your own.
You can also perform top-down market analysis that will give you a feel for the sort of projects that are getting funded on different platforms. This will tell you how much money has been raised via a platform within a given industry niche, or how many campaigns a platform has handled and how many have fallen short of their funding targets.
Crowdsurfer Pro can answer all of these questions, empowering you to pick the right platform for your needs. This will maximise your chance of success.
Raising money from the crowd isn’t a walk in the park. But it doesn’t have to be a leap in the dark. We’re here to help. So get in touch if you have any questions.