How to Launch a Successful Crowdfunding Campaign (Crowdfunding Part One)

You’ve no doubt heard of popular crowdfunding sites like Kickstarter, Indiegogo or GoFundMe. But name-recognition is one thing. Understanding if crowdfunding is right for your business is something else entirely. Even more important? Figuring out how to plan and launch a successful campaign.

Let’s start with the basics. Crowdfunding involves taking your idea or product to the masses and asking them, through a 30-60-day online, often multimedia campaign, to help fund its creation in exchange for a reward. Said reward could be as sweet as a free box of cupcakes from a fledgling bakery or as enticing as an equity stake in your growing company.

A crowdfunding campaign typically has three key components. You’ll be explaining: 

• Your story (who you are and what you do) 
• Your “ask” (what do you need and how much will it cost) 
• Your reward (what will you offer your backers if you meet your goal)

While there’s no foolproof formula for getting funded, many successful campaigns present these three essential elements in a way that feels fresh, engaging and totally authentic to the company or product.

Why crowdfund? Six reasons.

Deciding whether or not to crowdfund really comes down to your desire to put in the real time and effort it takes to convert your social capital (and connections) into real capital. Remember, you may want to explore other financing options, too, like taking out a small business loan or trying to grow your business without outside funding.

If you do decide to launch a campaign, here are five reasons you may be glad you did. Crowdfunding is a fantastic way to:

1. Tap into and grow your customer base. The majority of crowdfunding donations will likely come from your existing network and connections (and your connections’ connections). Getting people excited about your new venture even before it’s fully up and running helps proactively build a strong network of support.

2. Get market feedback fast. Are your eco-friendly, recycled socks priced too high? Do people really want a Bluetooth-enabled dog leash? Is there really a market for a raincoat that doubles as a bathing suit (okay, now we’re making things up)? Point is, crowdfunding lets potential investors/consumers weigh in on the merits of your idea, and you can iterate as you see fit.

3. Connect with investors who truly care. For many investors, the appeal of crowdfunding is simple: It’s a tangible opportunity for them to help a brand they believe in. At a time when consumers are increasingly asking businesses and brands to do good, crowdfunding lets your prospective customers invest in something they feel is meaningful.

4. Level the playing field. All you really need to launch a crowdfunding campaign is a good idea and an Internet connection. That means just about anyone can make their pitch and try to reach their fundraising goals. In that sense, crowdfunding has leveled the playing field for entrepreneurs across every demographic. Hurray!

5. Start out ahead (not in the red). Let’s not forget this final, crucial selling-point for crowdfunding: If your persistence and dedication pay off and you reach your funding goals, your cash infusion comes in completely debt-free. Cha-ching!

Ready, set … pre-launch!

Let’s say you’ve got a solid business plan and an innovative product. You might even have a prototype or two on hand. Are you now ready to kick-off your campaign? Not quite. In fact, some experts recommend you post a compelling landing page on your crowdfunding site six to twelve months before you launch the campaign itself.

Why? Proactively building an online presence gives you time to encourage mailing-list sign-ups and attract countless social media followers. Pre-launch marketing also lets you tweak your message and work out any unexpected kinks.

Along the way, you might just be lucky enough to catch the eye (and reap the praises!) of a celebrity, a thought leader or an industry innovator. That could earn you a tidal wave of interest – and contributions.

3, 2, 1 … blastoff!

Now can you launch? If you’ve promoted the heck out of your upcoming campaign, your product video is informative and engaging and you’ve got some irresistible enticements lined up for your future investors, then … you’re nearly ready. Before you hit “go,” have you considered your timing?

Turns out, when it comes to asking for cash, not all dates are equal. Three laudable launch windows include the 1st and 15th of the month (yep, payday) and around the time when most folks are receiving income-tax refunds -- generally between mid-April and mid-May.

Okay. Now you’re ready to crowdfund!

Kickstarter recommends running campaigns for 30 days or less for best results, but you can choose up to 60. At any length, the last few days will likely see you pushing for down-to-the-wire donations. This is the time to work social media – and in case you’re wondering, Facebook activity peaks on Wednesdays at 3:00 p.m., while Twitter’s top timeframes are Monday through Thursday from 9:00 a.m. to 3:00 p.m. (how’s that for a trivia question for your next dinner party?).  

If your campaign is fully funded by the time it ends, you deserve hearty congratulations. Take some time to celebrate, but remember, there’s no rest for the weary — or the entrepreneur. Your backers will expect regular progress reports, not to mention the aforementioned enticements or rewards.

Now that you’ve crowdfunded your way into a becoming a bona fide business owner, the real work is just beginning. Good thing you’ve got a crowd of supporters, ready to cheer you on!

Before you go

Want to do a deep dive into crowdfunding? Here are some great links to get you there.

• Read about this awesome initiative: “Backed by QuickBooks” Gives Cash to Compelling Campaigns (Crowdfunding Part Two)
• Watch videos of some recent, highly successful campaigns.
• Click here to discover how to make your campaign stand out, how to use Kickstarter as an investment opportunity and more.

QB Community members, have you run or supported a crowdfunding campaign? Tell us: what was great about it – and what wasn’t? We’d love to hear your story!