Crowdfunding: The New Way to Raise Money for Your Dream Project
In case you missed it, there’s a huge trend happening, one that is transforming the world of investing and entrepreneurship.
It’s called “crowdfunding,” and it’s putting the power back into our hands by asking the general public to vote for which ideas it thinks are worth funding.
In the good old days, if you needed some serious capital to kick-start your idea, you had to give up a large chunk of equity and control to investors. Or you’d have to bootstrap your business like a punk. But not anymore.
Now it’s easier than ever to get that career project off the ground or start your own business.
Crowdfunding is one of the five key trends that will play a pivotal role in 2013. This is the latest craze, and it’s a unique way to allow others to invest in and part-own your dreams—and help you to succeed along the way.
So, how do you get started, which platforms are best and what makes a successful crowdfunding campaign?
5 Steps to Get Started and Become a Crowdfunding Pro
In a nutshell, crowdfunding works like this.
- You have an idea for a project or initiative, such as writing and self-publishing a book.
- Work out your campaign details and figure out how much money you’ll need.
- Post a compelling video and description that makes people want to support you.
- Create levels of investment rewards that will entice people to give more.
- Set about promoting the heck out of your campaign via the platform and your own networks.
Choosing the Right Crowdfunding Site
First up, you need to pick your platform, which can be tricky, as there are reportedly more than 500 crowdfunding websites.
I firmly believe it helps to stick with the ones that specialize in your area and show the best track record for success in reaching the required funding amount.
Most of the platforms work on this concept: if your target goal is reached in the time frame set (usually 14 to 60 days), you get your money, minus a small fee (which goes to the platform company). Some, however, will award your money even if you don’t reach your goal.
There’s a lot to be said for the all-or-nothing approach, though, both for motivating yourself to reach your campaign goal and for enlisting the support of others.
Here are my picks for best of the bunch. I’ve included examples from a few campaigns that have worked and why to help you jump-start your own.
It’s likely you’ve heard this increasingly household name. Kickstarter gets a lot of attention, and for good reason: it’s simply one of the best platforms in terms of layout, ease of use, reputation and track record for getting campaigns funded. It is, however, limited to residents of the United States and, more recently, the United Kingdom.
Example Project: Goldieblox, The Engineering Toy for Girls
This unbelievably popular Kickstarter was destined to be a winner. When I first watched Debbie Sterling talk about the need for more young girls to become interested in technology and engineering, I was hooked:
She’d designed a fantastic tool that appealed to young girls while at the same time teaching them valuable skills about the mechanics of how things worked.
The Outcome: $285,881 raised for $150,000 goal.
Why It Worked:
- A strong “why” message from Debbie really resonated with parents who want the best for their daughters.
- It was timely, considering so many organizations are recognizing the future role young girls will play in the world of technology and the importance of encouraging them to pursue science and technology fields.
- Compelling, inspiring and clear video. You instantly understand what Debbie is doing, why, and what the product is.
- Her passion shines through! You can feel it, and you can see it in the research she’s conducted on this topic with her own time and energy.
- She talks directly about your children. She connects to you in the video and tells you there is more to your little girl than just princesses and dress-up.
- She clearly explains her situation with her finances, and she tells you that she is instantly going to go into action as soon as she has the funds.
- She clearly presents a need in the market, as well as of the next generation.
This platform works in a similar way to Kickstarter, but you don’t need a video for your campaign, and campaigns are usually based around art projects or individual efforts like publishing a book.
Example Project: Let’s Build a Goddamn Tesla Museum
There’s nothing the general public likes more than to see someone bring something big into this world. Humor and fun go along way, too, especially when it comes to attracting the minds and hearts of people who don’t know you from a bar of soap.
That’s probably why this project was overfunded by almost $600,000 and people were prepared to invest even while knowing the results wouldn’t be immediate.
The Outcome: $1,370,461 raised for an $850,000 goal.
Why It Worked:
- Eye-catching title that promotes urgency and passion and makes you want to help them bring the project to life.
- Humor and conversational tone in the copy. (I.e., “$3: Tesla loves the number 3. And if you donate $3, Tesla will love you too. If he were alive today he’d totally high-five you and compliment your haircut and/or mustache.”)
- Even if you didn’t previously know who Tesla is, the copy on the page is conversational, light and easy-to-understand.
- Honesty. They say outright that the amount they’re asking for is not going to cover all of the expenses for the museum, but it will secure the land.
Instead of using the crowd only for finances, Rock The Post enables you to use them for advice, time and resources, too. Now, that’s pretty unique, not to mention valuable. When you’re starting a new venture, mentors and advisors are often far more valuable than money.
Example Project: Abracadabrapp
This campaign was designed to fund the first Moleskine notebook and analog app for the iPhone. When you put apps for Apple products together with one of the most popular physical products of all time (Moleskines have a cult-like following), you are onto a good thing! Their great video helped, too:
The Outcome: $3,174 raised for a $2,800 goal.
Why It Worked:
- Great graphics and visuals in the campaign video really sell you on the app, and you get to actually see how cool it is.
- Easy-to-follow video looks fun and realistic. You can see yourself in the same position as the people trying the product for the first time.
- The success story at the beginning of the video shows the fundraisers are reputable.
WeSparkt is a crowdfunding platform focused on funding social entrepreneurship ventures. And as Brazen has explored before, entrepreneurship is better with a social mission.
RocketHub offers a platform for crowdfunding and also gives people the chance to work with leading experts in the field through a voting process.
Lucky Ant reminds people to look in their own backyards when it comes to crowdfunding. Each week, they connect you to a business in your neighborhood, and if you fund the projects, you can access rewards.
GoFundMe is a classic online fundraising tools that’s purely about donation and can be used to raise funds for any type of project, from opening up a new coffee shop to starting a nonprofit to planning a community event.
Ensuring Your Success
By now, you should have a good understanding of what makes a crowdfunding campaign successful.
People need to believe and be inspired to want to fund your dreams. You have to be creative, to know your “why” and to take people behind the scenes so they can really understand and connect with your vision. For more tips, check out How To Use Crowdfunding To Make Your Dreams Come True, which includes more case studies and breaks down the critical factors for creating a compelling campaign.
Once you’ve done your research on the best platform for your particular project, take action and make it happen! Set a date for starting your campaign and work backwards from there to make your dreams a reality.
Natalie Sisson is a Suitcase Entrepreneur and adventurer who’s on a mission to enable others to create freedom in business and adventure in life. She breaks down how to build an online business you love from anywhere, using online tools, social media and outsourcing so you can live life on your own terms.
Brazen Life is a lifestyle and career blog for ambitious young professionals. Hosted by Brazen Careerist, we offer edgy and fun ideas for navigating the changing world of work. Be Brazen!