By Angela Baker
Whether you already have a registered startup or organization of your own, or are looking for funding in terms of starting your own business project, crowdfunding can be a prospective method for financing innovative ideas. According to Startups, the average success rate of crowdfunding campaigns is 50%, with business and entrepreneurship ideas raising the majority of funding compared to other niches on the market with 41.4%.
However, finding the right platform and approach to present your innovative project to the public isn’t as straightforward as it seems. With that in mind, let’s dive into what makes crowdfunding such a viable source of financial aid and how you can kick-start your own campaign without any difficulties along the way.
Let’s take a look at what crowdfunding actually stands for before we dive deeper into what makes this method of financing innovation projects so intriguing. Crowdfunding is a process which involves raising funds for a project through public donations and backers. It revolves around your presentation of your ideas, what the final product can do for the consumer, as well as the viability of its creation through funds.
Coupled with a written pitch, crowdfunding will more than likely help you finance your project easier than if you went through sponsorships and B2B investors. It is a social, public process which involves the final user of your product or service in a personalized manner, unlike any other form of advertisement or pre-launch hype buildup.
1. Define your End-Product
The first order of business in terms of creating a prospective crowdfunding campaign which people will back financially is to define your end-product as best as you can. What is it that you are trying to accomplish? Do you intend to launch an experimental and disruptive new product on the market? Do you aim to launch a new cloud-based service and offer backers exclusive features as a reward for their financial aid? How much money do you need exactly, and how will that money be spent in your development?
Your end-product is the first piece of information potential backers will come across when looking for projects to back through crowdfunding. Make sure to write short, descriptive and informative briefs on your innovative projects before you go public. The easier it is for people to understand your product or service, the better your odds will be at reaching the financial goals you’ve set for the project early on.
2. Create a Development Timeline
In addition to your project brief, potential backers will want to know more about your development cycle and how you intend to go from inception to conclusion of your idea.
Break down your development into segments, with clearly defined milestones, deadlines and a timeline of delivery. This will assure potential financiers of your legitimacy and professional intentions in terms of the crowdfunding campaign. The more information you provide the public with, the more likely you are to receive the funds you need.
3. Present Demos & Data
Likewise, potential backers might want some form of multimedia content as a means to visualize your ideas before pledging financial aid to your project.
This is especially important if your project revolves around digital goods and services which require multimedia content as part of their development cycle. This type of crowdfunding content will paint a positive picture in regards to your brand and help you earn the trust of future and existing backers more easily.
4. Provide Timely Updates
Once you start receiving financial support, you should keep the campaign updated at all times. It’s unwise to simply create a crowdfunding campaign and not provide it with progress information or anything in regards to internal developments behind the scene.
Provide your followers with timely updates on your current progress, financial stretch goals and other developments in regards to the project. This type of forward-thinking project updates will provide backers with further insurance of your legitimacy and commitment to the project.
5. Follow up on Promises
Lastly, the best way to ensure your brand’s longevity and positive PR is to follow through on your initial crowdfunding project promises. It’s important to gauge your promises according to available resources and the skill of your development team without stretching the definition of your end-product.
Failing to deliver promised goods or services can have dire consequences for your business both in terms of reputation and legal worries. Maintain your professional integrity by delivering a one-for-one project from your initial crowdfunding brief and you can rest assured that the public will be even more receptive to your future campaigns as a direct result.
Crowdfunding may seem like a risky prospect with its pros and cons to businesses and individuals without pre-existing PR or public recognition. However, an inspiring and innovative project will always find its backers on the right platform. Outline your project in detail and develop a realistic timeline for its delivery before looking for backers. Before you know it, the right crowd will flock around it and help make your innovation project a reality.
Angela Baker is a self-driven specialist who is currently working as a freelance writer at TrustMyPaper writing services and is trying to improve herself and her blogging career. She is always seeking to discover new ways for personal and professional growth and is convinced that it’s always important to broaden horizons. That’s why Angela develops and improves her skills throughout the writing process to help to inspire people. Also, she writes for LiveInspiredMagazine, rounding out her professional writing career.