In today’s complicated investment environment especially in frontier markets, crowdfunding is gradually becoming a more accessible way of raising capital. It is basically the opposite of mainstream approach to business finance. It bypasses the process of putting together your business plan, market research, prototype building and shopping your idea to a few wealthy individuals by granting you access to a wider audience and potential contributors including your friends and loved ones. In the following interview, Mr. Owen Wallis shares his thoughts about crowdfunding
What is crowdfunding?
Crowdfunding is about more than just raising funds. It’s about getting validation for your idea, creating brand awareness, growing your audience and making the most of the brilliant opportunities that arise while your project is running
Planning your project
Crowdfunding projects do not go live and get magically funded. They take a lot of hard work and preparation. I recommend spending at least a month on getting your project ready before you launch.
Research is key; find other projects that are crowdfunding for similar things or causes. Understand what they did right and apply that to your own. It’s important to research both successful and failed projects, so you can learn from those mistakes.
Building a team
Think about your strengths and weaknesses. Are there any gaps in your own skill set that need to be filled? Do you know someone who can help with the video, with promoting the project on social media? Do you know someone who is well connected in the relevant industry who could help spread the word?
Identify your crowd
The best way to start is to gather your team together and start drawing a map of your network. Who in your close family or friends list will pledge first to help build momentum? Which Facebook groups can you use to help promote your project? Which key influencers do you know on social media who could help? Who could help with corporate sponsorship?
Think about which communication tools are best for each group. For example, who do you usually reach via email, who’s best to reach by phone or on Facebook? Add these notes to your network map.
When spreading the word about your Crowdfunder, always start with the people closest to you, before engaging with others. People who already know you are more likely to support your project than those who don’t. Similarly, people who are already aware of your business are also more likely to engage than those who are not.
Creating your project
When visitors land on your project, you need make a connection quickly and get them excited about your project. To do this well you’ll need make sure your description is structured, concise and engaging. Add some images and testimonials to give it a professional-looking finish. Again looking at successful projects in your niche is a great way to learn how to structure your project.
If you are offering rewards they should be good value for money. If one of your rewards is available elsewhere, apply a discount of 20-30% as a great way of making it attractive to your crowd.
Limited rewards are a fantastic was of securing early support. Having just a small number available is a good way to get your crowd motivated. Offer authentic mementos or opportunities to leave a legacy in some way.
Have a few rewards priced at around £20 as this where a good chunk of pledges are made, and spread them evenly across different price points from £10 to £100 and include some sort of sponsorship at the top end to attract support from businesses or large organisations.
Owen Wallis is the Head of Product for HYPERLINK “http://crowdfunder.co.uk/”Crowdfunder.co.uk. He’s been at the company since it started and has helped thousands of projects raise over £40 million on the platform. Before Crowdfunder Owen managed a top 10 Digital Production company in London, before that he created interactive installations for Cadburys, CERN and the BBC, worked in Sydney Australia at an advertising agency, and worked on corporate communications for Audi and Volkswagen.