In article 1 we discussed crowdfunding as an alternative way to fund your business idea. In article 2 we looked at why more and more startups are turning to rewards based crowdfunding. In article 3 – I showed you what you must do before you even think about running a crowdfunding campaign.
In this final section, article 4 of the crowdfunding series. We will discuss rewards based crowdfunding platforms.
If you look around the internet you will notice over the last few years, there has been a growing number of crowdfunding platforms. These platforms vary depending on the type of crowdfunding you are looking for.
However,as a starting point some of the most popular rewards based crowdfunding platforms include:
But in this article we are going to focus on just three business crowdfunding platform options
So, let’s get started
- Kickstarter Crowdfunding Platform
Kickstarter has been around the longest
The platform is very simple to use and I like the fact that what you see is what you get.
They have a strict raise all funds or no one gets paid policy
If a project does not reach its funding goals, creators will not be expected to complete their projects without the necessary funds to do so and the investors will not be charged.
Investors pledge to invest and they set up an online account in which their payment details are stored, only when the full amount is reached will their payment be processed.
2. Indiegogo Crowdfunding Platform
This funding platform is on a completely different level.
To me it shouts expensive, hidden fees and costs
Just tread carefully, make sure you read everything first.
Unlike with Kickstarter
Indiegogo is the only crowdfunding platform where you have the option to keep all your funds even when your campaign does not reach its goal.
However, remember you must still be able to fulfil your agreed rewards with your investors.
If you are a new business with just an idea this is a very high risk strategy. If you have no other funds to support the launch of your new business…
Another thing to point out is that you can opt for the fixed funding campaign. This option allows you not to proceed if the funding amount sought is not reached.
A slight difference here is that Indiegogo unlike Kickstarter take funds from investors at the pledge stage. This then results in refunds if the total funding for project is not met!
I think it’s important to point out that, if something does go wrong and funds are no secured it could result in bad PR for your brand.. so just beware.
Just remember that Kickstarter do not take any funds from investors until and only if funding targets are reached.
Indiegogo transaction fees with Stripe are also more expensive than kickstarter so check it out
3. DIY Crowdfunding Platform
Yes, you can even do it yourself
Remember what you have already learnt, rewards-based crowdfunding is unregulated.
Anyone can give money without any restrictions
Lets just take a step back!
I want to ask you a question
What do you think Crowdfunding websites do?
Before I answer
I just want to say that crowdfunding sites like Kickstarter and Indiegogo deserve lots of credit for broadcasting and marketing crowdfunding.
They have in fact made it OK for everyday people just like me and you to order products from someone with a prototype.
But think about it
What does Kickstarter or Indiegogo or any other crowdfunding sites do in return for their 5-10% fee!
- Website development
- Some legitimacy
- But little else
I don’t know how much you know about my story, but for the last year I have spent my time changing the way I do business.
In the past I spent my time working 1-1 with clients face to face as a traditional consultant.
Today, the worldwide web has made it possible for me to work with 1-many, by sharing my knowledge through a range of online platforms which I will share with you another day.
The point I am trying to make is that this new journey has led me to develop a whole bunch of new skills that I never had before…
And before you start I know that this will not be for everyone, but through what I have learned if I was looking to raise funds through crowdfunding I would consider the DIY route.
Today, as popularity of crowdfunding has risen, there are plenty of free or low-cost crowdfunding template pages available on WordPress.
In the early stages I understand that funds can be limited or non-existent.
I also know that building a new brand and attracting customers is also tough.
So why not do both tasks at the same time!
Choosing the right crowdfunding platform takes time and you need to speak to as many people who have already been successful.
Find out what they would do differently if they had their chance again.
I cannot stress how important it is to allocate the amount of time prior to launch for all the groundworks.
Remember, you would not start building a house without first digging down and putting in the best foundations you could afford…
So, I now hope you are now thinking about the platform, starting to identify which one will be the best for you and your campaign…
Furthermore, while you are doing that lets just have a quick recap. After reading articles 1,2 and 3 of this crowdfunding series.
- As part of the pre-launch stage you should have completed your business plan which will include the executive summary. The executive summary will form the copy for your crowdfunding campaign page.
- You should have planned, designed and produced a promotional video.
- Developed a pre and post marketing strategy
- Formulated a list of influences you could contact who may be able to help you. This could be a blogger, podcaster, youtuber that’s related to the niche you want to go after.
Now thats all complete! You are ready to make contact with your chosen community!
- You may decide to write a blog post
- Interview someone on your website
- Start your own podcast
Whichever you chose, now is the time to start building connections. Make sure any connections you make will be able to help you with your fundraising campaign.
One thing you may want to consider, is checking out investors of similar products or services in your niche. If they have already invested they may also be interested in your business! Start building relationships now with these business owners.
You may want to check out this great article by Nat Ellason from Sumo
One last thing! make sure you do not lose control
We have already identified in article 3, crowdfunding platforms do not offer protection by way of your idea. However, what we did not discuss was how you could also lose control of your idea!
What I hear you ask!
Yes, it is possible
I want you to image that someone posts a suggestion or an idea on the comments section of your platform. Later after reading the idea, you think it could really improve the quality of your product. After careful thought you decide to incorporate/ adopt the suggestion.
Years later your product goes on to become an international household name. (Well done) However, on some platforms it is not entirely clear who owns the rights to any comments submitted.
Therefore, it is possible that if you use someone’s suggestion they could have a legal claim for a share of your success. This person could consider themselves as a third-party co-inventor and therefore entitled to joint ownership of your patent rights.
Important : You need to follow these rules when you launch your campaign
- Keep in touch with your investors
- Think about sharing a live stream video of your excitement as you move through the stages of the campaign.
- If things hit some bumps in the road, share the problems and proposed solutions with your investors.
- Provide regular project updates
- Until Mission accomplished you have reached your goal
I hope you have found this crowdfunding series useful. Stay tuned for more updates.