Raising funds for a new business venture can be a daunting task and, often, it’s what puts most people off from getting started. There are many options out there available to you; hopefully, this article will give you an insight into the route we took with our coffee subscription product.
Crowdfunding is a relatively new concept. It baffled my family and friends when I told them I was doing it in May 2020. ‘Random strangers help fund your business?! What? How?’
If you’re sitting there, puzzled, as to what crowdfunding is and how it works, keep reading. And if you know a little about this type of funding, but want to know how to increase your rate of success, hopefully, I can still help.
These are my top tips towards a successful crowdfunding story, i.e. getting your project funded.
When thinking about crowdfunding for your business, the first thing you want to consider is the platform. There are a huge number of platforms out there, from crowdfunder.co.uk in the UK, which focuses on community-based projects, to Indigogo in the US, which houses tech projects of all shapes and sizes. Do your research. Ask yourself, which platform is best suited to my project? Where is its audience based? Which one has the best reach? These considerations will help you reach your funding target. You will also need to consider what each platform charges. The fees are usually percentage-based and charged once you’ve reached your target - just bear this in mind.
Set your target
Do you need £300 to buy that food van? £3000 to create a self-cleaning chopping board? Or £30,000 to build a car that can fly? Choose a target that’s sensible in terms of what you need to fund the business or to get it to the minimum viable product (MVP) stage. For example, my partner and I fundraised for a new coffee box subscription; we asked people for approx. £20 a box. Not too expensive, but not so cheap that we wouldn’t hit our target.
Most platforms are ‘all or nothing’, meaning that if you do not hit your target you do not receive any of the funds you’ve raised. Be realistic with it, but also be sensible. You can set stretch goals later on throughout the campaign, by offering additional rewards for all your backers if a stretch target is met. Also remember that each platform boosts its most popular campaigns - this isn't just based on your fundraising progress, i.e. your percentage to target, it's also determined by how many backers you have.
Some crowdfunding platforms ask you to provide ‘rewards’, others do not. Here’s the difference. If your platform offers rewards it means that, when raising funds for your project, you can offer potential backers (the people who fund you) a host of different items in return for their cash. For example, some crowdfunding projects offer a Facebook mention for a donation of £10; others may offer a branded t-shirt for a £30 donation. Take a look at your chosen platform before forming ideas, then make sure you offer rewards that range from low to high value. We are a coffee subscription service and we pre-sold 3- and 6-month subscriptions to generate cash (make sure you’re prepared to fulfil what you offer). We also had other options, such as a RISE t-shirt, RISE mugs, and other coffee-related rewards.
Don’t start a crowdfunding project on a whim. Start your crowdfunding campaign at least 6 weeks in the future (4 weeks at a push), and plan from there. ‘Why so long?’ I hear you ask. There’s a lot of planning involved in getting your crowdfunding page up and ready. You need to create content about the product – this can involve photos, videos, quotes – as much content as you can create that tells potential backers what it is you’re planning to do and why they should support you.
You also need to carefully choose your pricing, based on similar projects that yours will compete against on your chosen crowdfunding platform, as well as what it will cost you to physically make or create your project. You will need to generate awareness through social media/newsletters/word of mouth, so that the moment you hit launch you have a following who will all back you.
This point is key…platforms will push you up their popularity rankings on their respective websites if you do well in the first 24 hours. We hit 55% of our target on day one, which gave us good visibility on the platform we chose to use. We were promoted as a popular product, which in turn got us more support - kind of like a snowball effect.
Consider how you will get your project off the ground from day one:
Social media – create a social handle and start posting. Begin to grow a following ahead of your crowdfunding launch. Think about how you can infiltrate social media groups that may be passionate about your product.
PR – do you know anyone you can contact who could promote your project? Would local newspapers be interested?
Connections – who do you know that could help promote your project far and wide?
Friends and family
Make sure you warm up your friends and family for what’s coming. When you hit ‘launch’, there’s no going back, and studies have shown that the first 24 hours is critical to success. Get all your supporters ready and standing by to back your project. That way, when members of the public come across your project, they will think, ‘Wow, they’ve already hit 10% of their target, this must be good! Let me get my credit card.’
Those are my tips for a successful campaign, which, ultimately, needs passion and hard work. If you’re passionate about getting your project off the ground, it will show in your communications, your page, your rewards. I still peruse platforms for exciting projects, and it’s pretty obvious which will get funded and which won’t. Do your research, plan effectively and go for it. You’ve got this!
Alice Wainwright, Co-founder RISE coffee box
Alice and her partner Ben successfully funded their RISE coffee box on Kickstarter in May 2020. They overachieved their target by 133% and have since established their brand and launched their website. If you like coffee, or you like the sound of them, visit www.risecoffeebox.co.uk or give them a follow @risecoffeebox
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