by John Hawthorne
EDITOR’S NOTE: This is the second of two parts. You can read Part 1 HERE
The Major Players
When it comes to crowdfunding, Kickstarter and Indiegogo are the Google and Amazon of the industry. They have been crowdfunding mainstays the past decade producing the most consistent results. Together they have raised a combined $3 billion for their entrepreneurs.
- Summary: It wasn’t the first – that distinction goes to ArtistShare – but Kickstarter has been the most successful, raising over $2 billion since coming on-line in 2009.
- Best For: Creatives. Art. Film. Games. Music. Publishing. Kickstarter gears itself to those wanting to share what they create with the masses.
- Funding and Fees: If a campaign is unsuccessful, no money changes hands. Kickstarter keeps 5% if a campaign meets its funding goal with a processing fee up to 5%.
- Summary: Launched in 2007, Indiegogo has facilitated over $1 billion in funds across 150,000+ campaigns.
- Best For: Pretty much everyone, from general creative projects to charity and humanitarian geared groups.
- Funding and Fees: Indiegogo offers the option to keep your funding even if a goal is not met. Their fee is 5% of all funding. Processing fees are 3% plus $0.30 per transaction.
A Few More to Consider
Smaller, but no less dynamic, these sites offer a more tailored approach versus Kickstarter and Indiegogo.
- Summary: If you ever needed loose change to complete a gas station purchase, the person in line you asked was named GoFundMe.
- Best For: This is the small stakes side of crowdfunding. Born of people needing to cover personal costs, GoFundMe has evolved into a hub for locals seeking funds through a grassroots network of donations.
- Funding and Fees: Like Kickstarter, 5% of fully funded campaigns. Zero dollars if a goal isn’t met. Handling fees are up to 3%.
- Summary: Around since 2010, in the past few years RocketHub has redirected its focus as more venture capital than crowdfunding, although that component does remain.
- Best For: Startups. RocketHub is a bit more limited than Kickstarter and Indiegogo with only four main categories. A partnership with A&E affords the right pitch the potential for wider exposure.
- Funding and Fees: RocketHub takes 4% commission if a goal is reached. 8% if it’s not. They also charge a 4% credit card handling fee. You can keep funds regardless of campaign success.
- Summary: Smaller and not as well-known as some other sites, Razoo is no less powerful. Since 2006, Razoo has seen $500 million raised for a multitude of causes.
- Best For: Worthy Causes. Razoo helps connect donators with the causes they care most about. Anything from water programs in third world countries to uniforms for a local youth soccer team.
- Funding and Fees: 4% to 5% depending on fundraising type. 2.9% processing fee.
These are just a few. Research as many platforms as necessary to find one that best supports you, your idea and your funding campaign.
Know Your Audience
You’ve developed your idea and narrowed down the best place to present it. It’s time to get funded.
Crowdfunding is a social exercise. It doesn’t happen in a vacuum and to effectively score that much needed capital you must reach people willing to support you.
The best starting point is a small circle of trusted friends and acquaintances to help spread the word and tap social networks that you may be unable to access. Remember, the most effective crowdfunding is viral. But to get your idea spreading quickly, it needs a starting place. Usually your friends are that starting point. If you can get them on board with your idea, they can be your greatest evangelists.
From there, you’ll have to move beyond friends and convince strangers to give you money. To maximize that generosity, target those that will boost your project to its funding goal and beyond. This goes back to knowing your project and who should hear your story.
People who love sports are drawn to sports. People who love movies are drawn to movies. People who love cooking are drawn to avocados. You get the idea. Appeal to their interests and reward them for it. Don’t offer random rewards unrelated to your project. Offer rewards that your audience will love.
Don’t be afraid to tap into the emotions of those you are seeking to reach. It’s easy to get caught up in the excitement of selling your idea, but there is a finished project on the horizon you will want people to touch, see, taste or hear. You’ll want to as many people as possible there at the end to experience it with you.
Who are you?
No seriously, who are you? And why do you want my money? Why should I give to you?
You are not only selling your idea, you are selling yourself. It is shown over and over that people who contribute to a project are not only buying into the project or idea, they are buying into the person or persons behind it.
They are buying into you.
As important as the right idea and the right platform and the right audience are, none of those matter unless you sell yourself as the one to pull the whole thing off.
Make your pitch clear and concise. Whenever possible do a video. Offer cool rewards or milestone shares. Keep your campaign tight. Thirty to sixty days is the most effective time period for the vast majority of funding campaigns.
Whatever the message and regardless of how you deliver it, always be mindful that people funding your project or idea are really funding you.
As you can see, crowdfunding is no small feat. There is plenty to consider when ramping up your foray into crowdfunding. Not to mention living in a time of very short attention spans, makes rising above the crowd even more daunting.
Be prepared. Don’t be afraid to stand out. Understand who you are trying to reach and let them understand you. Put yourself on the platform that suits you and your ideas and goals the best.
Like anything in this world – building a house, making a movie, creating a website – if the blueprints, script or code is well conceived, on point and thoughtfully developed, the foundation laid will be incredibly strong.
Crowdfunding is no different. Build the right foundation, and your venture will easily stand tall amongst the crowd.
John Hawthorne is a health nut from Canada with a passion for travel and taking part in humanitarian efforts. This article was originally published at Floship.Com. Reprinted with the author’s permission.