Crowdfunding holds great potential for startup funding. However, since equity crowdfunding is not legal in India, this post is aimed to explore donation- and rewards-based crowdfunding.
I am really excited for equity funding being legalised in India. Which I believe will become a reality soon. Yes, I am an optimist.
Image : shutterstock
I had launched my first campaign in the year 2014 to raise funds for my non-profit. My initial idea about online crowdfunding was "I will launch the campaign, and people will start contributing." Simple.
Ten days from the launch it was still on ZERO. I started analysing and reading about different successful campaigns, started implementing whatever I learnt and ended up raising approximately Rs 37,000. Although it was less than even half of our goal of Rs 1 lakh, it made me believe crowdfunding works. I kept learning more, and at the same time I started suggesting crowdfunding to people looking to raise funds and even guiding them for their campaign. I love the idea of crowdfunding.
It is a fact that only few campaigns reach their goals and that makes crowdfunding appear really difficult.
Between 11 and 31 percent of projects depending on different platforms reach their targets, according to a report from London-based market research firm The Crowdfunding Centre that analyzed data for 2015 campaigns from five of the largest US-, UK-, and Canada-based crowdfunding platforms.
But that is not really true. Crowdfunding is not that difficult. It just requires proper planning, determined effort, discipline, and a proper flow to successfully crowdfund. Although every campaign needs a different strategy, there are some things which are common.
Get a clear answer for What is the problem or issue you are addressing and who are the people who you think would be able to connect with your cause or project?
Set a clear funding goal for your project. Break your goals into small contributions and make a calculation for number of backers you are looking for each contribution level.
Describe your potential contributor archetype. The more clarity you have over this the greater the chances you will succeed.
You must target to have 30 percent of your goal amount confirmed even before the campaign goes live. This could be from your personal network, friends, family, if you are an organisation then your stakeholders.
Strangers are most likely to contribute to campaigns which have higher chances to reach the goal. No one likes to read or contribute to a campaign sitting on zero.
Use social media to target your potential contributor. This could be specific small social networking sites or Facebook groups, etc. Wherever you think you will find them.
Make a list of all potential influencers. These are celebrities who you think are associated with your cause and may retweet about you campaign.
Collect as many emails as you can of the people including journalists, bloggers and start sharing your story.
Crowdfunding is a lot about story telling. If your story is interesting and convincing, it will get shared and definitely have higher chances of success.
Once you campaign is live you need to make people who have shown interest to make actual contribution.
Regularly update your email list about the progress of the campaign. Also thank contributors publicly on social media. Make them your promoters. Get them to share it among their network.
If you make efforts and have the right strategy, there are huge chances that you will reach your goal or end up raising something significant. Be grateful to all the people who have contributed.
Being grateful to your contributors genuinely, making all efforts to make them feel good is the single most important thing you can do for everyone who has believed in you and your cause. Always try to bond with your contributors to form a strong healthy relationship. This is the best reward for them.
I wish to help more people to fund their dreams using this wonderful concept and democratic way of funding. There are lot factors that are entirely depend on the project. Although here is no one-size-fits-all solution or sure shot mantra to succeed at crowdfunding, it is also not difficult with millions being raised by people applying the right strategies and committed effort to run a campaign.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)