Crowdfunding has emerged as a tool for entrepreneurs and startups seeking to raise capital for their innovative ideas and projects. It can allow them to connect directly with potential investors and backers, build a community of loyal supporters, and validate their product or service in the market. Successful crowdfunding campaigns can help catapult a business to new heights. In this blog post, we will explore some key elements of a successful crowdfunding campaign, drawing insights from real-life examples.
How to Optimize a Campaign
Clearly Explain Your Product or Service
One of the foundational pillars of a successful crowdfunding campaign can be a clear and concise explanation of your product or service. Your campaign page should leave no room for ambiguity or confusion. It may be essential to communicate the unique selling points of your offering and demonstrate how it addresses a specific problem or fulfills a need in the market.
One example of this approach is Revolut, the fintech company that launched a crowdfunding campaign in 2016. They effectively conveyed their innovative banking services, highlighting how they were disrupting personal finance. This approach resonated with investors and potential users, helping lead to a successful campaign that raised £1m in just a few days[1].
ChessUp, despite being one of the most funded chess campaigns on Kickstarter, did not have a campaign video. However, they managed to overcome this challenge with a detailed page description and an attractive presentation of their product’s features[2].
Source: https://www.kickstarter.com/projects/bryghtlabs/chessup-level-up-your-chess-game
When creating your campaign page, consider using visuals and multimedia to complement your written descriptions. High-quality images, videos, and graphics can help enhance the understanding of your product or service and make it more appealing to potential backers.
Provide Detailed Statistics About Your Market and Company Growth
Investors and backers want to see hard data and evidence of your product’s potential for growth. Providing detailed statistics about your market, industry trends, and company growth can help instill confidence in your campaign and its prospects. Conduct thorough market research and present the findings in a clear and digestible format.
Sentien Audio’s crowdfunding campaign is an example of incorporating data to support their venture. Their well-crafted campaign video not only showcased the product features but also introduced the team behind the project[3].
Source: https://www.kickstarter.com/projects/sentien/sentien-audio
Numbers and growth metrics can provide legitimacy to your project and build trust among investors, helping to optimize the campaign.
Investors Want to Know Your Story
Storytelling can be a potent tool in crowdfunding campaigns. Your personal journey, the inspiration behind your project, and the challenges you’ve overcome can captivate potential backers on an emotional level. It may help humanize your brand and create a connection with your audience.
Retio, a company that crowdfunded a retro product, effectively used storytelling to engage with their audience. They shared the manufacturing process through graphics and images, allowing backers to feel like they were part of the journey[4].
Source: https://www.kickstarter.com/projects/retio/retio-the-moment-never-ends
When crafting your story, be authentic and transparent. Share both the successes and setbacks you’ve experienced, as this can create empathy and foster a sense of community around your campaign.
Pitch Videos Can Be Important
Pitch videos can play a pivotal role in the success of a crowdfunding campaign. They provide an opportunity to showcase your product or service in action, present your team, and express the passion and dedication you have for your project.
While a pitch video can boost your campaign’s success, remember that you may want it professionally produced to help effectively convey your message within a few minutes. Keep it engaging and informative, and let your passion for your project shine through.
Take Advantage of General Solicitation
Unlike some other forms of raising capital, equity crowdfunding can allow general solicitation to occur. General solicitation is publicly advertising that your startup is raising capital. This extends from websites, social media, and videos to direct outreach and emails. It is important to note for startups raising through crowdfunding, there are specific advertising rules including, a company cannot advertise the specific terms of the offering (how much they’re raising, price per share, investment vehicle used) except when directly linking to the intermediary’s website (the crowdfunding platform’s website).
General solicitation can help startups get the word out that they are raising capital through crowdfunding and attract the interest of potential investors, or even future customers of their product. Startups may want to take advantage of these methods to advertise and get the word out about their capital raise. To learn more about general solicitation, check out our recent blog, What is General Solicitation?
Final Thoughts
Crowdfunding has helped revolutionize the way startups and entrepreneurs raise capital and validate their ideas. To launch a successful campaign, it can be crucial to clearly explain your product or service, provide data to support your claims, share your inspiring story, and utilize pitch videos effectively.
Are you looking to raise money through crowdfunding? Apply today to raise money with MicroVentures!
[1] https://dacxichain.com/blogs/equity-crowdfunding-power-revolut-journey-success-dacxi-chain-perspective/
[2] https://www.forbes.com/sites/theyec/2021/08/18/five-successful-crowdfunding-campaigns-and-what-you-can-learn-from-them-from-them/?sh=691e0d64f234
[3] https://www.forbes.com/sites/theyec/2021/08/18/five-successful-crowdfunding-campaigns-and-what-you-can-learn-from-them-from-them/?sh=691e0d64f234
[4] https://www.forbes.com/sites/theyec/2021/08/18/five-successful-crowdfunding-campaigns-and-what-you-can-learn-from-them-from-them/?sh=691e0d64f234
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The information presented here is for general informational purposes only and is not intended to be, nor should it be construed or used as, comprehensive offering documentation for any security, investment, tax or legal advice, a recommendation, or an offer to sell, or a solicitation of an offer to buy, an interest, directly or indirectly, in any company. Investing in both early-stage and later-stage companies carries a high degree of risk. A loss of an investor’s entire investment is possible, and no profit may be realized. Investors should be aware that these types of investments are illiquid and should anticipate holding until an exit occurs.
