South Plainfield, NJ—WholeFoods Magazine presented a Livestream video event in May featuring two experts on marketing and crowd funding: Nancy Trent, president of Trent and Company, and Samantha DelCanto, chief revenue officer at FundAnything.
During the event, they gave valuable tips and practices for running a successful crowd funding campaign. Here are some of the audience questions tackled by Trent and DelCanto during the event (video recording is viewable here).
Should I offer incentives and how do I determine how much each incentive should be worth?
Rewards are the most important part of a campaign. Providing and offering people incentives can only entice people to invest in your campaign. However, some people may not readily want to offer money. Even though campaigns are all about communities and people supporting others’ dreams and businesses, it is also transactional. What can people get out of helping your campaign? Offering something valuable might spark a person’s interest in your startup.
“When you’re thinking about rewards, you really need to think about pricing,” says DelCanto. Make sure incentives are priced right. Look at other campaigns or startups that are in your field and what they are offering. Also, keep in mind that each incentive should be simple, and not have so many options that could confuse people.
Can you speak a bit about crowdfunding for emerging non-profits?
Non-profits have been using crowdfunding for a long time, but now they have been taking it to the next level: online. Online crowdfunding can help them reach more people than ever before. This is a great opportunity for non-profits to increase their visibility and create teams to raise more money off of crowd-rise. “It will be a way for more people to actually vote with their dollar,” says Trent.
It seems that tech products make so much money in crowdfunding but other categories seem lackluster. How do you get around this?
“Throw your line in the water where the fish are,” says DelCanto. Get out there where other sites have been successful in raising money for similar products. They will provide you with a specific audience, targeting for your own product.
How important is having a video in my campaign?
Videos are very important in crowdfunding campaigns. They paint a picture of what you stand for and what you are doing. Having an actual visual will stir up interest and get people talking about it even more. You don’t have to have film experience to make a video; you can hire a videographer that has some experience in crowdfunding campaigns or even music videos. Videos help display emotion and how passionate you are for this campaign. Showing your passion and enthusiasm will get people to believe in you and ultimately believe in the product your behind.
Also, before shooting your campaign video, make sure you practice. This is very important because videos are about presenting your idea. If you can’t convey it through the camera, your audience will not understand you. “Rehearsing is really, really important,” says Trent. Practice how you would say something and make sure it makes sense in your head as well as out loud. Practice your mannerisms and body language. Be authentic, show you’re passionate and be knowledgeable. Show people why their contributions will help the world and what they’re accomplishing along side you.
One essential thing to incorporate into your video is a “call to action.” Be affirmative and tell your viewers to contribute now. Don’t be afraid to be direct.
How can I determine the exact amount of money I need?
With a startup, never guess. Before diving into anything, sit down and really price everything out. Research is very critical in the whole process. “If you have questions about how much everything is going to cost, you haven’t done enough research,” says Trent.
However, pricing can change depending on many circumstances. To be safe, it is always important to estimate on the more expensive side. Before a crowdfund, a great tip is to do a small test run before getting into everything. If you can, start with something small. This can bring you early supporters in the business, which can help raise your visibility. Also, find manufacturers that are perfect for the job. Work with manufacturers that are used to dealing with new designers or deal with smaller trials.
Can equity be offered to crowdfunders pursuing to the job act? Is this attractive to celebrities like 50 Cent and Vitamin Water?
For now, equity cannot be offered to crowdfunders, only credited investors through certain sites and startups. DelCanto thinks that crowdfunding for equity is coming: “If you demonstrate success, [it] often puts you on that road for raising equity.”
How does your advice apply to a small business that’s been around a few years and needs money for expansion and improvements?
Offer new products, which can help raise money for a period of time. Take a look at your product line now and see what’s missing and what else you can offer. Something new or different can interest people to crowdfund. For an expansion, offer a reward that people want.
What is the percentage of successful campaigns in this space?
“I don’t think there is information on that but that would be something great to study,” says Trent. Success can be measured in different ways so it depends on the situation. Even if you didn’t hit your goal but still made money, that is a success. Success is not only how much money you made, but also how much awareness you created and what you learned.
Any tips for a gluten-free bakery hit by a flood two weeks before opening. We set up a GoFundMe campaign.
Work with your community and government officials and assemble as many supporters as you can. Create offline events to help your online campaign. Consider creative ways to garner attention that can get media attention that will bring the community together and help get the word out.
Something to consider is that many of these people might not even know you, so to get started, work with people that know your business and campaign already. Use your networks. “Before you launch, you really should line up one-third of your contributions and it should be coming from people who you are already in contact with,” says DelCanto. This will eventually attract others that don’t know your campaign to see what you have generated already and then make their contributions based on the booming success.
Am I allowed to run multiple campaigns on multiple sites?
It is allowable in crowdfunding to run multiple campaigns, but it might be difficult to introduce several campaigns to your social networks and raise enough money for all of them at once. “Now you’re spreading your dollars out,” says DelCanto. Having so much going on might make your campaigns appear less of value because people might be donating to all of them but not as much as they would donate to one central campaign.
We have local media coverage in a state’s senator visiting us next week. How can I take advantage of that exposure?
Local media is a big plus and big advantage. You want to make sure the coverage will be in a local newspaper, have it on TV and talk to journalists covering the event. Spread the news about it on social networks and email. Also, reaching out to the senator’s office might be very useful and see what they can do.
Sites like Kickstarter are all or nothing. Do you think this is a risky choice?
DelCanto thinks it is risky “because if you don’t hit your goal you don’t get any of the money.” However, Kickstarter can be really good for some industries like gaming and gadgets. Think of what would make sense for you and your product.
What is the fee percentage of a crowdfunding site takes from a non-profit?
It varies because it depends on what platform you use. You can do research and see what you find and base it off of that. Also, you have to take into consideration all the different types of fees like how much money you will make and incentives.
Will someone with a crazy schedule have enough time to run a campaign?
It’s all about the motivation. If you’re motivated to get your product out there and to accomplish your goals, then you can run a campaign. Also, organization is important as are pinpointing your priorities. Crowdfunding offers the ability to work with others and if you have a team, certain responsibilities can be spread out and it takes a load off of your shoulders.
Do you know of a campaign that has been successful simply due to the viral-ocity of the product or presentation?
There have been quite a few viral campaigns like The 10-Year Hoodie or Karen the bus monitor, which raised $70,000.00. It was successful because of its initial high social media attention. Once it was taken over by standard social media, it was on many news stations and had a lot of PR.
What if you make more than your goal?
It’s great if you went over your goal. “If you are sort of hitting your goal and you’re in your first third of your campaign or midway through your campaign what you want to do is add a stretch goal,” says DelCanto. Having another goal to reach, will help continue the donating and funding. Or, if you do reach the certain amount, you can offer the extra amount of money you raise for something else great. This acts as another incentive and motivation.
Would it be prudent for me to use social media or comic creator like Bitstrips to promote my campaign?
Anything you can try and think of that could promote your campaign, you should use as an advantage. Whatever gets the word out.
Social media is not my strong point. Should I hire a freelancer to get my idea out?
Crowd funding is all about social media. You need to know how many friends you have on Facebook, how many followers on twitter and how many contacts you have. All these networks are most likely where the majority of your money is coming from. “If you don’t have a strong social following, you probably want to build that up before you start crowdfunding,” says DelCanto. To be successful in crowdfunding, you need to have a strong awareness of social media and if you need the help definitely hire someone.
Where can I network with investors, mentors and others excited about crowd funding?
LinkedIn and Meetup are good sites to find networks with crowdfunders. Also, research other people who are in the same field and see what kind of investors are investing in them. Tradeshows and webinars are great places to attend and meet these people as well.
How much is too much social media?
Social media can never be too much, but be sensitive to what people may be feeling. “I look at it as nutritive manipulation. So if you’re giving somebody something of value, you’re giving some information they value or a joke they’ll enjoy, then you’ll never go over the line,” says Trent.
Leaving us with the useful tips in crowdfunding, DelCanto offers a 4% flat fee if you start a crowdfunding on FundAnything, whether you reach your goal or not. Write to Steve@fundanything.com for more information.
Published by WholeFoods Magazine Online, 5/30/14