How to start a crowdfunding campaign
Crowdfunding or crowdsourcing is a funding concept that has become increasingly popular for small businesses over the past decade. Leveraging the internet, social media and online marketing, crowdfunding entices key demographics to back the development of a product with tiered rewards for being patrons and early adopters.
There are a two different ways to crowdfund;
– Regular crowdfunding
– Equity crowdfunding
Equity crowdfunding allows small businesses to sell stakes in their company to investors. Equity crowdfunding only became legal in Australia in early 2017 due to amendments to the Corporations Act. A little later in this guide, we’ll look at how websites like the Australian Investment Network can help you with crowdfunding your mobile app through equity.
With regular crowdfunding, you don’t have to give over a stake to your investors. Rather, your investors are backing your proposed mobile app because they:
– Love the idea and think it’s worthwhile
– Want to be among the first to receive and use it
– Believe in your story
– Want to receive additional rewards
Crowdfunding is popular online as it breaks down many of the traditional market barriers, and offers both the concept of a good deal and the rush of being an early adopter. Most importantly, it’s a terrific way to fund the development and distribution of a mobile app.
Kickstarter is probably the most well known crowdfunding platform. Beginning in 2009, the platform blazed a trail for leveraging the internet to make dreams, ideas and innovations come true. Since then, many other platforms have emerged, often specialising in specific types of crowdfunding.
In the Australian crowdfunding industry, ReadyFundGo has emerged as a successful platform for both new and existing businesses, funding campaigns in everything from Agtech and art to research, social enterprise and technology.
Tips for running a successful crowdfunding campaign
Critical to the success of your crowdfunding campaign is the capacity to market your idea. Campaigns typically take place over a short window of a two to six weeks, so a lot of preparation needs to go into the process prior to launch. Here are a few tips to get you started:
Know your target audience and join any communities they have, including anything from community forums, Facebook groups and LinkedIn groups. You’ll also want to look at Twitter and Instagram hashtags to see current conversational trends. This will also give you insight into key influencers within the community. Those open to building relationships with your brand can help springboard your campaign and bring more traffic to your funding site.
Keep your list updated
Your global list of contacts is your one true source of authority for your campaign. Whether it’s drawing on personal contacts, influencers, suppliers and potential backers. You’ll want to try and divide this global list into the following categories:
– Media list
Contacts can fit into multiple categories, but you want to make sure you’re sending the right information and collateral to the right groups of people.
Promote content across multiple channels
Chances are your target audience is interacting across many channels. When promoting your mobile app campaign, try to keep a consistent message across everything from Facebook to Youtube. Guest posts on relevant blogs and websites is a great way to build buzz around your campaign. Similarly, experimenting with advertising through media and other outlets can also build results.
Designing your app with crowdfunding in mind
If crowdfunding is the way you want to go with developing your mobile app, it helps to actually design elements of your app concept with the platform in mind. Consider the following:
Crowdfunding websites are, unsurprisingly, crowded places. First impressions matter, so the name, design and collateral of your app should work towards grabbing people’s attention.
Make rewards count:
One of the most crucial elements of your crowdfunding campaign is to ensure rewards for backing your
app campaign are worthwhile. This goes for individual backers and for milestone rewards (if we reach target X, we’ll reward everyone with Y). Most crowdfunding sites also have some rules about what types of rewards can be issued, so make sure you’re familiar with them before committing to a campaign.
Transparency is essential
Crowdfunding breaks down a lot of the traditional market barriers in the sales funnel. While traditional crowdfunders don’t actually own any of your business, there is a certain intimacy and sense of community that comes with being a ‘backer’ or ‘early adopter’.
It’s great for developing brand loyalty, but it also demands you remain transparent in the concept, development phase and delivery of your app. Patrons like to know how you’re spending the money, where it’s going, and how it will benefit them. Go into detail, build trust, and be honest. The rewards are worth the extra effort.
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