Just last year, in 2016, equity raised from crowdfunding passed venture capital funding for the first time. That’s huge. The global crowdfunding industry as a whole is over $30 billion and the world bank report estimates it will reach $93 billion by 2025. With all these promising statistics and numbers, it may seem like this crowdfunding thing is a walk in the park. But don’t be fooled there are a lot of crowdfunding platforms out there with tons of campaigns being run all competing for the same investment dollars. Reaching your goal can be harder than you might think. Luckily, we’ve put together a few hacks that will help you get there.
Reach 40% of your raise.
Don’t just reach it, reach it as fast as you can. Why 40%? Well, here are a few good reasons.
- 80% success rate: Less than 1/3 of crowdfunding raises reach their eventual goal. I know, not the number you wanted to hear if you are about to attempt to raise money this way, BUT! That number rises to 80% when a campaign reaches 40% of its goal.
- Featured raise: Most crowdfunding platforms or portals, have a “hot” or featured section on their site. If you raise that 40% in the first week, you are sure to be that “hot” raise.
- Trust: This one may seem obvious, but people are less likely to participate in a crowdfund if they don’t believe it will make it to its eventual goal.
If you’re going to reach that 40%, you want to start doing the work well before you go live, here’s why.
- Time: Any crowdfund campaign, no matter what platform, has a start date and an end date and trust me, that end date is going to come faster than you think. A well run pre-launch can act as a little bit of bonus time to work out some potential kinks before going live.
- Gauge interest: Some of the equity crowdfunding platforms have a “test the waters” feature which allows you to test solicitation materials before any official filings are completed. By pre-launching your raise, you can gauge interest and engage potential investors without necessarily “Testing the waters”.
- Organic traffic: If you don’t have a website and a blog, now is the time to get one. During your pre-launch, it’s important that you start getting organic search volume, it’s important to start getting found. People are far more likely to invest in your raise if they find it on their own.
Have a plan.
If you fail to plan, you plan to fail. This can be said for all things, and a successful crowdfund is no different. Let’s get planning.
- Content calendar: It’s rarely going to be enough to just make a video, put out the materials, and let it go. You should put together a content calendar that includes your website, social media, email, and any other outreach you plan to use to make sure you keep potential investors engaged all the way through your raise.
- Pre-Launch: We just talked about how important a well run pre-launch campaign is, that being said, you want to make sure you have a full plan and content calendar for that too. It’s important to give yourself time for this pre-launch because putting out content and getting those organic searches will take time. I would give yourself at least 2 months.
- Creativity: On this content calendar, you’re going to want to make sure that all of the content you put out has the same message, but said in a different and creative way. If you keep putting out content that is too similar, people are going to begin to tune your message out.
Those are just a few hacks to get you started, but at the end of the day, what it all comes down to, is that if you want to run a successful crowdfund IPO, you’re going to have to be willing to put in the work. It’s not good enough to just set it up and let it go, it takes a lot of time and effort from the start of the pre-launch until the day the campaign ends for you to reach your goal.