Thursday, June 26, 2014
Crowdfunding Strategy -- Break it Down into a Series of Communities and Campaigns
I talk to entrepreneurs all day about raising funding. I notice that when I ask how much they are raising they give me their ultimate raise figure. It's the amount they plan to raise over the entire life of the company. And then they grow frustrated because it seems like an insurmountable number. That's because they are thinking they have to raise it all at once. In fact, it's best to break the raise down into multiple campaigns.
With the emergence of crowdfunding there are now more tools to use for raising funding. These tools include donations, rewards, equity, and more. Each tool takes a different approach to raising funding and leveraging a different community. The donations portion focuses on family and friends who will just give you funding to help you start. The rewards focuses on customers who want the product. The equity focuses on investors who want ownership. By leveraging all three one can stair-step their way up the fund raise ladder.
Most crowdfunding campaigns run 30 to 90 days long. After that backers and investors grow tired of seeing the deal and look elsewhere. It's best to set a goal that can be accomplished in that timeframe. With money raised at each stage the entrepreneur can go work on the business and move it to the next level and then start another campaign.
If you would like to learn more about crowdfunding strategies, please contact me