Whether you’re just beginning to test the waters and decide if crowdfunding is right for you,  or are ready to jump into your own rewards or equity-based campaign today, you’ll have to do your homework if you want to succeed.

There’s a lot to cover as you prepare to kick off a fundraising campaign of your own. In this short guide alone we’ve looked at crowdfunding’s history, its current landscape, the evolving rules of the game, some best-case examples, and more. It can be enough to make your head spin, especially as you juggle the day-to-day of managing your startup.

Thankfully, you’re not alone. There are a wealth of crowdfunding tools, articles, and resources, all designed to give busy entrepreneurs like you a head start with planning, launching, managing, and closing a successful campaign. In this chapter, we’ve gathered some helpful resources that you can reference and use as you gear up for a successful raise.

Crowdfunding Checklist

We’ve already looked at some of the most important pieces of your crowdfunding campaign, from things like a well-crafted pitch that tells the story of your business, to less-tangible assets like social proof and early traction. But there’s a lot more you can do to complement your pitch and reinforce your campaign. The more of these things you can include with your pitch, the greater investor confidence in your business will be:

High-quality marketing collateral – You want investors to know your startup to has   momentum and growth potential, and isn’t just a night-and-weekends project in your garage. Part of that confidence comes from seeing polished, well-produced materials like product mock-ups or photos,  a corporate identity with your logo and branding, photos of your team and location, and customer testimonials with photos.

Professional Company Video – A short video is perhaps the most effective and powerful way to tell your business’s story and sell your audience on the value of your product. This strategy works for you in two key ways: it caters to your audience’s short attention spans, and is the piece of your campaign most likely to be shared on social media. The most successful videos feature your company’s founder or core team, explain the unmet need that sparked your idea, detail your product and how it’s different than anything else out there, show (honestly) where your business is at right now, and hint at its bigger, long-term potential. In short, explain where you came from, what you need now, and how you’re going to change the world.

Here’s a great example of an effective company video from Grapevine Craft Brewery, which recently raised over $60k on Fundable:

Current Valuation – If you’re launching and equity campaign, you’ll need to determine your company’s current valuation—the proposed value of your company at the time of investment. Read more about equity valuation here or use our Fundable Company Valuation Calculator for help determining how to value your company.

Rewards
– If you’re launching a rewards-based campaign, you’ll need to carefully consider your campaign’s rewards—the incentives you offer your backers for pledging a certain dollar amount. Think carefully about your rewards tiers, always offer something at $20 or below, and be sure to encourage a larger pledge by bundling each higher tier with all the rewards that come before it. Click here to read more about how to pick compelling rewards.

Prior Funding & Use of Funds – Your rewards backers all want to know (and, in the case of your equity investors, need to know) how their investment will be used. They’ll also want to know what money you’ve already raised in previous rounds, and how you used those funds. This an area where more is almost always better. The more information you can offer your audience about how their money will be put to work to grow your business (and their ROI), the more confidence they’ll have and the more likely they’ll be to invest.

  • For Prior Funding: Be sure to explain any investment by the founding team, prior equity investments, debt, other funds raised to date, and how your company used those funds.

  • For Use of Funds: Be sure to explain, in as much detail as possible, how you will use the funds you’re currently raising, and what milestones they’ll help your business reach. For example, funding uses can include things like product development, sales and marketing, recruitment of key personnel, legal and accounting, and other operating expenses.

Email & Social Media Plan – One of the unique things about crowdfunding is its ability to centralize your fundraising efforts and put you closer than ever to your backers and investors. But for all the engagement and social momentum that can come from that, you have to have a plan for keeping everyone informed. That means knowing:

  • Whom You’ll Contact: Existing customers, committed backers and investors, or potential supporters.

  • When You’ll Do It: Before your campaign as a soft-launch, during your campaign as a funding update, or after closing as a big “thank you” to your supporters.

  • How You’ll Do it: Email, Facebook, Twitter, or via the Fundable Crowdfunding Platform.

Outside Crowdfunding Tools and Resources

There are a number of free and paid services you can use to enhance your pitch and manage your campaign. Here are a few of our favorites:

WePay – Payment processing for small businesses and the platforms that serve them.

MailChimp – Email marketing with easy-to-use templates, simple analytics, and powerful list-management.

Shutterstock, iStockphoto, Google Images, Pinterest – Free and paid imagery for your crowdfunding profile.

Pixlr – Free online image editing platform that offers much of Adobe Photoshop’s basic functionality.

ThomasNet, Alibaba – Quotes and information about manufacturers, suppliers, importers, and exporters.

Teespring – Design and sell custom t-shirts to your backers (a great low-tier reward).

Equity Valuation Tool – Calculator for determining your company’s pre and post-money valuation.

Dilution Tool – Calculator to help you understand how different funding events will affect you and your investors over time.

Rewards Pricing Tool – Calculator to help monitor expenses and determining pricing for your backer rewards.

Shipping Rates Reference – Quick reference sheet for domestic and international shipping rates.

Bitly – Unique short links with click-count reporting for tracking and analytics.

Crowdfunding Glossary

We used a lot of startup and fundraising terminology in this guide, some of which may be strange and unfamiliar to you. To help you keep them all straight, here’s a reference list of all the chapter terms found throughout this guide:

Accredited investor – Individuals with a net worth exceeding $1MM or an income exceeding $200K for the past 2 years. Currently, only accredited investors, a group comprised of some 3.4MM Americans, are legally allowed to invest in private companies in the U.S. This restriction will be lifted under Title III of the JOBS Act, opening up private investment to non-accredited investors.

Crowdfunding – A method of raising capital through the collective effort of friends, family, customers, and individual investors.

Donation-based crowdfunding – Any crowdfunding campaign in which there is no financial return to the investors or contributors.

Equity-based crowdfunding – Any crowdfunding campaign that allows contributors to become part-owners of your company by trading capital for equity shares.

General Solicitation – Publicly advertising investment from the general public through traditional and emerging channels, including email marketing, public speaking events, social media campaigning, or creating a public profile on a crowdfunding site like Fundable. The 80-year ban on general solicitation was lifted on September 23, 2013 under Title II of the JOBS Act.

JOBS Act – A bill signed into law by President Obama on April 5, 2012, aimed at encouraging startup and small business funding by easing key regulatory burdens surrounding fundraising.

Rewards-based crowdfunding – Any crowdfunding campaign that involves individuals contributing to your business in exchange for a “reward,” typically a form of the product or service your company offers.

Social proof – The phenomenon where people follow the examples of others in an attempt to reflect the best course of action in a situation. In a crowdfunding campaign, your early backers generate your social proof—once early adopters vet and buy into your idea, others are more likely to follow suit.

Soft launch – Getting the word out to your audience—friends, family, existing customers—about your upcoming crowdfunding campaign, usually at least a month before your actual launch. Using social media, email marketing, and word-of-mouth, this is an effective way to build awareness and make an initial pitch before actually asking for money.

 
COMMENTS
No comments yet.

Ready to Start Raising Capital?


GET STARTED 9

the startups.co platform

Copyright © 2016 Startups.co. All rights reserved.