Crowdfunding: How to set up a campaign (from my personal experience)

Setting up a crowdfunding campaign

(from my personal experience)

By Craig Thomler@ BarCamp Canberra 15/3/14

What is crowdfunding and why use it?

Getting lots of people to each contribute a small amount of money to meet a large expensive goal

It’s not new - • charities essentially crowdfund • And so do governments (taxation)

Why use crowdfunding?

To raise money and build support for…• creating a work of art• developing news stories• funding an FOI request• creating a product or service... • and more!

But WHY?• It is a way to raise money that doesn’t ‘cost’ equity or

require hard to get loans

The language of crowdfunding

• Campaign / project – what is being crowdfunded• Goal – the target amount of money to raise• Back – the act of supporting a project with

money (contributors are often called backers)• Pledge / contribution – the money a contributor

promises to give to a project• Reward – what the contributor gets for their

pledge (Reward Tier – a set of rewards)

What can contributors get?

• Involved in creating something new• An actual product or service• Exclusive access to limited edition material• Right a wrong / fill a gap• A good feeling helping someone

Some examples of crowdfunding

Some examples of crowdfunding

Some examples of crowdfunding

My experience…

Developed into this…

Choosing a crowdfunding platform

• Many are out there

Australian:

Consult people who’ve been there!

• People can be generous in sharing their experience…

• Thanks Andrew (LifX), Josh (Motion Synth), Saskia (KidsGoMobile), Kate (Moore’s Cloud) & Rob (BuildAR)

Supports your jurisdiction

• Local currency• Meets local legal requirements• Understands the country’s culture

What type of product / service?

Choose crowdfunding platforms which have large communities & support for your type of product/service• Artwork• Movie• Game• Product• Service

How do you want to raise money?

• All or nothing (must meet a goal amount)• Take what you can get (can take whatever is

contributed)

• Capped (project closes at set amount)• Uncapped (as much money as you can get)

Reasonable cost for cash

• Many crowdfunding platforms take a % of the money raised to cover their costs (and profit)

• A few have a set cost (depending on your raising amount)

• A few have no charges (usually for not-for-profit projects)

• FINANCIAL PROVIDERS WILL CHARGE YOU TOO! (Paypal, banks, credit card providers, etc)

My choice:

Legal entity

• Personal – Personal tax implicationsRequires personal bank account

• Company – Costs $$ to set up and operateEasier to register domains & protect

product namesMore paperwork

I chose company – cost me $570 to set up online:(Social Media Planner Pty Ltd)

Prepare your ‘offer’

• Need to write your offer – what are you creating and why should people back it.

• Needs to be clear, punchy and engaging.• Images a BIG plus

Develop rewards

• What amounts do you want people to contribute?

• Need to know your costs well (DO YOUR RESEARCH!!!)

• Remember currency conversion & fulfilment costs (postage, storage, etc)

• Include a contingency for cost overruns

Rewards should follow psychology

• Entry level ‘tasters’ for people who wish to get involved but not commit

• Cheap early bird ‘teasers’ to get money in fast & encourage more backers to get on board

• Mid-level ‘stayers’ for people who support what you’re doing / want the product

• High level ‘bonuses’ for those who want special treatment

BUT NOT TOO MANY!• There’s no set maximum (or minimum) number, but can

be hard to manage 20+ tiers

• Also people may be confused by too much choice

Veronica Mars movie had 32 reward tiers & raised $5.7m, LifX had 7 and raised $1.3m (then closed it).

• Consider ‘stretch’ goals and extra reward tiers if initial tiers get full & you want to raise more cash (games commonly use stretch goals – extra content and features)

Choose your fund raising time period

• Usually 30 or 60 days (depends on platform)

• How long do you want to let it run / drag out the agony?

• There’s normally an option to close early if goal is reached (as LifX did).

Develop a video!

• On Kickstarter only 30% of projects without a video get fully funded, vs 50% with a video.

• Ergo videos almost double your chance of funding.

Here’s mine…

https://www.youtube.com/watch?v=1RlqCtG8PcA

Submit & pray• Some crowdfunding sites don’t review projects – which

probably means lots of low quality projects….

• The ones that review can take days or weeks to approve them.

• Kickstarter: Up to 3 days EXCEPT Tech & Products, which can take a week or more (one person I know had it take three weeks!)

• Approval isn’t automatic – may be asked for more info, to make changes or simply be rejected.

My experience…

Build your community

• Identify super influencers• Prepare emails/tweets/posts• Engage friends & colleagues• Consider a PR professional• Prepare media releases & blog updates

• Getting backers early = more likely success

Launch and hope!

Follow up actively!

• Tell people you’ve launched• Ask people to share when they back it• Update backers regularly

Just don’t overwhelm the Interwebs with messages about your project!

Please tell people you know about my Kickstarter & back it if you can

Thanks!

Kickstarter: kickstarter.com/projects/socialmediaplanner/social-media-planner

Web: socialmediaplanner.com.auFacebook: facebook.com/SocMedPlannerTwitter: @socmedplannerYouTube: youtube.com/user/SocMedPlanner Flickr: flickr.com/photos/socmedplanner/ Hashtags: #socmedplanner or #socialmediaplanner