how to crowdfund your venture?
Crowdfunding is not just a very viable way of raising funds; it also enables backers to plunge wholeheartedly into the campaign. All you need to do is get a working PayPal account by any means possible and follow it up with innovative means of drawing eyeballs to your project.
Crowdfunding has witnessed an exponential growth in recent times. According to Dr. Peter H. Diamandis, CEO and founder of X Prize Foundation, crowdfunding sites generated around $2.8 billion in 2013, a figure that is slated to soar to $15 billion by 2015. In many ways, crowdfunding has become a substitute for traditional bank loans and government grants.
Over the years, a number of Nepali entrepreneurs, promoters and artists have employed this method to establish their ventures. In 2012, Sattya Media used Kickstarter to collect funds for their Hariyo Chowk project. A year later, Sneha Shrestha, a young artist, started raising funds to construct the Nepal Children’s Art Museum. Earlier, producer/director Deepak Rauniyar crowdfunded his film, Highway, the first time any Nepali creative project had done so. On the entrepreneurial side of things, Galli Galli, an online resource that makes navigating Kathmandu (among other services) easier, used donations to start and sustain their operation for the first four months. A global example of the power of crowdfunding would be the Pebble smart watch. From April to May 2012, Pebble’s campaign raised more than $10 million through almost 69,000 backers.
The biggest benefit of crowdfunding is that capital can be raised without having to give up objectivity. It is also the perfect marketing tool, making people aware of the campaign since its initiation. With that early awareness comes long-term supporters and, with it, a personal connection. “We wanted the awareness and support of as many people as possible,” says Shrestha, on why she chose to crowd-fund the museum.
If your ideas haven’t materialized due to a lack of finances, crowdfunding is the way to go.
Set up a PayPal account
For Nepali entrepreneurs, the first step towards crowdfunding is also the most challenging. Crowdfunding websites require a PayPal account to be linked with the campaign. Since it’s virtually impossible to set one up through Nepali banks (Nepal Rastra Bank doesn’t allow citizens to apply for international credit/debit cards without a foreign visa), the only option is to ask someone abroad, or even India, for assistance.
Organize your team
Running a campaign is hard work so it’s essential to have a good crew. Remember that teams with two or more members are known to generate more funds that those with a single person. Crowdfunding is all about utilizing available resources, so make use of people who specialize in certain areas – social media, for instance.
Choose the right website
There are a number of websites catering to various needs. Although Kickstarter is arguably the most popular of the lot, Indiegogo has more internationally based projects, one of the reasons why Shrestha settled for the site.
Once that’s taken care of…
Create your pitch
Clients are more liable to buy a product or support a campaign after viewing a brief demo. Make your pitch video short, professional, visually interesting, to the point and compelling. Keep it as personal as possible but also try to see things from the point-of-view of your audience. Offer incentives and put the idea forward in a way that will make them want to support you. And don’t forget to appear well-groomed for the part!
Establish perks or rewards
“Add perks for people who fund the idea. One has to be very creative when it comes to this,” says Sirish Dali, who raised funds for Space Cake Break, a band signed to his indie label – King 10 Records. Perks depend on the type of campaign. King 10 offered free shirts, stickers, signed copies of Space Cake Break’s EP and free tickets to their shows, depending on the amount pledged.
Set your goals
Websites usually have two types of funding: Flexible and Fixed. In the former, you get to keep your contributions whether your goal has been reached or not. Fixed Funding, on the other hand, allows you to retain funds only if the target has been achieved. Make sure to understand the benefits of both because this cannot be changed later. Shrestha chose the Flexible Funding method and was able to raise $5795 ($9200 was the target). Kickstarter offers only Fixed Funding while Indiegogo provides both. A third newer type also exists: Subscription. As the name suggests, backers can subscribe to a campaign for a monthly fee while receiving additional benefits in exchange. Pozible, the largest crowdfunding platform in the Asia-Pacific region, supports this type of funding.
Decide on your campaign’s duration
Forty-day long campaigns are said to be the most successful, as claimed by Indiegogo. While longer ones may appear to raise more money, be aware that maintaining a fundraising momentum is difficult.
Build a buzz
Start out by letting your inner network know about the campaign. To gain instant traction, encourage them to contribute as soon as it goes live. “We mostly advertised our campaign to friends and made $600 which was enough for the production and launch costs,” says Dali. Make sure to use social media (Facebook, Twitter, Instagram, YouTube, blogs) to full effect and prepare to get the word out through various sources. Blogs and groups with a large audience who may be interested in your story will be of great use. Listen to your early contributors and inner network to get feedback on what should be changed or replaced. Keep updating; treat the campaign like a blog. Be transparent. You’ll be surprised at how patient people can be as long as they know what’s going on.
Kickstarter – Probably the biggest crowdfunding website, Kickstarter accepts all kinds of creative projects. It, however, does not take on causes or awareness campaigns, charity and scholarships. Unfortunately, launching a campaign outside the US, UK, Canada, Australia and New Zealand is very difficult. Campaigns outside these five countries can be submitted only if a team member has a residency in any one of them. Kickstarter is all or nothing, providing only Fixed Funding. If you fall short of the funding goal, you do not get to keep any part of the pledged amount.
Indiegogo – Unlike Kickstarter, Indiegogo allows crowdfunding of anything – trips, charities, projects to personal wishes. Restrictions aren’t placed on project creators either, which means anyone with an idea can start a campaign. Once again, unlike Kickstarter, Indiegogo offers both Fixed and Flexible Funding.
Pozible – Launched in 2010, this Australian crowdfunding platform has grown to become the largest in the Asia-Pacific region. Pozible accepts multiple currencies and payment methods (including PayPal and Stripe). The site also offers private crowdfunding allowing the user to restrict the audience to those he/she wants to share the campaign with.
Razoo - Razoo focuses more on causes than profitable projects, claiming to have raised more than $97,000,000 for thousands of causes. They do have a section for non-profit fundraising projects as well.
Crowdrise - Labelling itself as a platform that helps raise money for charity, Crowdrise specializes in dealing with real world issues rather than profitable creativity. They work for animal welfare, arts, cultures, diseases, education and religion.
Appbackr - The site to fund your app. True to its name, Appbackr offers patrons the chance to let backers fund apps that are currently on sale or in development. The advantage? They get to earn back their money by backing the app.
Trevolta - Trevolta, a global crowd-funded travel website, enables travellers to submit their ideas for expeditions in order to raise funds. Projects can be backed by inspired people or sponsors looking for marketing opportunities and brand awareness. Payment is processed through PayPal.