What is Crowdfunding?
Crowdfunding could also be called collective funding or micro-philanthropy. Wikipedia defines it this way: “Collective cooperation carried out by people who form a network to obtain money or other resources, typically using the Internet to fund efforts and initiatives by or through people or organisations”.
Basically it means pre-selling with a goal—to raise a certain amount of money in a specific time period—and to raise this money, rewards are sold to the funders. Normally it operates in all-or-nothing mode: if the total estimated amount needed is not reached, payments are not triggered and the project appears as failed; neither the donors nor the project originator are charged anything. There are many modes, and here I list the best-known of these.
Types of Crowdfunding
- Reward-based: pre-selling, experiences, services. Kickstarter model
- Donation-based: Nothing is provided in return, for NGOs. HazloPosible.org model
- Equity: % of the company. Crowdcube.com model
- Crowdlending: P 2P loans. MyTripleA model
- Participant Account: loan repayment + interest upon sale. Flipsimply model
How to present a Reward-based Crowdfunding project
Things to keep in mind at the outset
- You will be working in reward-based crowdfunding mode. That is, in exchange for your funders contributions, you will have to deliver a reward in the form of a quality content item/product/service.
- To ensure that your campaign is successful, it needs to be backed by a community willing to help you achieve your goals. The people in this community will be the ones that help you spread your idea and obtain as much funding as possible.
Phases in the development of a Crowdfunding campaign
Stage 1: Preparation of the product to be launched in the crowdfunding campaign
- The product should be suited to crowdfunding to ensure the success of the campaign.
- Based on the idea and the product you wish to fund through a crowdfunding campaign, we will have to think of the best way of presenting it and describing it to the public so that they feel inspired to participate in the campaign.
Phase 2. Preparation of the crowdfunding campaign
- Selection of the minimum amount required to complete the project and for it to be achievable without limiting the success of the campaign.
- Creation of explanatory content about the product: text, images, videos, infographics, etc.
- Definition of rewards that will be motivating for the people who participate in the campaign.
- Determination of the duration of the campaign.
- Publication of the campaign on the Lanzanos.com platform
In addition, it will be necessary to plan the work to be done after reaching the target. The product must be made a reality and delivered to the funders as soon as possible
Phase 3. Preparation of the marketing campaign
- The success of a crowdfunding campaign depends on our capacity to spread the word about our idea and to inspire people to collaborate in it. Therefore, we will have to design and execute a communication and marketing campaign aimed at making the project go viral.
- Design of the online marketing strategy:
- Dissemination on social media
- E-mail marketing
- Marketing in search engines
- Creation of a landing page that has information about the campaign and is outside the crowdfunding platform. This will enable you to boost the impact and publish additional content.
- Preparation of an informative press release about the campaign.
- Design of the public relations strategy with blogs, influencers and the media.
- Offline actions that complement the marketing strategy.
Phase 4. Kick-off of the campaign
When the moment of truth arrives, you will have to give it your all to ensure the success of the crowdfunding campaign. Accordingly, it will be necessary to use all our power at the dissemination level and follow up with the people who come onboard to collaborate in the campaign, so that they can also help us achieve virality.
It will be necessary to be very attentive to the comments received and to answer all the questions that arise among the people that show interest.
Phase 5. After finishing the campaign, we will need to do the following
- Properly communicate the timeline and how the individuals who have collaborated will receive their rewards.
- Complete all the production work on the product so that it can be delivered to the funders who have participated in the crowdfunding campaign.
- Carry out the post-crowdfunding phase at the level of online and offline sales.
Consider the legal and fiscal aspects involved in carrying out the campaign.