Crowd funding has become mainstream. It’s used for funding everything from product development to medical treatment.
Typically crowd funding platforms give you space to pitch your project – and then how you will reward your investors.
Just because you’re doing this online, don’t fool yourself into seeing the people who are giving you money as anything except investors. They may have an emotional reason for investing (because they like you and want to help you or because they like your idea and want to see it come to fruition), but they’re putting hard cash into your business, even if it’s only £5.
Clearly when you’re pitching a business project you need to spend time working out how to pitch your project so it’s attractive and gets people engaged. Images, videos and simple plans all help to get your message across. However, don’t skimp on the rewards part of the equation – it’s just as important.
What do your investors want?
It depends on how much you’re asking for. If it’s small amounts and you’re hoping for lots of people investing a little, then you might have to factor in buying in promotional items if you don’t have anything suitable already in-house.
Some people run a ‘thank you’ wall on their website, but that alone may not be enough to attract even small investors. An ‘I invested in …’ coaster or mug might be a better reward.
If you’re developing a product offering ‘first off the production line’ items for beta testing may be a good place to start for mid-range investors. Clearly that depends on the retail price you plan to charge when your product is done. You might offer a voucher for a substantial discount (worth more than their investment) if the product is something that they’re likely to want.
If you’re getting funding to run an event then either free or discounted tickets are on obvious reward, but for higher investments you might offer an event VIP experience.
Get creative and don’t forget, you can always offer actual shares in your business so the investor gets ongoing dividends on your profits. If you decide to do that, remember that you’re giving away some of your business’s profits – forever!
Put a system in place
When your campaign finishes thank them for their investment and let them know when they can expect to receive their rewards.
Don’t forget your investors – keep in touch, send them progress reports and let them know if there are setbacks or delays. They’ll support you if you keep them in the picture.
When your project reaches fruition ensure that sending out your investors’ rewards is somewhere near the top of the list of things to do. Remember – without them, you couldn’t have got your project off the ground.