Mar 28

Crowd Funding – Failing to Plan is Planning to Fail

final logo new small-0121% of all crowd funding campaigns don’t raise a single cent. Many of them are great concepts, and some even well articulated. But even the best ideas get no traction if the strategy behind the crowd funding campaign is not well thought out, planned and implemented. And of those that do get momentum, the average raise for crowd funding campaigns worldwide is less than $10k, with their potential being capped by a lack of work done in the prelaunch phase. Rather than waiting until your campaign is underway, it is best to plan beforehand and then execute the plan once your campaign is live.

Crowd Funding is not a new concept, and given that it has been the fastest-growing form of e-commerce on the planet for quite a while now, there are many examples of success, and from which proven ingredients for achieving your funding target can be gleaned. In preparing for a campaign, research what has worked for others. Specifically, look for projects that originate from the same sector (e.g. if your project is about building a bike, find projects that have also raised money to build bikes – successful campaigns have been run in almost every category). Look at the campaign description used in successful campaigns, their rewards, their video, and the general layout of their campaign. Take the common threads and use them in your campaign. You don’t need to reinvent the wheel – Success is a well worn path that has already been defined for you.

Campaigns with a video more than double their chances of success. Make sure you shoot a video for your campaign. Keep it short and sharp, remembering that most people stay engaged for just 42 seconds. Tell the viewer about you, your project, what you are raising money for, and let them know how they can help you. Get to the point early. Grab their attention quickly, and keep it throughout your video (and that can be a challenge!). Show your sincerity and personality, and have fun with it.

Cool, sought-after rewards can make or break a campaign. Make them creative, exciting and good value. If you can, get some rewards from your community before your campaign and offer those in exchange for promoting them as part of your campaign (e.g. If you have a friend who offers jet ski tours, ask for half a dozen tours for free that you can offer on your campaign, and mention them in your campaign description as well as your campaign promotion). Use 4 – 6 reward tiers, and always have a stretch-reward, one that offers a unique reward for a really large pledge. Keep in mind, rewards do not need to cost you anything – experiences, naming rights, and public recognition all make for great rewards that cost you nothing.

You want to make sure your campaign looks good, from the project badge (the picture people will see on the Featured Projects page) right through to the campaign itself. Make sure you incorporate great images, whether they be photos or artwork. Even catchy logos can work well here. Sites like www.fiverr.com can develop some really cool artwork for a ridiculously cheap price, and this can help you to stand out, drawing people to your project over others.

At the same time as building your campaign and your collateral to look, feel and sound right, as well as to be engaging enough to people that are drawn to your campaign, you need to be working on building your crowd. This is perhaps the most important ingredient in achieving crowd funding success. The money will always come after you build and connect with your community. Without building and connecting with your community, it is like trying to sell Amway on the street corner. You need to have supporters primed and ready to be your early adopters. Crowd Funding is a numbers game. In our previous blog we outline the chances of achieving crowd funding success given the amount of support you have early in your campaign. A good campaign converts just 4 – 5% of the traffic that comes through to the site. Based on these figures, if you want to raise $10,000 with the average pledge being $50, you need to get your message out to 4,000 – 5,000 people. If your crowd is limited to just 400 friends of Facebook, you need to build that before you go live, or the odds are stacked against you achieving your target.

One of the ways of getting support is to “influence the influencer” – that is, to have well connected people speaking out on your behalf, promoting your campaign to their followers and helping spread the word (and, in the process, almost validating your campaign for you). Find well connected people amongst your friends and your circles (they don’t need to be Hollywood A-listers, just well connected folk), and ask them to send out a tweet or blog-piece for you once a week during your campaign. If you write it for them, you make it easier for them to promote you, and you retain control of the message.

And once you have prepared, only then will you be ready to put the pedal to the metal and drive your crowd funding campaign.

Mar 08

Crowd Funding – the Symbiotic Relationship with Sport

final logo new small-01The success of crowd funding campaigns is largely down to some key factors. Firstly an engaged crowd, a group of supporters who are passionate about the outcome or want the rewards on offer, and who are motivated enough to spread the word. Then there are the rewards themselves – cool, sought after and representing good value, enough to motivate a pledge of support. Of course, there also needs to be a well articulated project about which the campaign is being run to raise funding. These are all present with sporting clubs, big and small, making a perfect fit for crowd funding.

Sporting groups and clubs always have projects on the go that require funding. More and more, they are finding the traditional methods of raising funds becoming less effective and more tedious. Sausage sizzles seem to raise a few dollars, but require a mountain of effort to raise relatively little funding (also, it’s kind of ironic that sporting clubs that strive for health raise funds from the sales of unhealthy fatty sausages). The same applies to selling fundraising chocolates. Raffles, too, involve so much time, and require someone to organise prizes, someone to sell the tickets, and then the admin around drawing and delivering the prize. Again, a lot of hard work for seemingly little return. And the big issue with these traditional forms of fundraising, they have little in the way of residual value as an engagement tool. Once the fundraising drive is over, there is hardly any ongoing engagement.

The types of projects that sporting groups can fund are limitless. There is a the constant need for equipment – shirts for players, training equipment, balls and bats, as well as nets, corner posts, and supporter facilities. There are also events that are run by some clubs, the old Dinner Dance or the like that bring about further supporter engagement, but which few clubs can afford to run. Preseason and post-season tours are costly imposts on sporting clubs, but these too can be crowd funded. Crowd funding can also be used by sporting groups in some creative ways. Tweed Valley Rollers (TVR), a group of roller derby girls from northern NSW, ran a campaign where they successfully funded a 1920s-style calendar which was the catalyst to further funding efforts. It all began with a crowd funding campaign which they then leveraged into further funds and so on.

Coming up with rewards for sports-themed campaigns are always easy, as the sector naturally lends itself to perks that will motivate people to support campaigns. A New Lobster offered private coaching as well as well as other services in a form of pre-sales to generate pledges. TVR offered preferential seating at their game, photo opportunities with players, and a heap of other coll rewards that saw them quickly achieve their target. In most cases, sporting clubs can improve the geographic spread and appeal of their campaign by utilising contacts in their sport to get more broadly sought after rewards. A New Lobster offered private tennis lessons as rewards – a great incentive if you live locally, but less effective to those who aren’t in the vicinity. If they utilised contacts to get a couple of autographed racquets from a local famous player on the international circuit, and then offered these as rewards, then their appeal would immediately increase to potentially a worldwide crowd of possible supporters . There is also the opportunity to offer some big rewards to sponsors, both present and prospective, and really get some major contribution to the campaign. Creative thinking can dramatically improve the scope and potential success of a crowd funding campaign.

But the most well structured campaign will not reach its target without engaging a crowd, and this is where sporting clubs have a big advantage. Sporting clubs, by sheer virtue of what they are, have a natural crowd to tap into. Players, parents, supporters, sponsors, and even competitor clubs’ players and supporters are potential backers of campaigns. By using the methods of communication that clubs use in their day-to-day operations (i.e. there doesn’t need to be any extra work undertaken to run a crowd funding campaign), sporting clubs can get the message of their campaign out to the crowd. Ground announcements, newsletters, text messages, social media blasts, or usual forms of communication to supporters can be employed to inform the crowd of the campaign, and get them to pledge their support,  or to spread the word (or both!). The benefit of most sporting organisations is there will also be the core loyal and passionate supporters who will not only pledge their financial support, but who will drive and support the efforts required to continually get the message out there, doing this as availability permits, representing a far more efficient and effective fund raising option for time and resource poor sporting organisations.

Feb 14

Crowd Funding – Providing Schools with an Effective Funding Solution

final logo new small-01School is back in, and now the realisation returns that many schools are in need of more sporting equipment, shade for lunchtime seating, props and scenery for the school play, funding to sending students to participate or compete in an event, and the cash to afford the things to supplement the teaching of the 3 Rs. But with governments’ tightening up on the funding they provide to schools for much required “niceties”, and with traditional funding drives becoming tired and lacking enthusiastic support from the community, crowd funding looms as the fresh and effective solution.

It is wonderfully symbiotic – schools are a great fit for crowd funding, and crowd funding offers a source of funding that requires far less time, effort and risk on the part of the schools. In fact, with a fresh new approach like crowd funding, the engagement level is higher and the appeal far broader than the traditional funding initiatives employed by schools in the past.

There are so many inducements or rewards that are at hand that schools can offer to those who pledge their support. Artwork from the kids, corporate exposure in school newsletter, standard tickets or preferred seating at school plays or sporting events, treats from the school canteen, or recognition through naming rights or mention on an honour board (or even on a simple plaque) are just some of the incentives that schools can offer without being out of pocket. Further engagement with the community can be achieved if some of the parents offer rewards from their businesses to those who support the school’s campaign, thus giving greater inducements to pledge.

There exists a natural audience around schools, a ready-made community from who support can be sought. Parents, students, former students or alumni, local residents, local sporting and special interest groups, and Parents and Friends Associations are all prime candidates to whom schools can easily communicate, and from whom support will be easily forthcoming. With a captive audience, communication to “the crowd” and continually driving the message takes no additional time to the standard day-to-day activities of the school, as informing the crowd is as simple as mentioning the campaign in newsletters, at assemblies, and in the regular forms of constant communication that schools undertake.

Rather than families spending days selling fund-raising chocolates (a practice of which families are growing tired, not to mention the safety issue around sending kids around the neighbourhood, knocking on doors) a crowd funding campaign can be set up in just 10 to 15 minutes, and then maintained and driven with just a few minutes of commitment each day to continually communicate with “the crowd” via social media and email. As such, crowd funding represents a far safer and more efficient alternative to fetes and other fund raising events that require a mountain of effort and which run the risk of lack of turnout or even poor weather.

Crowd funding may just well be the perfect, holistic solution for the funding needs of most schools. Providing the cash they need, as well as a great engagement strategy with the local community, crowd funding will become the sustainable funding solution for schools to use for ongoing, rolling campaigns to fund their needs and aspirations.

Jan 25

Crowd Funding – Revisiting the Third Tier Principle

final logo new small-01The importance of the Third Tier Principle has long been stressed as the basis on which any crowd funding or capital raising must be based. It is essentially the key to success, with early engagement being the start of broader attention and support. It’s like when we were kids standing on the side of the pool with a group of friends, no one wanted to jump in first. But get a few in the water, and the edge of the pool is no longer the domain of “the cool kids” who will have already jumped in to join their peers.

The third tier principle starts with their first tier – your family and friends, the ones who know and love you. Even your followers, fans, and contacts on social media are considered first tier, as are all of the people in your email folders. In essence, anyone with whom you can have direct communication constitute your first tier. These are the ones you must engage for support for your campaign to be successful. They are the ones who provide early validation for your fund raising or capital raising efforts, and will show others how to follow. Without early engagement, and the support of the first tier, the broader circles of your crowd will be less likely to engage.

The power of the first tier can never be understated, and the ability to engage them early in your efforts to raise broader support is essential to you reaching your funding goal. A study of major crowd funding campaigns around the world showed the importance of priming your crowd early, even before our campaign formally begins, so that you achieve early runs on the board soon after your campaign commences. The study showed that if, in the first 48 hours, you have not raised any funding, your chances of reaching your target was just 15%. However, by reaching just 1% of your funding target within the first 48 hours of your campaign, you almost double your chances of success to 27%. In fact, if you can get to 5% of your target within the first 48 hours, you have a 50% chance of reaching your goal. Should you be able to get to 10% of your funding target in the first two days, then your chances of success increase dramatically to 70% – Achieve 20% and you have an 80% chance of succeeding. And campaigns with 35% of their funding goal met within the first 48 hours meet or exceed their funding target in almost every case.

Having understood the importance of early engagement of your first tier, and the need to build breath of numbers before your campaign commences, your first followers “beckon” to their networks to join them in their actions in following and supporting your campaign. They become your advocates and call to their networks, usually through the use of social media, to do as they have done in pledging their funds to your target. This results in a considerable amplification of your initial efforts. Once this happens, your campaign will start to build a momentum of its own. Crowd funding experts recognise that if a campaign hits 30% of its funding target, it goes on to meet or exceed its target in 90% of cases, and this is due to the momentum created once the second tier engages.

Once you have momentum, the third tier sits up and takes note. Media will also jump on board without prompting. Statistics show that you need to reach 25% of your target before strangers start pledging their support, but once you tap into the third tier, you are now attracting the attention and support of a massive crowd. Referred to as “the smart money”, the third tier is less driven by emotion than the first and second tier, and more about the prospect of what is on offer (although they often are motivated by the fear of missing out).

You Tube sensation, The Shirtless Dancing Guy, is a short video that really captures the essence of the Third Tier principle. It is a clear visual demonstration as to how important it is to gain the support of your first followers, and embrace them. It shows how the first tier instinctively calls on their networks to support and to do as they have done. Without the momentum created by the first two tiers, the third tier, or broader crowd, is less likely to engage. But when the tipping point is reached by the first two tiers, a groundswell is created as the third tier join the movement, and the initiator becomes surrounded by a broad, engaged and supportive crowd.

Jan 04

Crowd Funding – Putting It Together Makes Such Beautiful Music

final logo new small-01The modern age of crowd funding began in the 1990s with UK rock group, Marillion, so we start this year with that theme. Crowd funding has been the domain of the creative and artistic types who have been successfully using the medium to fund their dreams. But what is it they can fund? And what rewards can be offered to potential supporters to induce them to part with their money and help the project creator? Our latest blog incorporates the successes that have amounted to large sums having been raised by creative crowd funding campaigns by the musical fraternity.

Musicians are always in the need of better gear or more equipment to help them achieve the desired sound. Crowd funding can assist them afford the gear they need.

And once they have achieved the perfect sound, the costs of recording and capturing that sound for all eternity can be exorbitant, but crowd funding has been successfully used to cover the recording costs of bands and musicians over the years.

Once the sound has been perfected with the right equipment, and the tunes have been captured in digital or “hard-copy” format, it then is the job of the musician (or their promotional team) to get the word out to the world. That involves touring, and that can be costly, and then there’s the promotion of concerts and the recordings themselves. For almost 20 years, bands and solo performers have been using crowd funding to successfully cover these costs, paving the way for current musicians to do the same.

So with an understanding as to what can be funded, what inducements can be used by a musician entice their supporters to part with their cash to fund the campaign?

Let’s go with the rewards offered by successful campaigns that have been run around the world:-

A $10 pledge could be recognised with an offer of digital downloads, getting their music “out there” and (in effect) making pre-sales. Successfully doing this tends to bolster social proof that there is an audience for the band’s music, which is a powerful tool for the band to use when convincing venue-owners to book their act. Approaching a venue owner with evidence that the performers have made strong sales makes for a compelling argument to book them.

A $25 pledge may earn the supporter a ticket (or a couple of tickets), to a gig, again offering a form of pre-sales and validation. It is always reassuring for an event organiser to have had presales made, and with the all-or-nothing nature of crowd funding campaigns, ticket sales are only made and the event only proceeds if the funding targets are met – a win / win for all concerned.

A pledge of $50 may earn the project supporter some other merchandise at prices less than face value. Remember, rewards need to be great value and sought after. Perhaps even offering bundled rewards – a t-shirt plus a CD – may represent something that a true fan may really want. Keep in mind, too, that items in short supply or gifts that are personalised can command a premium. By autographing these types of rewards, supporters may be prepared to pay a premium (imagine if crowd funding had been around in the days of the Beatles when they were young – what would a T-shirt autographed by a young John Lennon be worth today if offered back then??)

Offering personal experiences have often proven to be successful enticements to get supporters to pledge. Rewards like offering fans to sit in on practice sessions, or to come along and jam with the band can be highly attractive to die hard devotees.

Stepping it up a few notches, larger pledges worth hundreds or thousands of dollars could be rewarded by a private performance (offering the services of the group to play at a party, or the singer to perform a couple of romantic songs at an anniversary dinner).

And if these aren’t incentive enough, remember that everyone loves to see their name in lights (or, at least, in print). Offering to put the supporter’s name on the liner notes or on a roll of honour on your website could be just the carrot to get them to hand over their money in support of your campaign. Larger contributions can be recognised by offering the supporter “producer status” on your liner notes or CD sleeve.

So there are the “what”, the “why” and the “how”. Now it just remains for more musicians to recognise the “where” and use the above framework to launch their crowd funding campaign on www.ipledg.com to fund their passion.

Dec 20

Crowd Funding – Bringing Your New Year’s Resolution to Reality

final logo new small-01It is well documented that most New Year’s resolutions never come to fruition. A high percentage of the best of intentions dissolve by the end of January, and seldom do any make it all the way through the 12 months. The key reasons for New Year’s resolutions not coming to light are a lack of planning, inadequate support or commitment, and a lack of funding to make the plans actually happen. For many, crowd funding may well be the key to a range of plans for the New Year actually being achieved.

Any quality crowd funding campaign will have been well thought through. The viability of the project and outcome will have been considered and researched. Benchmarks and quotations, obstacles and solutions – all will have been scoped out to ensure that the plan is logical and viable. It is this planning discipline that is lacking from many New Year’s resolutions, which are little more than whimsical hopes and aspirations. The planning and articulation of such strategies are what adds meat to the bones, and makes the desired outcomes more tangible and conceivable.

Running a marathon is not easy without a support crew. The runner’s team keeps them focused, enthused, and committed to achieving their goal, all the way to the end of the race. Should the runner’s mind wander or should they hit “the wall”, their team will be there to pick them up, and refocus them on the task at hand. The same can be said of crowd funding. It is very easy to give up when it’s just you, but when you have the support of your crowd, it is harder to give up and just drop the project. You also have the additional benefit of them getting behind you, cheering you on, and pushing you to achieving your goal. It is often said that a task shared is a task halved. This is very much the case with crowd funding, and a key way as to how crowd funding your New Year’s resolution can keep your supported and focused.

So many plans never come to pass due to insufficient funding. Set your funding goal to reflect an outcome that has been well costed. If you can, also set up a tipping point, a compromise where you might reach a lesser but more achievable goal should the crowd only support you to that level (it also gives you a second bite at the cherry to make your dream happen). Offer great, sought-after rewards and spread the word to your crowd, asking them to engage by supporting you as well as by getting the word out to their networks. Continue to drive your campaign from before your launch right to the very last day, even if you hit your target along the way (remember, you can very well over-fund your campaign, giving your dreams and resolutions far greater scope).

Now is the time to be considering your resolutions for the New Year. Perhaps this year, crowd fund your passion, and build your campaign and your team around your goals. Plan it well and articulate your project description to reflect a considered approach. Engage your crowd and your team early. Have your supporters ready to keep you on track, starting strong and focused on running a race with benchmarks and well thought out milestones. Make it clear to them as to how they can support you and what role they each need to play in helping you exceed what you have resolved to do. And with all of this in place, fund your plans with a well executed campaign. And if you have done this correctly, you will find your New Year’s resolution becoming reality, in far greater ways than you ever planned.

Merry Christmas from all at iPledg and here is to a happy and prosperous New Year that sees you fund and achieve your passion in 2015.

Dec 04

Crowd Funding – How You Start Determines How You Finish

final logo new small-01Preparation is the key to successful crowd funding, whether employing the pledge model or capital raising through equity crowd funding. Many experts can quickly assess whether the campaign will reach its goal, just by looking at the campaign and asking the project creator a few simple questions. In most cases, success is determined not by what happens during the campaign, but by the work done in the prelaunch. Research and work done in the lead up to going live will not only give your campaign the best chance of success, but often determine whether the funding goal will be met.

Recently, I stumbled upon perhaps the best template for successful raises that I have ever seen. I am not one to usually promote other sites and businesses related to Crowd Funding, but I can’t sing the praises highly enough for the highly respected Eli Regalado, Chief of Madness at Mad Hatter Agency, who has raised over $1,000,000 and has now put his hints and tips into the Udemy course – “The $400k Crowdfunding Launch Formula” (He obviously wrote the course before raising even more funds!).

His course emphasizes the need for 8 – 12 weeks of preparation prelaunch to really understand the product, the market, and the crowd. “Family And Friends Raises” raise small amounts of money, and rarely even have the audience to do that much. Following Eli’s tips helps to really position yourself well at the starting line of your campaign, so you can cruise to the finish line (OK, there still is a fair amount of work between the start and the finish, but preparation is the key).

The first step is to build your team with specific roles and tasks. Set up a register where you can communicate amongst one another, and have a clear record of what needs to be done by whom, by when, and how. Plan your work and work your plan.

Once your team is in place, start to gain intelligence on the project, the space, and the crowd. Eli gives some great tips on how to “Search like a Ninja” and use simple Google searches in ways far more effective than I ever knew possible (and I thought I was pretty good at searching topics on the ‘net). Searching and researching with tools like www.Netvibes.com will assist in understanding who is talking about your sector and what they are saying.

Identifying and getting on the right side of influencers and advocates will help increase your audience and your bandwith, as well as add considerable clout to your message. It is not enough to find influencers with a few thousand followers – using Eli’s tips will help you find influencers with tens of thousands, if not hundreds of thousands or even millions of followers. “The $400k Crowdfunding Launch Formula” doesn’t only introduce you to tools like www.socialbro.com and www.twitonomy.com but will show you how to use them to engage. From there, you can also get bloggers blogging your message, and turning into advocates for your campaign, way before it even begins. And best of all, you can ask for what you need from well connected, key influencers.

Once your crowd is starting to grow and buzz, you get to the building phase, at which point you start creating content and digital assets. Tools like www.kickspy.com will allow you to see what for what has worked before in your sector or for your product. The shortest distance between you and the point of success is not a straight line, but by following the most well worn and successful paths of those who have gone before you.

Then it is a matter of continuing to work your crowd until your campaign goes live. Be authentic in how you choose people and build some rapport first. Take time to do this and your influencers and ambassadors will not only help with your campaign, but they will also help you long term. The beauty of the internet is knowing that if you make a trusted and sincere connection to key influencers and work with them, the reach can be quite extraordinary.

Put quite simply, crowd funding is work – team work! Build your team and work with them. As the founder, drive your vision, but ensure you involve people and listen to them. Build and engage your crowd, and use the experience of those who have done it in the past to build a solid campaign. And remember that the money comes after you build your community. If you don’t, it is like trying to sell Amway on the street corner.

Nov 09

Crowd Funding – the Basics of Capital Raising

final logo new small-01Capital raising, whether it is by way of equity or by pledge, all starts with a great business or concept. Built it and they will come – as long as “it” is attractive, functional, and relevant. From that, the journey of where you have come from and where you plan to go needs to be cobbled into a good story, and then delivered as a compelling sell to an engaged, supportive and enthused crowd. Get these right, with each of these steps seamlessly integrating into the next, and you have the formula for a successful funding campaign.

Getting the product, service or business model right is like having a solid footing on which to build a house. A less than solid footing may allow you to make some progress, but it will eventually crumble under the weight of scrutiny and market pressure. “Pivoting” – making changes as you develop your concept in response to market feedback and new findings – will allow you to better fashion your concept before you go to market. Doing your homework will ensure you know what the market wants, and that your product, service or company will satisfy or solve that need. Understanding your market allows you to fine tune your concept so that you deliver the market what they want or need, in a way that they can easily uptake your offering. And ensuring you present the pathway forward in a well considered and articulated manner will allow you to take the concept to market.

Once you are confident that you have the right product that people will want, and you are able to demonstrate that your assumptions are substantiated, you will need to start to prepare and build your “crowd”. Start to engage them, not only in your capital raising, but in the product or business itself. Again, if they like what you are doing and you can build enough excitement, you won’t need to ask for investment or pledges – your crowd will be beating down your door to be part of your venture! The internet has made it easy to find like-minded individuals and organisations with whom you can communicate about what you are doing, and to build these followers in to tribes that will not only come on board, but endorse or advocate your efforts, business, and product.

Once you have built your tribe, you need to maintain engagement as well as continue adding to your crowd. Communication is the key. Let them know of your progress. Keep them engaged by telling them of your successes, milestones reached, and the goals you have kicked. Don’t whisper, but shout it from the roof tops and let your crowd hear it. And don’t just talk at them – invite them to get involved and start a conversation. Again, do it publicly so other members of your crowd feel comfortable to get involved, and those outside feel compelled to join in on not just the discussion but to become part of the group.

Your ultimate success is highly dependent on you. 21% of all funding campaigns raise nothing, not a single dollar. This is due the issuer or the project owner failing to engage his first tier or those who know and love them the most. It cannot simply be left for the platform or someone else to bring on funders. Initial momentum for any campaign must be driven by the issue or campaign owner. Before any funding campaign begins, the project creator or issuer needs to have investors or supporters ready to support from the get-go. A movement is created by momentum, and momentum needs to be created early. Many funding campaigns run out of steam because support is too slow in coming. Get supporters and investors on board early, and let the world see they you have something about which they should take note.

Once momentum has begun, keep it going, and recognise there are now a number of priorities to support the main goal of achieving your funding target. You need to motivate your initial supporters or investors to invite their friends and contacts on board, telling them about the great thing they have done in supporting your business, product, or venture. As each of your crowd will have a crowd of their own, this “second tier” represents a much larger audience than you will have reached by yourself. Then there is also the constant task of keeping your total supporter base engaged, as well as growing the number of members of your tribe. Keep your follower numbers growing, keep your tribe focused and involved, and ask your supporters to become advocates for you.

Capital raising in any form involves work – teamwork. You need to sustain energy to maintain focus on building and driving our team towards your funding goal. If your product is largely built to truly satisfy the requirements of the market, and you have done your homework correctly, then you will not have to spend much time on your product as you do your capital raising. Build your immediate followers (your “first tier”) and get some early runs on the board. From there, communicate your successes and ask your first tier to engage their contacts (the second tier). Create noise, momentum, and give people a reason to want to have a look at what you are doing – at your business as well as your capital raising efforts. For the duration of the campaign, never give up, keen going, and remain fast, flexible, and fashionable until your goals are achieved.

Oct 27

Crowd Funding – The Discovery Session

final logo new small-01Before you start your crowd funding campaign, it is essential to define your target market. Not for your product or service, but to work out who represents the pool of potential supporters who might assist you with your fund raising. Prior to going live with your campaign, you should make a comprehensive list of potential supporters who you can approach, so that the fund raising process starts quickly and accelerates rapidly, attracting the attention of broader and broader networks of supporters. This is known as the Third Tier Principle.

Most crowd funding platforms are there to guide you through the fund raising process, as well as to host your campaign. Whilst their sole purpose is not to attract supporters, they will do this if you start to engage the First Tier, namely those that are closest to you (your friends, family, workmates, etc). Once you have engaged the First Tier, these supporters will start to do some of the work for you, engaging the Second Tier, or “friends of friends”, as the early adopters start to tell their friends what they have done, and inviting them to do the same.

Once the Second Tier starts to support your campaign, you will have established a movement or sufficient momentum for the Third Tier to start to take note. These are a broadest pool of supporters, and what is termed “The Smart Money”. The First Tier supported out of emotional motivation – they know you and love you, but the Third Tier do so out of logical reasoning. They see movement and want to jump on board.

third tier

You need to liken it to the days of your childhood when you stood with your friends at the edge of the swimming pool. Initially, there was the constant elbowing and comments of “you jump in”, to which your friends replied “no, you jump in first”. This continued back and forward until the first, braver few jumped in, then a few more, and then more until it was no longer “cool” to be left standing on the edge.

The same is the case for fund raising. Engage your First Tier. Get them to jump in and then others will follow suit.

To establish your first tier, you should run a Discovery Session to identify who might make up that group.  A Discovery Session simply allows you to make a list of potential candidates for the First Tier so that you have a target group to approach. The broader you make this, the more chance you have of establishing the initial momentum and getting underway to reaching your funding target.

Below are listed some areas to consider when making the list of your potential first supporters:-

  • Family – Ask your family members if they would like to support your campaign. Often family members are reluctant to support because they never really know what they are getting into, but your project description makes it simple, clear and well structured as to what they are supporting.
  • Friends – Same as for your family, ask those who know you and love you the most to consider supporting you.
  • Neighbours – Who are the people that live in your community that ask you with some interest what you are up to? Surely there are people in your local area that may make good potential supporters.
  • Workmates – The clearly defined structure of a crowd funding campaign makes it easy for the people you work with to support you.
  • Clubmates – Are you the member of a sporting club, social club, or a group like Lions or Rotary? Are there members there that you could introduce to your campaign? Remember, you don’t have to directly ask them to support you – if you have set up your project description in a way that is attractive, they will feel compelled to support without you asking. You just need to tell them about what you are doing and invite them to take a look.
  • Social media contacts – Do you have friends on Facebook, Followers on Twitter, or Connections on Linkedin? Prior to a crowd funding campaign, build up your contacts on social media, and once your campaign is live, be sure to invite your connections to have a look at your profile page. Marketing this way is a game of numbers, and the more connections you have on social media, the better chance you will have of reaching your funding target, so be sure to build up your connections before your campaign goes live
  • Interest groups on social media – Not only is it wise to start building up your followers on social media, but start to seek out groups and individuals with an affinity for what your campaign is about. By connecting with likeminded individuals and seeking out groups on social media, you greatly increase your pool of potential supporters. A simple search for search terms associated with your product or service will connect you to a whole new groups of potential supporters.
  • Everyone in your Sent box, Inbox, and Deleted emails – they are all email contacts and a great place to start a database. Everyone who has sent you and email in the past or everyone to whom you have sent an email is captured on your computer. Fish out these email addresses and start to build a list of them (a simple database). You can then email them all about what you are doing with a simple link to your campaign once it is live.
  • Local media – Start to build a list of local media contacts so you can let them know about what you are doing. On the nightly news you will see many of the reporters have their twitter handle (jot them down and send them a direct message). Many of the journalists in the local paper have their email address listed at the end of articles they have written – add them to your database. Contact the local radio stations and tell them about what you are doing. The local media are always on the hunt for interesting local stories, so feed them your news.
  • Blogs – Ever considered writing a blog? It is a great way to get your thoughts out there and engage likeminded people and those interested in your product or service. And if you struggle with writing a blog, you can do a video blog (face to cam) or even use sites to create a cartoon blog to get you message and thoughts out there. As well as creating your own blog, do as we have suggested above and search for blogs related to your product or service, and join them to engage with people who may become potential supporters.
  • Suppliers – Those who supply you, whether it be the components for your product or service, or anything from the cleaning products your use in your business to your stationery supplies, all make potential supporters. They always keen to strengthen ties to their customers, and may make for potential supporters. There is one way to find out – add them to your list and invite them to have a look at your campaign.

Your Discovery Session will have flushed out at least a couple of hundred (if not many more) names of potential supporters who you now need to get on and contact. Start to email, telephone, sms, or visit them and let them know about your campaign. Keep in mind that people will need a couple of reminders during the period of your campaign. Contacting them is not a one-hit-wonder, and the “constant contact” strategy works best, from sending an email a week right up to social media announcements that will need to be made daily.

Oct 08

Crowd Funding – No Small Change When It Comes to Social Funding

final logo new small-01Mention the word “Entrepreneur” and people immediately think of words like profit, performance, return and dividend. But when it comes to social entrepreneurship, we move into new ground, that of broader cultural, social, and environmental outcomes. Profit may still be associated with such ventures, but profit is a mechanism to sustainability rather than the main focus which instead is aimed toward the greater good. And those supporting such initiatives do so not out of greed (what’s in it for me), but out of a shared passion for the cause or the outcome it will deliver.

Social entrepreneurship operates on a focus shifted from maximising profits for shareholder returns, to the pursuit of solving social problems. Typically there are four key categories of social entrepreneurship:- community-based enterprises, socially responsible enterprises, social services industry professionals, and socio-economic enterprises.

Community-based enterprises bring together a community, and focus its culture and resources to drive toward their desired outcome. Socially responsible enterprises aim to create legacy projects, that offer sustainable development directed mostly on societal gains. Social service industry professionals are those who work specifically in the sector of social services to develop and build on the social capital of their chosen individual, community, or organisation.  Socio-economic enterprises refers to companies with an awareness of their Triple Bottom Line, and direct some of their revenue and profits towards implementing social change, be it empowering change-makers, mentoring, strengthening existing projects and assisting with further capital raising.

The concept is not something new to the social or economic landscape. Back in the mid 1800s, Florence Nightingale demonstrated the concept when she not only documented the need for change in hospitals where high death rates were occurring, she drafted the change plan, and organised numerous fund raisers to source the capital to implement her recommendations. She engaged the nursing community by reassigning tasks to the most capable and passionate supporters of the cause, uniting them and focussing them as a community to deliver a beneficial outcome to the cause about which they felt so strongly.

In recent years, initiatives of a social entrepreneurial nature have been significantly assisted by the reach of the internet and the emergence of crowd funding which, in the words of Wikipedia, allows for “the collective cooperation, attention and trust by people who pool their money and other resources together, usually by the internet, to support efforts initiated by other people or organisations”. In effect, social entrepreneurs are now able to embrace a greater following and raise the required funding through crowd funding.

Once such example was the project Tackling Child Labour on Indian Stone Quarries Through the Construction of Residential Schools. Having identified that children living on stone quarries belonged to one of the most disadvantaged groups in India, the initiators of this project recognised the approval given by the Indian Government to Santulan to develop residential schools, and decided to crowd fund the additional costs needed to cover basic furnishings such as study desks, chairs, beds and linen. In appreciation of the selfless work Santulan does in pursuit of social justice for some of the most marginalised communities in Indian society, this group sought to raise $15,000 on crowd funding platform, iPledg. Their 90 day campaign exceeded their $15,000 target, with the campaign raising $26,790, all of which was allocated to the works of Santulan.

The benefits of social entrepreneurism are obvious, but the devil lurks in the inevitable detail. Whilst most social entrepreneurs are well meaning, their skills may be questionable, especially in the areas of sustainability, engagement, and scaling. In addition, both the skilled and less adept initiator will come up against the policymakers who often do not fully understand social initiatives, which can lead to the project stagnating or stalling completely. Policymakers often do not share the same passion as the social entrepreneur, with their priorities being more around mitigating risk and avoiding political repercussions, so the meeting of the two minds requires some highly skilled massaging of the differing agendas. And once underway, longer term sustainability of projects can be compromised by the entrepreneur confusing “not for profit” with “not profitable”, thus running out of funding requiring to maintain momentum or retain knowledge and resources.

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