What makes a good crowdfunding project?
- Compelling story (creators and projects)
In order to capture the imagination of a potential funder, the story behind the venture has to be an interesting one. People need to know the great things you are doing/ wanting to do. A lot of the times, the funder is also backing the person behind the venture and if they have a good story, it’s likely they will get the funding they desire.
- Great rewards
One of the reasons why crowdfunding is so popular is because funders get something tangible in return for their contribution. Rewards are an incentive for people to contribute. The better the rewards, the more contributions you are likely to attract!
- Clarity about what the funding is needed for
Anyone who is handing over needs to be clearly told what they are getting in return for their money. Although a funder is getting a reward, first and foremost they are supporting your venture. It should be clear what will be done with the money and what results will be achieved. This will help funders decide whether or not to support your project.
What are the benefits of crowdfunding?
- You can raise money without giving away ownership of your project
- You can sell your products in the form of rewards
- Advocates of your brand are created when people fund your campaign
- It can be used as a marketing tool
Fund ‘R Venture won a Future 100 award for having a triple bottom line! Thank you Striding Out and Ernst and Young!
Obama’s change for crowdfunding
President Barack Obama recently proposed the American Jobs Act to create jobs for millions of Americans. One key aspect of the proposal was the possible reduction of regulation for startups and especially crowdfunding models.
What change can this proposal bring?
In short, startups and small businesses will be able to raise equity capital a lot easier, both in terms of cost and time.
The bill proposes that an unlimited number of investors can invest up to $5 million in a private, non-listed company. However, each individual investor cannot invest more than $10,000 or 10% of their annual income in such a company.
The proposal also removes the ban on general solicitation which is currently a major hurdle for crowdfunding equity capital.
So what next?
Hopefully the UK follow suit and open the way for a new funding revolution!
Can you really create a feature film for £5,000?!
Well, yes, according to writer/ actor/ director Tim Barrow who directed The Inheritance - a film about two brothers taking a road trip to discover the inheritance their late father left them.
It won the Raindance Award at the British Independent Film Awards and was nominated for two Bafta Scotland New Talent Awards!
So how did Tim Barrow manage such a feat on a shoestring of a budget? “It being Edinburugh, we could put a lot of people up with friends or at local guest houses, which kept the costs down a bit. And there was begging and borrowing from friends and family and just seeing who was interested in helping support the film”, says Tim.
As a result of the success of this venture, he has now produced his second feature film, The Space Between for £15,000!
If Tim Barrow can harness the power of the crowd to support a single idea, and produce extremely high quality work from a minute budget, why can’t you?
How to use crowdfunding and Fund ‘R Venture (FRV) to raise money for great ideas
- Identify your target audience(s)
Targeting a specific, narrow audience will result in greater chances of success as these people will be able to relate to your venture and are therefore more likely to support it. It is important to clearly identify your audience(s) at the beginning when creating your venture.
- Plan your FRV campaign
You will be surprised at how quick your campaign will go by. Traditionally people tend to fund ventures at the beginning and then at the end of a campaign. But to maintain interest in your venture, you should provide regular updates and keep it active.
- Passionately pitch your venture
People are funding YOU as well as your idea. So create a video, let people see who is behind this great venture. Show your enthusiasm and sell your idea. People are many times more likely to fund your venture if you create a video and also appear in it.
- Plan and clearly explain the expenditure
Funders want to know what you will do with their money. Provide a detailed, yet clear outline of exactly what you plan to spend their money on. This builds trust and gives credibility to your venture.
- Utilise your networks!
If you already have fans and followers of your work - target them first with your FRV campaign! These people know you and may already be aware of your work and hence more likely to support your venture. Social media are must-use tools for success with crowdfunding since the more people you reach who contribute small amounts, will allow you to reach your overall goal!
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