Forget pleading with a bank manager when you need cash to set up a new business. Crowdfunding, where you ask a large number of people for a small amount of money, is fast becoming the way to raise capital. The Pebble, an e-paper smartwatch, is the biggest success story to date, with 68,929 investors pledging over $10m through online funding platform Kickstarter.
Here’s how to go about crowdfunding your big (or small) business idea:
1. Research, develop and refine your idea. Crowdfunding campaigns run for a finite time, usually 30-60 days, so clearly defined, focused projects stand the best chance of success.
2. Set your goal. Do you need to raise all the funding, or just part of it? Have you considered the cost of any rewards you’ll be offering backers?
3. Choose the right platform. Kickstarter, http://www.kickstarter.com, is the most famous, but there are plenty of other options. What model best suits your idea: donation-based, where people pledge money in return for products, perks or rewards? Or equity-based, where you sell a stake in your business?
4. Write a killer pitch. Tell a compelling story about your product or service. Offer something back – projects with rewards do better than those without. And the more creative the better: limited editions of a product, an experience money can’t buy…
5. Create a video. Like rewards, videos sell a project. You don’t need to be Spielberg, most are just people telling a simple story straight to camera.
6. Drive traffic. Money won’t just roll in – tell people about your page via email, Facebook, Twitter, Pinterest and LinkedIn. Create more traffic by asking them to tell their friends, family and colleagues about it.
And remember, if your business idea takes off, with Synergy Business Centres you don’t have to splash out on expensive premises. From virtual office and mobile working packages, to serviced office space you can book by the hour, the day or longer term, we can help keep overheads to a minimum. If you are thinking about starting you business read our feature story in this issue ‘It’s Time! To think about starting your own business …’
Area Director, E: [email protected] T: 1300 476 946 Level 6, 39 London Circuit, Canberra Units 1 to 4, 8 Jardine Street Kingston ACT 2604