Crowdfunding Workshop

Devin D. ThorpeOctober 2, 2014CrowdMap ‘14

@devindthorpe

Crowdfunding

• The use of third-party websites to raise money for your project

• Examples– Kickstarter– Indiegogo– Rockethub

• Hundreds of others

Types of Crowdfunding

Rewards: Mostly campaign-created goods being sold

Investments: Debt and equity issues

Donations: Nothing but thanks in return

Crowdfunding Potential

• ₽8 billion for a skyscraper in Bogota, Colombia (investments)

• ₽400 million for a watch that displays data from your phone (rewards)

• ₽200 million for Habitat for Humanity (donations)

What to Expect• Crowdfunding for

investments is new, with average raises of about

4,000,000 in the UK₽• Crowdfunding for rewards

and donations average about 160,000 to ₽

200,000 ₽• Many campaigns fail to

raise any money at all• Most campaigns raise less

than 200,000₽

Photo credit: freefotouk / Foter.com / CC BY-NC

Where The Money Comes From

• The “Crowd” is almost as difficult to find as a yeti

• The money will come mostly from your own network (about 75%)

• The most successful campaigns get 75% or more from the “crowd”

Campaign Timeline

• Phase I: Assessment• Phase II:

Preparation• Phase III: One-on-

one fundraising• Phase IV: Media and

social media• Campaign

1 2 3 4 5 6 7 8 9 10 11 12

Phase I

Phase II

Phase III

Phase IV

Campaign

Timeline in Weeks

Assessing Your Network

How many partners do you have in this project?

How many people do you know? Facebook Twitter LinkedIn Google+ Other social networks

You must also know how to reach them

The Value of a Friend The average crowdfunding pledge is about ₽3000 The most frequent crowdfunding pledge is about ₽800 You can get:

most of the friends you call about half of the people you email (not spam) personally Just 1 in 100 to 1 in 1000 of friends on social media

Your experience will vary significantly, depending upon How well you know people How cool your project is How often you post to your social media platforms

Going Viral

Reaching way beyond your network requires: Passion among your friends, fans and followers Media attention (blogs, newspapers, radio and

television) Luck

Assessing Your Project

• All ideas are not equal– Appeal– Urgency– Credibility– Community

DonkeyHotey / Foter.com / CC BY

Appeal

• Cool by comparison• Competition• Substitutes• Not just functional• Disruptive• Revolutionary not

evolutionaryPhoto credit: FotoSleuth / Foter.com / CC BY

Urgency

• Will the project succeed without funding?

• What happens if the project fails?

• If the project succeeds, what happens?

• How soon can promised goods be fulfilled? Photo credit: RambergMediaImages / Foter.com / CC BY-SA

Срочно

Credibility

• Relevant experience• Appropriate education• Specific expertise• Evidence Доверие

Community

• Is there a community?• Are you a member?• Are you a leader?• Formal or informal• Does your project

match your community • How well can you

communicate with your target community?

Assessing Your ProjectRate your project on a 0 – 5 point scale for each of the four areas:• Appeal: __________• Urgency: __________• Credibility: __________• Community: __________• Total: __________

A score above 15 has high potential to reach beyond your personal network.A score below 10 is unlikely to reach far beyond your network.

Assessing Platforms Funding Model:

All or nothing: Set a goal, fail to reach it, you keep nothing Keep what you raise: Keep every dime you raise

Fees: Some sites include credit card processing in site fees Some sites charge their own fee and you pay credit card fees

directly to the processor Culture:

Every site has a culture and an audience For example, Kickstarter is exclusively for “creatives” Fundly is for cause-oriented campaigns

Start Before You Start

• The activity you see in a crowdfunding campaign is a fraction of the total work

• Start preparing in earnest 30 to 60 days before you launch your campaignPhoto credit: Foter.com /

CC BY-SA

Partners

• Your business partners should be your crowdfunding partners

• Get them committed

• No one person can carry the whole team

Fanatics – Super Fans

• People who will campaign on your behalf

• Your mom• Customers who

already love what you are doing

Photo credit: TheAlieness GiselaGiardino²³ / Foter.com / CC BY-SA

Train the Team

• Train Your Partners• Have your partners help you train the Fanatics• Teach everyone what you are learning here

Organize Lists

Partners and Fanatics Everyone prepares her own list Gather names, phone numbers and email

addresses Download list from online email provider Download list from LinkedIn

Rewards

• Nothing but thanks• Items sold at a

premium• Items sold at a fair

value or less

Photo credit: Giovanni 'jjjohn' Orlando / Foter.com / CC BY-NC-ND

Acknowledgement

• Only acknowledgement or appreciation may be appropriate for:– Small donors in any

campaign– Campaigns for causes or

charities• Technologists will

generally want to use rewards in addition

Premium Priced Rewards

• Works for:– Social entrepreneurs– Creatives– Launching a business with a compelling new

technology• Sell high-margin products– Tee shirts– Posters– Downloads– Your current and future products

Discounted Rewards

• Works for an existing business to launch a new product

• Helps to scale up demand for the first shipment

• Helps to market the new product launch

• May expand the market for existing products

Powerful Press Release

• Press releases are fairly standardized

• Use a template• A press release is a pre-

written newspaper article you give to the media so they can post it online as if they wrote it

• Use facts and figures and avoid marketing language

Photo credit: Foter.com / CC BY-SA

Targeting Media

• Each partner and fanatic should:– Identify bloggers and reporters

with whom they have a connection

– Identify bloggers and reporters who cover your “space”

– Be sure to look for national as well as local media

Photo credit: photologue_np / Foter.com / CC BY

Video

• Most important thing on your campaign page– Make an effort!

• The page is not so important to your campaign– Don’t break the bank!– Budget less than 5%

of your goal

Photo credit: popturfdotcom / Foter.com / CC BY

Fun

• Don’t take yourself—or the video—too seriously

• Have fun• You can do it

yourself

Photo credit: Rob Boudon / Foter.com / CC BY

Face

• Get someone to be the face of your campaign

• People connect with people

• Your product can’t sell itself

• You must be in the video, but you don’t have to be the face of the campaign

Photo credit: Oneras / Foter.com / CC BY-SA

You, Yes, You

• You must be in the video

• People need to know where the money is going

• They need to trust you• To trust you, they

need to know you• Introduce yourself in

the videoPhoto credit: Ava R. / Foter.com / CC BY-ND

Be Brief

• Just 2 – 3 minutes • Note that 2:59 is

better than 3:01• Seek to capture

attention quickly• Cover the key

points in the first 30 seconds

Photo credit: Earls37a / Foter.com / CC BY-SA

Take Advantage of the Media

Use powerful images You can use still images to great

effect Stills are easier and cheaper Get or find great shots Stay as authentic as possible Intersperse with your “face” and your

personal message

Create a Story

• Provide context• Explain your dream in

terms of the viewer• Identify the challenges

to realizing the dream• Show the viewers how

supporting the campaign makes their dream possible

Photo credit: Jain Basil Aliyas / Foter.com / CC BY

Call to Action

• Ask viewers to donate

• Ask viewers to share

Line Up The Big Backers

• Strategic partners• Suppliers• Distributors• Large customers• Wealthy friends and family• Target 3 to 5 who are likely to support you

Face-to-face

• You can’t raise big money over the phone or by email

• Use the phone or email only to get the meeting

• Use good manners

Work the Phones

• Every partner should work her own list

• Choose 20 to 30 people from your lists– Most likely to support– Friendly to you or

your project– Make this easy on

yourself

Prepare Talking Points

• Reading a script will seem unnatural• Prepare a list of talking points, facts,

figures, etc.– Product description– Company description– Explanation of crowdfunding– Use of funds– Rewards

• Often you won’t need the list• Over 20 – 30 calls, you’ll likely use

every point

Email—Not Spam!

• Personal email messages can yield up to 50 percent results

• Every email must be personalized

• Do not BCC all of your friends at once

• Email 50 to 150 people personal notes

• If you have a commercial email list, use it, too

Photo credit: Thomas Hawk / Foter.com / CC BY-NC

Personal Email• Start your personal list

with an email to your mother

• Take time to draft a thoughtful, honest note to her about why you need her support

• Next, write an email to your best friend

• Now take those drafts to create a template for your list

Personalizing the Message

• Personalize every email• Include a greeting with their

names• Write a short, one-sentence

paragraph to each person individually

• Send individual emails or use Word and Outlook to do a mail merge

Track the Contacts

• Keep a log of every contact• Don’t call someone twice who

turned you down!• Follow up with email reminders

weekly until they pledge online• On the first day of the campaign,

remind them to go online to pledge

• You want 50% of your total on day one (if only so you can actually get 30%)

How to Reach the Media

Do More Than Send a Release

• A typical reporter sees 200 pitches per week

• Reporters have stories they are pursuing, too

• Statistically, your chances of getting coverage are low

• If you just send your release in an email you guarantee reporters hit the delete key

How to Date the Media• Read what they write or watch

what they produce• Subscribe where they write and on

social media• Send a “love note” with the

release– Start with her name– Explain what you’ve read and why

you loved it– Note that you’ve subscribed and

followed– Pitch your story as being a good fit

for her

Give Reporters a Reason

• Explain why your story is relevant• Identify reasons the audience will care• Highlight the reasons you are interesting– A cause– New to town– Young entrepreneur– Old dog learning new tricks– Great speaker/funny

Launch the Campaign

Have a Party!

• On the first day• Have fun!• Engage as many people as possible• Make giving easy• Create incentives for using social media• Announce contests for your “fanatics”• Be creative

On the First Day

• Everyone knows the campaign is fresh

• No expectations of success

• Show big progress

Invite Everyone

• Use Facebook to invite all of your family, friends, fanatics, regular fans and followers

• Ask all of them to invite all of their friends

• Many people will receive multiple invites

• Creates a sense of a “can’t miss” event

Make Giving Easy

• Always make it easy for people to give you their money

• Encourage people to donate online using their smart phones or devices you provide

• Accept cash at the party—never turn down money!

Encourage Social Media

• Create a photo opportunity– Invite a celebrity just for this

purpose– Use a movie cutout

• Give people raffle tickets every time they tweet or post something with your hashtag

• Announce the raffle prize winners at the party throughout the event

Media: Round 2• After the launch send a second

press release• Highlight:– Success and momentum of the

campaign after only one or two days

– Talk about the party– Refocus on goals and/or the

product• Provide links to party photos• Tell the story of a groundswell of

support

Social Media

• Post daily across all of your platforms

• Post everywhere you have an audience—and on Google+

• Keep posting pictures of your lunch or selfies with bed hair

Good Social Media Posts

• Announce funding progress– People want you to succeed– The more backers you get the more backers you

get• Remind people why you are raising money– Focus on the product and its benefits

• You can never thank people too much for their money and their trust

Examples

What NOT to say:• Woot! We’ve raised

40₽ 0,000! Party time!• You should focus on

your backers not yourself

• Suggesting you’re going to party with the money is not the way to earn trust

What to say:• Woot! You’ve backed

us to the tune of 40₽ 0,000 to help us

launch our new widget! Thank you!

• Celebrates success• Focuses on the backer• Reminder of purpose• Expresses appreciation

Coordinate with Your Team

• Send an email each day to every member of your team

• Include suggested posts for all of the main platforms

• Be sure to include links to new media hits

• Make it easy for them to be active on social media

Let’s Review Your Strategy

• Phase I: Assessment• Phase II:

Preparation• Phase III: One-on-

one fundraising• Phase IV: Media and

social media• Campaign

1 2 3 4 5 6 7 8 9 10 11 12

Phase I

Phase II

Phase III

Phase IV

Campaign

Timeline in Weeks

It’s Not Over…

• Keep your team engaged

• Keep making phone calls

• Keep sending personal emails

• Tell everyone you meet about your campaign

Photo credit: HarryArthur / Foter.com / CC BY

Finish With a Coordinated Push

• Rally the team• Update the media • Have another party• Make more calls• Send more email• Big finish

Celebrate Success

Q&A

Visit devinthorpe.com/crowdall to download these slides.

You Can Do It