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Crowdfunding's everywhere on the web. Movies, gizmos, neighborhood projects, projects based on individual initiative, it's thrilling, in a way, to watch people fund your project, pledge by pledge. But if you've wondered how people make crowdfunding happen, well, here's what you can learn: it's not so much the concept itself. It's strategy, psychology, and a healthy dose of individual resolve.
I've watched campaigns flop with awesome products, and seen small pitches supernova way bigger than anything that could have been expected. So, here's what I would examine for anyone who wishes to attempt it right, with less pain and more chance.
In a nutshell, crowdfunding is when a big group of people donate money in support of a cause, venture, or project, with the expectation often being rewards, equity, or just the pleasure of being a participant. It occurs in four main forms:
Donation-Based: Without rewards, totally altruistic (such as medical bills or relief for natural
Rewards-Based: Backers get a product or bonus (really popular on Kickstarter).
Equity-Based: Investors get a stake in the company.
Debt Financing: You borrow money and repay it later.
For the majority of entrepreneurs and creatives, rewards-based is the way forward. It's public, it's traceable, and it's emotionally stimulating, if you are building a crowd around a project.
You don't always go with the one that you've heard the most. Trust me, the incorrect platform will destroy momentum before your campaign even starts.
What you need to take into consideration:
Kickstarter: Best suited for tangible products but all-or-nothing funding.
Indiegogo: Offers flexible funding, you keep what you raise.
GoFundMe: Great for personal fundraising or charity.
Patreon: Ideal for subscription-supported content creators, including podcasters, artists, and authors.
A student started an e-fashion clothing line on Indiegogo and hit goal in just 18 days just because the flexible funding model meant less upfront pressure. It's not so much the tools, it's the rules and culture of the platform.
It's the part that people omit. And that's how they end up failing. You simply have to:
Build Your Pre-Launch Audience: E-mail, create anticipation, make people curious. Your project and video page should say more concerning the why, not the what.
Be Realistic in Your Goal: People want open, realistic numbers. If it seems too good to be true, it probably is.
Offer Constructive Rewards: They should be stimulating, not puzzling or disappointing.
Legal Considerations: Product liabilities, tax implications, and business organization are all significant.
Before the launch, I had spoken with prospective backers for 2 months. That feedback informed all the way down to rewards and video copy, and made the campaign 10x stronger.
Here's the thing: people finance what they can see. That means you have to be everywhere, at least, on video-intensive sites.
Video campaigns make 105% more revenue compared to video-less campaigns. It's not a matter of just adding a video to your page. It's a matter of adding it in the right place.
YouTube continues to carry significant influence in this. New statistics project that creators who have more than 10,000 subscribers experience a 142% better conversion rate when they use crowdfunding videos. That is why I always tell creators to try to build their audience with some strategy, if not even pre-launch. Of the strategies that have seen me witness creators blast off, one of them is purchasing YouTube subscribers to increase your reach so you can win the people's trust before asking for a dime.
I've been there. You get all pumped up, start… and zip. It goes like this:
No pre-launch hype: Get the first 48 hours wrong, and the algorithm will bury you.
Rewards are too intricate: Backers don't have to calculate things in their heads.
You ghost your community: Updates aren't a nicety, they're a necessity.
Avoid using too much jargon: Speak human, not a pitch deck.
You lose the “why”: Emotional ties are stronger than charts or specs.
One of the campaigns that I mentored had great perks but lousy award tier names. “Gold Level Experience” doesn’t say anything. We renamed it “Signed Album + Bonus Track + Thank You Video” and the tier sold out.
Most assume the campaign finishes when the clock runs down. In actuality, that's when the work starts.
If you succeed in your objective:
Begin work immediately. Timidity will be fatal.
Communicate frequently. Backers want news even if it's "we're still working on it."
Gather feedback: This group represents your first real audience.
If you haven't achieved your goal:
Reflect but don't beat yourself up.
Connect with the donors and inquire as to why they contributed, it's a lesson.
Try again with more optimal timing, message, or rewards.
It's not always a cut-and-dry situation, but it will be more informative for you than all but a handful of projects.
It depends on your niche and audience size. Most campaigns raise between $5,000 and $50,000, but those who prepare ahead and engage their communities can go beyond that.
Yes, but it’s harder. You’ll need to do more outreach via email, local communities, and partnerships to make up for the lack of online exposure.
Many successful creators treat crowdfunding as a launchpad, not a one-time shot. If it works once, it can be part of your long-term business model, just keep your audience engaged between campaigns.
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