The practice of crowd funding is exploding in interest, and being hailed by many as today's hottest new form of high-tech investment. It's easy to see why too: Anyone can launch a new product, startup or business right from their kitchen table.
Using fundraising sites like Kickstarter, RocketHub and IndieGogo, aspiring startups and inventors can essentially post project pitches online and solicit financial pledges from everyday Internet users in exchange for merchandize or uniquely personalized experiences. (In other words, no equity changes hands - a great deal for entrepreneurs, who can begin generating capital with as little as a prototype or preproduction assets, and without giving up a share of ownership.)
With the recent passage of the JOBS Act, qualified investors will soon be able to back new ventures in exchange for equity as well, making it useful to know how to crowd fund any business going forward.
But before diving into the wild world of crowdfunding, it's important to remember: With dozens of rivals competing for users' time and mindshare, you've got to connect with contributors within 30 seconds or less. Start by reading our expert guide to raising money online to pick up the basics, then consider checking out The Crowdfunding Bible, a free download online and via Apple, Nook and Sony Reader devices. Per the latter here's how to create an attention getting pitch that'll wow friends, family and potential backers.
Videos and Film Clips
A picture says a thousand words, making video pitches among crowd funders' most powerful tools for generating empathy and awareness. Important rules to keep in mind when creating presentations include:
- Research the videos featured by at least 10 successful and unsuccessful crowdfunding projects before starting. Consider why some were better than others, how successfully they communicated key message points, and how to avoid associated pitfalls. When building your own video, make sure you can convey benefits quickly, and have attention-getting visual assets to show.
- Keep videos short, simple and engaging: Grab viewers' eye within the first 10 seconds, and keep the pace brisk and engaging. Key talking points should be presented at the beginning, again at the end, and videos should not exceed 3 minutes in length.
- Make sure pitches clearly illustrate your project's unique features, benefits and upsides, and let viewers know as follows: What makes you so passionate about projects, why are you the right person/team to execute them, and why should backers care, let alone act now?
- Be yourself, and be natural and upbeat. Remember that you're selling yourself to investors as much as your project - honesty and warmth are essential. Express yourself clearly and with genuine enthusiasm.
- Rehearse your pitch until it becomes second-nature, and can be expressed concisely and with a positive, energetic attitude. As the project's chief evangelist, it's up to you to convince people to believe in your venture.
Your Project Homepage
Your project's video pitch is important, but so too is the information you post on your campaign's homepage. Want to know how to raise money online more effectively? The following tips can help you grab and hold readers' attention, and - most importantly - convince them to contribute:
- Create Catchy Headlines. Break lengthy descriptions into brief, bullet-pointed summaries divided by bold callouts to better draw the eye and make copy more digestible. Short, simple write-ups work best.
- Use Attention-Grabbing Visuals. Attractive photos do wonders to communicate message points at a glance, and spruce up a webpage's aesthetic. From arresting product shots to pictures of team members and concept artwork, use images that showcase your project's upsides immediately, and in a flattering light.
- Keep Commentary Cohesive. All descriptions and visuals should communicate one to three unique sales points that instantly encapsulate your project in observers' minds, and all surrounding messaging should speak to them.
- Ask Notable Backers for Support. Testimonials, recommendations and social media mentions from notable personalities can be powerful promotional tools. Consider asking industry celebrities for a shout out, or short video clip to underscore your points.
Key Questions That All Crowd Funding Campaigns Should Answer
- What is your project, what does it look like, and what's so unique about it?
- What is your background relevant to this project? Why should I trust you?
- How much money and time do you need to finish your project? How will use these resources? What will you do if you get more money than you are asking for?
- What rewards are you offering?
- Why is your project worth viewers' or readers' hard-earned dollars?