Crowdfunding Investment – Is It Right For Your Business?
Before you start to lay the groundwork for your campaign, you need to honestly consider whether your idea is right for crowdfunding. If it is, considering this will have helped tremendously in showing you the right approach to take. Fortunately, crowdfunding isn’t anything new, so there are tons of case studies to analyse. If you’re uncertain, you only need to search for campaigns similar to yours to figure out where you should take your business next.
Is your product/service solving a problem for customers?
Firstly, you need to aim for a gap in the market and figure out how large it is. You can do this by deciding what problem your idea will solve, and whether anyone else is doing it already. Can you do it better?
Test the waters by reaching out to friends and family for feedback. Eliminating bias is important, though, so stretching further afield with surveys and targeted Facebook ads can provide objectivity and give you an idea of what your target audience thinks (and whether you’re targeting the right people). If you can get feedback from business people and industry professionals, so much the better.
What Kinds of Products or Services Get Funded the Most?
6 out of 10 of the most highly funded Kickstarter campaigns ever were based on technology. Pebble time, the smartwatch, raised over $20,000,000. However, tech is quite far down the list when you look at the most often funded major categories. According to Kickstarter, the leader here is music, 48% of whose projects were funded successfully. Followed by art (44%), film (37%), games (35%), design (34%), publishing (28%), food (26%) and technology (21%).
Crowdfunding Investment: Learn from Businesses Like Yours
There’s no law that says good products can’t fail. These articles exist to help you avoid the pitfalls that 65% of all campaigns fall into. Before you go anywhere, take a look at other campaigns and how they succeeded. Here are a few examples.
Crowdfunding Investment Case Study: Core Collective were funded 2,056,412 with a £1,125,000 goal (on Seedrs)
They wanted to provide an alternative to your standard gym experience where you could end up being locked into a complicated contract for the use of the gym floor and half thought out classes. They provide pay as you go classes to help empower you to get not only the fitness benefits you need but also the social benefits.
It was a great investment opportunity for investors due to its relative success at a small scale. Best newcomer 2015 (Tatler gym awards). Most sociable studio 2016 (Tatler gym awards). Best new boutique studio 2016 (Pure Package awards)
They sought an investment of £1,125,000 and were overfunded to 2,056,412 They used Seedrs to do they crowdfunding campaign
View their full campaign here: http://drop.studio/project/core-collective
Crowdfunding Investment Case Study: Date Play was funded £219,570 with a £120,000 goal (on Seedrs)
The Date Play app, led by Vana Koutsomitis, sought to combine online games with online dating. Its aim was to add depth to the current dating-app ecosystem by initiating relationships through fun interaction.
Vana was a runner up in the BBC’s Apprentice, where she had already pitched her idea to millions. This gave her access to great PR and gave her a foothold with popular social media influencers. Date Play’s pitch video was informative, entertaining and demonstrated its strengths in a way that encouraged investment.
View their campaign here: http://drop.studio/project/dateplay
Crowdfunding Investment Case Study: Veeqo were funded £1,227,995 with a £1,000,039 goal (on Seedrs)
The makers of Veeqo saw a problem with the way companies fulfilled orders: interacting with multiple platforms like eBay and Amazon were time-inefficient. Their solution was to create a software that synchronised orders across all platforms, also providing detailed sales analyses. They demonstrated their usefulness with a professionally made video and proved to be a great investment. Because they had a large funding goal and were directed at companies rather than consumers, they chose to launch their campaign on the rapidly growing platform- Seedrs. With a great valuation and business plan, they surpassed their funding goal substantially. They also had great PR and videos, a brilliant marketing campaign and extensive networking with their investors.
Take a look at their campaign here: http://drop.studio/project/veeqo
Crowdfunding Investment: Conclusion
Whatever your product or service is, it needs to be polished and ready for the limelight. Make sure you can give it the time and attention it requires before launching. Ask yourself: Can I make the right PR connections? Do I know how to make a splash on social media? Do I know how to represent my products with great content? Will my product engage people’s imaginations? If not, you may want to look into building a professional team.
Whilst tech draws in the big bucks, it’s one of the categories that most seldom sees success. But remember that these campaigns failed so you don’t have to. Being aware of what can make or break a campaign can be your key to success. If you’re in music, film or games, you’re in better luck, but you’ll still have to come out fighting to find your funding.
Still don’t know if your product is right for crowdfunding investment?
We can help. Drop The Crowdfunding Studio are proud partners of Crowdcube and Indiegogo. We assist ambitious businesses in communicating their ideas, products and services with outstanding crowdfunding video production, campaign design, crowdfunding marketing and crowdfunding PR.
To learn more about us and our services, visit our website: drop.studio
Or book a free phone workshop today and ask us anything, like how to create a successful crowdfunding campaign or how to accelerate your business from zero to fully funded.
If you’d like to know how to bolster your campaign with a great business plan, see our next article