Crowdfund Campaign – What is it?
A crowdfunding campaign is essentially presenting your product or service that you want to launch on a crowdfunding platform for the world to see. Your campaign must provide information about the organisation and provide a better view of the business for potential investors. When assembling the pitch materials together, the campaign has to be easy for contributors to digest. Instead of explaining the campaign on huge blocks of text, visualize as much of the information as possible. Use charts, infographics, and timelines to present your budget, schedule, or product comparison.
A crowdfunding campaigns main focus is to allow a business to increase their awareness about their brand. The campaign gives investors a very clear understanding of what the product or service is, what problem it solves, how it compares to other product or services on the market, and why it’s important to them. Crowdfunding Platforms such as Crowdcube and Indiegogo have thousands of potential investors on their sites, who are always looking to invest in new projects. These platforms exist so supporters can find new opportunities, interact with the creator and share the campaign that they are going to invest in.
Crowdfund Campaign – Types and Platforms
There are various crowdfunding platforms that can be used. However, we are going to give you a brief overview of the most common and used platforms for Reward, Equity, Donation and Lending based campaigns.
Reward-based Campaigns – The main platforms used for this type of campaigns are: Kickstarter and Indiegogo. Most frequently, these platforms have a list of products, services or projects allowing the investor to pledge an amount of money for a reward, aiming the unique rewards at the largest investors and early bird backers.
Kickstarter is a funding platform for creative projects and one of the world’s largest crowdfunding site, and Indiegogo is an international funding platform for ideas, startups and charity. For both of these platforms, campaigns can last up to 60 days but the average for Kickstarter is 30 days and for Indiegogo 44 days. Reward-based campaigns agree that investors will receive a reward in return for some investment. This encourages individuals to pledge in a campaign knowing they will receive something in return.
Equity-based Campaigns – The main crowdfunding platforms used for this type are Crowdcube and Seedrs. With no exaggeration, equity is the most complicated of the crowdfunding types, facilitating investment into a startup, early stage and growth companies for some equity shares in return. The investments can be as little as £10 with no maximum limit, which results in proportional ownership of investee’s company via A or B investment shares.
Crowdcube is the UK’s leading equity-based crowdfunding platform for entrepreneurs and big-scale start-up projects, and Seedrs is an equity crowdfunding platform used around Europe, helping startups and late stage businesses. On average Crowdcube campaigns last around 30 days and Seedrs campaigns last around 14 days after the private launch. However, both Crowdcube and Seedrs campaigns can go up to 60 days maximum. Equity-based campaigns offer the investors equity (a share) of the business in exchange for investment. Individuals invest in equity-based campaigns to benefit in the long term.
Donation-based Campaigns – The main platforms used for donation based campaigns are GoFundMe and JustGiving. Donation-based platforms structure has many similarities with Rewards-based, but what differentiates the two is the altruistic element. Therefore, people pledging or backing are typically donating without the expectation of receiving anything in return. All they receive is the satisfaction of donating to a worthy cause.
GoFundMe is the #1 fundraising platform online with a for-profit crowdfunding structure and JustGiving is a global social online platform for charity giving. The duration is not as important for both platforms but there are deadlines to be met. With GoFundMe, the first withdrawal must take place within the 30 days receiving your first donation or your campaign will stop accepting new donations. And with JustGiving, your campaign page will expire 3 months after the charity event has taken place.
Lending-based Campaigns – The main platforms used for lending-based campaigns are LendingCrowd and FundingCircle. The platforms enable investors to lend to individuals that are crowdfunding a certain amount of financial resources, to be paid back with annualised rates of between 2% and 6%, although these fluctuate with interest rates changes. You can authorise platforms to invest on your behalf across a diversified number of borrowers, as the maximum lending term is five years with around 6% return.
LendingCrowd is an online peer-to-peer crowdlending site, giving support to small and medium-sized businesses, and the FundingCircle a peer-to-peer lending marketplace, allowing investors to make direct lendings. In matters of duration, for LendingCrowd you can borrow money from 6 months up to 5 years and it takes 1-3 days to process loans. For FundingCircle, once a campaign is 100% funded, it will close and if it has been funded before 3 pm on any working day, the loans are sent to the business on the same day. If that is not the case, funds will most likely take 3 days to reach your account.
Crowdfund Campaign – What is it made of?
A crowdfunding campaign is usually made of supporting components which will help you spread awareness of your idea or project. The common assets of a crowdfunding campaign are pitch, video, email marketing, social media content and reward options if it corresponds with the campaign type.
Your campaign is what represents your project and shows people why they should care and invest their time and money on it. Using the SUCCESs model to help develop quality content would be a great start. It should give you a clear picture of the approach to take with your crowdfunding campaign. It goes as follows:
Simple – Find the core of any idea
Unexpected – Grab people’s attention by surprising them
Concrete – Make sure an idea can be grasped and remembered
Credible – Give an idea believability
Emotional – Help people see the values and importance
Stories – Empower people to use an idea through narrative
While having a visually appealing crowdfunding campaign, it must be essential and informative. Here are the key elements to remember when building your campaign.
✤ Have your website up and running: Before you start composing your ideal campaign, you must have your website launched. You’re going to have a lot of links and visitors. Try to grab that attention on a platform owned by you, for better SEO and to solidify a following. Use your website to help build an email list.
✤ Have a captivating and clear campaign title: keep it simple yet intriguing, use relevant keywords to help people find your campaign with ease, be direct with your main call to action.
✤ Set your funding goal: It is important that you have your funding target set before you launch your crowdfunding campaign.
✤ Use eye-catching campaign card image: use close-up shots of individual or team or of the product which stands out, make your product and idea clear and use colour to help with the aesthetics.
✤ Set up a campaign timeline and schedule: have time to prep – 60 days is often a great start, plan the campaign for about 30-45 days, have time for funding disbursements – typically 15 to 30 days, use holidays and seasonal trends to add more momentum to your campaign.
✤ Produce a compelling and share-worthy video: Keep it a simple format, easy to follow. Aim for 3-5 minutes telling your story. Include: Introduction, Goals, Showcase of examples, Call to action. Tips: ensure the video has high-quality sounds, testimonials and yourself or team.
✤ Campaign page tells a story: Have a clear and interesting format that best represents the product. A colourful and high-resolution header image captures people’s attention. Your pitch includes your campaign summary, your business/product highlights, your idea and your team sections. Make sure to include links to your website and social accounts.
✤ Relevant use of perks: Whether it shares they are going to receive or rewards, make your perks clear and well-planned to help raise your brand awareness. Communication is key, therefore you must inform your audience of the type of perks you offer and how long they last.
✤ Set the length of your campaign: Map out your campaign timeline and set the length you want your campaign to be. Most successful campaigns are run for between 30 to 40 days.
How Drop can turn your idea into a success story
- Immediate feedback on whether your business is suitable for crowdfunding
- Access to Drop Studio’s Crowdfunding Accelerator Service – available for Crowdcubeapproved campaigns only
- Crowdfunding strategy and planning
- Marketing strategy and marketing content – social media posts, ads, emails
- Management of social media profiles, ads and email marketing
- Crowdfunding video production – treatment, script writing, filming, editing with animation, promotional content
- Ongoing crowdfunding support throughout the whole campaign