Funding is one of the tallest hurdles of getting any type of enterprise off the ground, for instance, if your future business strategy is to buy cheap bulk candy for wholesale and sell it at a profit. You can try courting venture capitalists and investors, but with little to no entrepreneurship experience, the odds of securing the funding you need are slim. Talking to the bank, friends and even family to lend you the money is also an uphill task – in most cases.
Since you are a budding entrepreneur in the vegan confectionary industry, what should you do? One of the best options is crowdfunding. Launch a crowdfunding campaign and validate your business idea in the process. Here are three tips on starting a crowdfunding campaign.
Make Presales For Success
Crowdfunding is putting investment and funding in the hands of the masses. For example, the granite plinth that the Statue of Liberty stands on was purchased with funds people donated in 1884. In 1713, the translation of Iliad from Greek into English was made possible by selling advance subscriptions to the public – a funding project that took an amazing seven years to complete, with one volume being released each year.
The same characteristics are also carried over into today’s crowdfunding as project creators tap into their pool of previous backers for funding new projects. Through crowdfunding, such as Plumfund, not so serious projects to practical ones can receive funding. The spectrum of what types of projects can be funded is virtually endless, but getting this funding is not as easy as it sounds here.
Not All Campaigns Are Successful
It might seem counterintuitive to mention this, but not all crowdfunding campaigns succeed – in fact, not getting the funds may be a good thing! This is important because it helps you know when to push ahead and when to give up on your idea and come up with a different one.
Through platforms, only 40 percent of the approved campaigns get funds. Another 20 percent of the submissions are rejected outright, and only a third of all crowdfunding campaigns actually get funds.
You have to prepare yourself for failure – to some extent. There is a lot you can learn from it, but the most important thing is that you get raw data you can use to make adjustments for your future campaigns. While you should never aim to fail, you should adopt the mentality that there is nothing to lose – because there isn’t, and you can always try again.
Avoid The Long Game
Many would think that running a long crowdfunding campaign increases its chances of being funded. However, the longer your campaign is, the less likely you will hit your goals. In fact, a high percentage of donations for a crowdfunding campaign come in during the first few days, followed by a lull in momentum, and then followed by a peak in donations during the last days.
Set your campaign to run for 30 days, and you will reduce the lull length between the initial and the final peaking periods of donations. This will help you get the funds you need to start the production faster.
Make no mistake; running a crowdfunding campaign takes a significant amount of work. Nevertheless, if you want to get into the business, and be serious about it, be ready to put in the energy and time required in promoting your project. The key thing here is to learn from your mistakes and apply the lessons learned into the next campaigns.