Small Business Saturday Blog

Crowdfunding Tips for Start-Ups

Thursday, February 12 at 08:59Crowdfunding | Start-Up Support

In the last three years, the value of the crowdfunding economy has more than tripled and by the end of 2014 was estimated to be worth nearing $10 billion in funding online. There are now over 400 crowdfunding platforms, opening up a world of investment that start-ups could only have dreamt of ten years ago. However, funding doesn’t come easy. Success rates vary from 10% to 49% of all projects depending on the platform and increasing awareness and availability of crowdfunding means, inevitably, increased competition to attract supporters.

The recent, runaway success of The Wave: Bristol campaign, led the team at London-based start-up Riz Boardshorts, who are running their own crowdfunding campaign, to consider what makes a crowdfunder work and whether it’s the optimal solution for all small businesses. Here’s what they’ve found:

1.       Be prepared – it wasn’t a Girl Guide motto for nothing you know. You might think you are prepared before you start off on the crowdfunding journey but you need to consider that, on average, 2% is considered a good conversion rate of people reaching your campaign and then funding it. Simply translated, that means that if you need to raise £1,000 and estimate most people will give you a tenner, you need 5,000 people visiting your site over the life of your campaign. Ask yourself, seriously, can you reach that many people personally, through PR or through social media? If not, might it be worth trying to grow your contact base before you launch your campaign?

2.       Be flexible – you can do as much research as you like before you start but you never quite know how your campaign and rewards are going to be received. You may need to change rewards around, find new prizes and form new alliances. The most financially lucrative rewards are the intangibles, knowledge, experiences etc, which cost you very little but they might not be what your audience are interested in – the only way to find out is to try them out.



3.       Form alliances – there is strength in numbers and working with partners who will support your campaign and promote it to their supporters is invaluable. The Riz team have had fantastic support from their charity partners in the UK – the Marine Conservation Society, Eden Project and the Wave Project Cornwall - throughout the campaign and have recently launched the “Riz Ticket” an exclusive chance for anyone who purchases a reward from their campaign https://kriticalmass.com/p/bottlestoboardshorts to win a morning session at The Wave: Bristol for three people before it opens to the public. Working with others broadens your reach as well as your appeal.



Ultimately, crowdfunding remains extremely popular for start-ups because it’s low cost, easy to access and provides a good marketing platform even if funds aren’t raised. As an example, the current UK cereal phenomenon, the Cereal Killer Café, raised just 2% of their crowdfunding goal but got masses of publicity and are now happily selling bowls of the crunchy stuff in Shoreditch. With crowdfunding predicted to go mainstream in 2015, it’s definitely worth your business, like ours, taking the opportunity. Just make sure you do so with your eyes open.

By Lou at Riz Board Shorts - http://www.rizboardshorts.com/

The Riz team would love to know more about your experiences of crowdfunding and your tips for success. Contact us on info@rizboardshorts.com. For more information on the Riz campaign, please visit Riz’s kriticalmass fundraising page: https://kriticalmass.com/p/bottlestoboardshorts

About kriticalmass: Kriticalmass powers good by enabling great ideas to access funding plus vital support from brands, passionate volunteers and social ambassadors. It is the first platform that allows organisations to join the crowd and enables project creators to access the resources, expertise and reach of companies. It was launched in London in March 2014.

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