Crowdfunding

As crowdfunding takes off, with more entrepreneurs funding their next enterprise or project by asking for money online, a new industry of crowdfunding consultants has emerged.

These are individuals and startups who advise nonprofits, musicians and artists launching a crowdfunding campaign, offering them tech expertise and guidance on promoting their campaign. Recognizing the potential of crowdfunding — which has been used to back everything from 3D printing to rap albums, commercial real estate, smart watches and documentaries — consultants have seized on this blossoming new sector.

Crowdfunding is the practice of funding a project or venture by raising many small amounts of money from a large number of people via the Internet. Popular crowdfunding platforms include Kickstarter and Indiegogo, although the sector has expanded to include many more. Crowdfunding originated with friends and family giving to a project, but today, hedge funds managers and real estate investors are also getting involved. Crowdfunding even has its own reality TV show.

One startup entering the world of crowdfunding consulting is PitchTop, a fledgling firm that is part of a New York incubator and offers Web tools to help nonprofits and artists launch successful crowdfunding campaigns. PitchTop, which is still in closed beta, uses online data, social networks and historical crowdfunding stats to determine the best ways to attract donations from friends and strangers, and gain exposure in the press and through social media.

“Planning a crowdfunding campaign is excessively difficult, especially for people who need to focus so much of their time on their craft,” said PitchTop co-founder AJ Magnuson.

Bryan Kim, who consults with musicians on their crowdfunding campaigns, said the people who most need to raise money often aren’t the most savvy at crowdfunding.

“There are a lot of artists who are thinking about (crowdfunding) and have no idea how to do it,” Kim said. “At the end of the day, the only thing they should worry about is if the song is good.”

PitchTop is testing its Web tools with the Scholastic Interest Group, or SIG, a nonprofit that helps at-risk young men and boys from San Francisco prepare for college and a career by offering them mentoring and life skills, often taught through athletics. Using PitchTop’s Web tools, SIG is aiming to raise $15,000 to buy a van. Founder Malik Wade, who started SIG to help youths avoid the troubles he endured as a young man, said the organization needs a van to transport students to college campuses in the Bay Area. Wade has only a compact car; not nearly large enough for the 12 students he wants to bring to UC Berkeley, Stanford and other colleges for tours and fairs. The young men are all from disadvantaged families and don’t have access to a car, Wade said.

“When I take them to a college it’s just to plant a seed,” Wade said. “These kids don’t get to go to stimulating environments. They normally don’t leave their neighborhoods; they don’t leave San Francisco. Visiting colleges may stimulate some ambition.”

It looks like he may get that van. With eight days remaining, SIG has raised more than $14,500, or 98 percent of its goal. Wade credits PitchTop’s Web-savvy and marketing know-how for the success.

“With the crowdfunding campaign, there was a lot of tech work that needed to be done behind the scenes,” he said.

SIG will be accepting donations through Dec. 12. Visit the crowdfunding page to make a contribution. There are lots of perks for donors — T-Shirts, gift certificates and concert tickets — that are part of PitchTop’s approach to soliciting donations.

Wade, who started SIG two years ago, runs the organization on a shoestring budget. He’s raised $80,000 through grants and private donations, and the money goes to feeding the boys and running programs and workshops. He also hopes to buy workout clothes for the young men, who play basketball and football with Wade, part of their life-skills training at SIG.

“It’s been a challenge, but I have a vision, so now it’s just a matter of securing additional resources,” Wade said.”

Completing the crowdfunding campaign would not only be a boost for SIG, but also it would help validate the emerging sector of crowdfunding consultants.

“When people come to us, they are already motivated to hit their goal, and they just need guidance or tools to allow them to do that,” Magnuson said. “This past year, we’ve seen many innovations in crowdfunding, and we expect to see more of that going forward.”

Creating a pre campaign marketing strategy is absolutely critical to the success of your crowdfunding campaign. Oftentimes, crowdfunding campaign owners find that they are not getting the level of success that they are looking for when they launch their campaign. This is because of a lack of enrollment from their following, family, friends and other connected influencers.

LANDING PAGE

You need to start your campaign pre marketing almost 3-4 months in advance of your campaign. Build a simple website that shows your project and make sure to have a place where people can sign up with their email address in order to get updates. Keep the communication flowing with them and get them excited about the launch of your campaign so that they are compelled to fund your campaign during the most critical first week of the campaign.

SOCIAL MEDIA

Whatever Social Media that you know how to use, whether Facebook, Instagram or something else, stick to it and do it well. Get people to start going to your website and don’t be afraid to do an ad that starts to direct traffic to the website.

PRE RAISE

We typically recommend having about 40% of your campaign funded before you even launch. By having conservative goals and by having funding secured well in advance of the campaign launch you are ensuring your success of the campaign.

OTHER NOTES

Remember that a good campaign is hard to launch. There are a lot of elements that go into the strategy before, during and after the campaign. Preparing the right video, pictures and graphics can be a daunting task. By hiring the IGNITE Agency, you’ll increasing your chances of campaign success tremendously. We will welcome you into our network and will create a world-class crowdfunding campaign for you.

I look forward to your crowdfunding campaign success! 🙂

The elements of a successful crowdfunding campaign are often so intangible, that they often go unnoticed. The highest dollar raised campaigns on rewards-based crowdfunding are what we like to call, “unicorns,” because they are increasingly rare. The odds are that you simply will not raise millions of dollars without an air-tight plan and world-class execution by a professional agency that can get you the exposure necessary for that level of success.

Before I explain the three elements I want you to consider your product or service and think about what you would spend to acquire a customer. Then identify the average lifetime value of that customer (the total amount that they spend with you over time). If launching your crowdfunding campaign will be a way to get those first customers, then understand that the cost of acquisition of your first customers / clients is going to be roughly 5x that of a company with an established base in traditional advertising / marketing. That number is based on our experience in the industry. A successful crowdfunding campaign comes in at nearly half of that total cost because of the inherent viral nature of the internet and crowdfunding campaigns in general.

1. LOWER YOUR GOAL

I see campaign owners with £250,000 goals all the time. What they don’t seem to understand is that you will not hit that goal unless you’re coming in with at least 40% of the money raised on day one from friends and family. If you’re aiming to raise £250,000, you want to consider a £25,000 goal and then hit it as fast as possible and then raise beyond that goal. What happens is that a psychological trigger of “joining the party” and “fear of missing out” incentivizes more people to make more pledges and contributions.

2. EARLY BIRD SPECIALS

Encourage your early contributors with steep discounts through early bird specials. Set limits to the amount of perks or rewards at that level and let it sell out. It creates a scarcity model which is essentially economics 101 and will drive up the cost of your perk / reward prices and perceived value.

3. PRE RAISE 20-40% OF YOUR POSTED CAMPAIGN GOAL

By pre-raising 20 – 40% of your posted goal, you’re ensuring that others will believe that you will have a successful campaign, thus increasing confidence in your campaign. Oftentimes, you need to spend upwards of 60+ days before the launch of the campaign to pre raise the necessary amount of money from friends, family, colleagues and your online networks.

If all else fails, we’re here to help. Just shoot a message at hello@mousuf.co.uk.

This article originally appeared in Ryan's Forbes Blog

I don’t crowdfund. I invest in consumer products companies. For true investors and those who focus on maximizing returns and managing risk — this is an important distinction that I think many people overlook in enthusiasm for crowdfunding. Not all platforms are created equal. From my years as a private equity investor and as the founder and CEO of an accredited investor crowdfunding platform, I think recognizing the difference between investing and crowdfunding is crucial.

At last count, according to crowdsourcing.org, there were around 400 crowdfunding platforms around the world – but you likely cannot list more than five. Just because crowdfunding takes place on these sites does not mean that investing is happening on most of those platforms. Crowdfunding platforms supported more than a million campaigns in 2012 that raised $2.7 billion, an 81% increase from the prior year, according to research and consulting firm Massolution. That’s a lot of money. The trouble is crowdfunding is a broad term covering (1) donations and sponsorship where the contributor expects no financial return, (2) lending and (3) investment in exchange for equity, profit, or revenue sharing. So to say you are a crowdfunding site is not very telling.

Now that we are several years into the crowdfunding wave, we are seeing, first and foremost, the proliferation of platforms. But, more importantly, we are witnessing the growth and success of those platforms that have a clear focus.

Crowdfunding is a vast category, but I believe the sites that win will be those that are focused on what Union Square Ventures partner Andy Weissman calls “point solutions.” These are the platforms that are not all-encompassing marketplaces that crowdfund anything, but rather those that are highly targeted.

Kickstarter is one examples of a focused, successful platform. Kickstarter enables you to back an early-stage project you love: Projects like the Veronica Mars movie or the $299 3-D printer for consumers that hit its Kickstarter goal of $50,000 in 11 minutes and in three days had raised more than $1.5 million. During the first quarter of 2014, Kickstarter averaged $1.2 million in pledges daily, and almost 4,500 projects reached their funding goals. By making it easy for passionate, smart creators to connect with people who are equally passionate about supporting cool projects, Kickstarter has become a dominant community with more than $1 billion pledged since it launched in 2009.

I find it interesting that the first two non-profits embraced by Y Combinator were crowdfunding platforms, and both are very focused: Wadsi, funding medical treatments in developing countries, and Zidisha, a person-to-person micro-loan network for enterprises in developing countries to attract funding from investors.

When it comes to crowdfunded investing — whether you want to lend funds or make private equity investments — point solutions appear to be the clear winners.

Crowdfunded investing could be a $2.2 billion to $5.5 billion market, according to estimates from UC Berkeley’s Fung Institute for Engineering Leadership. That’s assuming that it is just 1 to 2.5% of the current combined value of angel investments, small business lending, and entrepreneurial  and  small  business  venture funding.

The success of Lending Club is a great example of how investors benefit from a point solution.  By focusing on linking consumers who need loans to investors who desire attractive returns, Lending Club has, in just seven years, facilitated more than $3.8 billion in consumer loans. Having proven itself with consumer lending, Lending Club is now adding small business lending. This is how the successful crowdfunding platforms will evolve: by addressing a specific problem or gap in the marketplace, providing a solution that benefits investors and entrepreneurs, and then extending their product line as they gain scale.

Just as in crowdfunded lending, accredited investor crowdfunding is taking off as more investors understand the powerful network effects of an online platform. The most successful accredited investor platforms will have a focus, such as enabling investors to create a diversified portfolio in consumer products companies.

I think Union Square Ventures’ partner Fred Wilson was spot on when he estimated Americans will ultimately invest 1% of their investable assets through crowdfunding, which will make this a $300 billion market. The potential for attractive returns may be available for those investors who do research and utilize the expertise provided by point solution platforms. That said, realize that these investments are risky, illiquid, long-term investments.

Five Best Practices in Nonprofit Crowdfunding by Robert Wu

At CauseVox, We’ve helped thousands of people and nonprofits all over the world crowdfund for nonprofits and social good projects. In the early crowdfunding days, I helped launch a crowdfunding campaign with the American Red Cross and SXSW that raised $120,000 in 10 days.

Nonprofit crowdfunding is changing the landscape in online fundraising. As more and more donors are being exposed to crowdfunding for products and services, they’ll expect your fundraising to shift towards those approaches as well.

Here are five best practices that I’ve learned along the way that you need to follow in order to crowdfund successfully for your nonprofit.

 

1.  Start with a measurable goal

Your goal aligns your team and supporters with your crowdfunding campaign. You have to find a balance between what is within reach and what is an aspiration. If you’ve fundraised online before, ask yourself a few questions to get a baseline of what is achievable.

  • How much have we raised online in the past year?

  • What is the average amount that we have raised in a campaign or event?

  • What is the average donation amount online for us? (it’s $88 for in crowdfunding)

If this is your first time with crowdfunding, you can ask yourself:

  • How much do I need to make an impact?

  • How much does the product or service that I want to create cost?

  • How much did similar crowdfunding campaigns raise?

After you think through these questions, create a well defined goal that follows the SMART framework: specific, measurable, attainable, relevant, and timely.

2.  Rethink Rewards and Donation Tiers

Rewards are items, recognition, or a service that you’ll get for contributing a crowdfunding campaign. They are also known as perks or gifts, and are used as incentives to motivate people to support a campaign.

But studies have shown that rewards for donations may actually reduce giving.

The Yale researchers George Newman and Jeremy Shen, found that contrary to expectations, rewarding donors cut donations in most situations. In a nutshell, donors that received a gift, felt selfish, which in turn reduced the motivation for giving.

Instead, you should focus on impact-focused rewards.

An example of impact-driven fundraising gifts are hand-sewn scarves from a family who started a local business as a result of your donor’s micro-finance loan or a personal letter from a child who you sponsored for her education.

Impact-driven fundraising gifts are an all-around win-win because it matches both the donor’s motivations to give and the tangible impact on the one who received it.

3. Create a sexy story

You know that compelling stories get you donations, sharing, and publicity, but you’re probably thinking — “I don’t have a sexy story” or “I don’t know how to tell a compelling story”. It’s actually easier than you think to create one that works.

You have all the ingredients for a sexy story, but how do you get the recipe? Just look at Hollywood, and think back to all those movies and TV shows you’ve watched.

There are four classic storylines that perform really well with nonprofit crowdfunding:

  • Overcoming the monster – Similar to James Bond, Batman, or the Avengers, you can show your organization overcoming a villain or some form of adversity. For example, Earthrights International fights against corporate human rights abuse. They raised $20,000 with this storyline.

  • Rags to riches – Like Chris Gardner in Pursuit of Happiness, showcase your organization or individual(s) transitioning from a low to a much better place. For example, Project Renewal helps homeless people get off the streets. They showed Harry Dickerson reclaim his life from homelessness on their Giving Tuesday campaign and  raised over $70,000 with this storyline.

  • Quest – Like Lord of the Rings, tales of a dedicated group of people who encounter perils along the way to reach an ambitious goal can be highly engaging! This storyline is best used as a part of peer-to-peer fundraising, where the individual can share their story. For example, a group of friends shared stories of their beard-growing journey to raise funds for breast cancer research. They raised $28,000.

  • Tragedy – In Breaking Bad, Walter White dives into the world of making meth. He falls into something bad and gets more and more evil each day. You can focus on the negative as part of your storyline. For example, I raised$120,000 for Japan disaster relief by showing how the tsunami destroyed cities and displaced communities.

You can use these storylines to frame your story and get your crowdfunding campaign the attention it deserves. At the end of your story, put in a call-to-action so that the reader/viewer can know how to help.

4.  Build a tribe of champions

Contrary to what you may assume, you can’t launch a crowdfunding campaign by relying on the crowd. You’ll need tocultivate a tribe. Start with a list of 100 people that you know and would be willing to take action and put them in three buckets:

  • Promoters – People that will share your campaign and updates via email, social media, etc. They’ll amplify your reach. Think of them as your own publicity team.

  • Fundraisers – People that will help solicit for donations viapeer-to-peer fundraising. They’ll create a mini-crowdfunding campaign through personal fundraising pages. On average, we see about 50% of crowdfunding campaign funds come in this way.

  • Donors – People that will contribute to your campaign.

Give each bucket a role and goal so that they know how and when to help. Some people can take on multiple roles if they’re high up on the engagement ladder.

In my crowdfunding campaign at SXSW, we were able to get the campaign into CNN, WSJ, NYTimes, and dozens of other press and media outlets.

 

Even though this drove an incredible amount of traffic and donations, not all crowdfunding campaigns should invest their time in trying to find press coverage. Here’s why:

 

  • Finding the right journalists can be hard. If you don’t have a relationship with them already, then the chances of them writing about you are lower.

  • Your campaign or cause has to be newsworthy. Journalists look for stories that follow a broader trend or that are in their beat.

  • Getting publicity may not yield significant donations. Even though you can get tons of awareness and traffic, they may not be the right audience that will fund your campaign.

Now, if you do decide to go the publicity route, here are the three steps to getting press.

  1. Target – Use free tools like Twitter Search to find journalists that have an interest in your area. Jot down their contact info (Twitter handle and email address).

  2. Prepare – Ask yourself, why is this newsworthy? Why would the journalist want to write about me? Why would her audience want to read the article? Come up with a press release and pitch materials based on your newsworthy story.

  3. Pitch – Contact the journalists that you’ve identified, tell them your story, and give them more info about your campaign.

Additional Best Practices

Getting started with crowdfunding is easy, but doing it right can be a challenge. You can learn more details on how to launch a nonprofit crowdfunding campaign. Download our free ebook on planning a crowdfunding campaign today!

Rob Wu is the CEO of CauseVox, a crowdfunding and peer-to-peer fundraising platform for nonprofits.

Edinburgh-based crowdfunding platform ShareIn today said it will launch the world’s first fundraising drive to allow Chinese investors to buy shares directly in an unlisted UK firm.

The plans were unveiled at the World Crowdfunding Conference in Guiyang, China, where BOP – ShareIn’s partner in the country – said the cross-border campaign will kick off next month.

Earlier this year, ShareIn – based at the CodeBase technology incubator in Edinburgh – teamed up with consultancy BOP to target a slice of the potentially huge Chinese market in the wake of new regulations aimed at encouraging more investors to back start-ups.

Conor Roche, associate director of BOP, said: “This is an exciting new development in global crowdfunding. We are opening up boundaries between the UK and China.”

The move coincides with the state visit to the UK by Chinese president Xi Jinping, who has said he was “deeply impressed by the vitality of China-UK relations”.

ShareIn chief executive and co-founder Jude Cook said China has the fastest-growing crowdfunding industry in the world, with funds raised this year expected to reach $6 billion (£3.9bn), double last year’s figure of $3bn.
“This is a fantastic opportunity to really open up financial trade routes between the UK and China,” Cook said today, adding that ShareIn recently ran the first crowdfunding campaign for a company looking to raise funds over its own website in the UK and US simultaneously.

Cook said: “ShareIn has aimed to get a slice of two of the greatest economies in the world. We have successfully completed a cross-border campaign with a partner in the US and we will now do the same in China.”

In May, ShareIn secured a $1 million investment amid plans to shift its focus towards helping companies raise cash ¬directly from investors. Since launching last year, the site has already enabled a range of firms to meet their fundraising goals, including 3D display specialist Holoxica and Parkure, which is seeking a cure for Parkinson’s disease.

 

www.ukcfa.org.uk

Abundance has achieved a number of firsts in its three-year life since the first project launched.

We were the first to offer peer-to-peer investment from just £5.

We were also the first debt peer-to-peer company to be authorised and regulated by the FCA – and subsequently setting the standard for the industry today.

And now, we’re the first to launch our own pension, a Self Invested Personal Pension (SIPP) in partnership with European Pensions Management (EPM) for investing solely into projects that generate something good for the environment and society, as well as a long-term retirement income.

Having heard from our customers that they were keen for somewhere positive to put their pension savings, we decided to see whether the rest of the population was looking to do the same.

A lot of them are. We commissioned OnePoll to carry out an independent survey in early October, and these were the key findings:
• Almost half of UK adults (47%) are concerned about the effect of global stock market shocks on their pension
• Accordingly, 44% are interested in pension options that reduce exposure to stock markets
• One fifth of people (21%) would save more into their pensions of they knew exactly where their money was going

The pensions industry is huge. Total funds held in UK pension schemes were a staggering £2,400 billion in 2012.

If peer-to-peer and crowdfunding can address the concerns of half the UK’s pension savers by providing pensions where they can keep some of their money away from stock markets, the rewards are obvious.

Not only for our industry, but also for customers.

It’s a win-win.

The crowdfunding and peer-to-peer industry is already well-established and growing fast. Offering mainstream financial products such as pensions does two things:
• It provides repeat customers, and repeat reinvestment, for very long time frames – up to fifty years, perhaps more
• It also proves our industry is ‘coming of age’. In a virtuous circle, if we offer these products, and people choose them, and we continue to provide a high level of service and attractive features and benefits, more people will choose them, which means even more recognition of the good in alternative finance

And for customers?

The Abundance Pension has some of the lowest fees in the industry.

We’re being totally transparent with customers about how much they need to make it worth it (so they aren’t paying more in management fees than they’re earning in a year).

Customers get to choose and see exactly where their money is going, and how it’s earning them a retirement income.

And, importantly, as the survey found, it’s a way for people to save some of their money outside the stock market, and thus protect it from the day by day volatility and periodic shocks.

Roll on the Positive Pensions revolution!

Risk warning
The Abundance Pension is a self-invested personal pension (SIPP) provided by European Pensions Management (EPM), who are authorised and regulated by the FCA (461099). Setting up an Abundance Pension involves entering into a SIPP contract with EPM to hold Abundance Debentures. Abundance is not a direct pension provider and cannot give pension advice.

At the very core of a crowdfunding campaign is a story. Most good stories told with video start out with a script. A good story has a beginning a middle and an end. You know when you’ve just witnesses a good story because it leaves you riveted and at the edge of your seat, or time flies right in front of you and before you know it, two hours has past. Hollywood has been doing it since the beginning of time — think back to some of the greatest movies you’ve ever seen and recount the thrill that comes from a great story.

Crowdfunding campaign stories are a little different though. The storytelling method that you are most used to is being entertained after you pay money for it (or stream online for free). In that case you pay for the story before you actually witness the story. In crowdfunding, the method that you need to wrap your head around is giving someone the story before they pay for it.

THE BEGINNING  / Present the Problem

The beginning of a typical successful crowdfunding video begins with a sizzle reel that showcases the product or company you are seeking funds for. Think of this as a mini-commercial and way to grab your viewers attention. Our studies show that you have about 15 seconds to grab someone attention. You have about 1 minute and 30 seconds before the viewer gets too bored and usually before the first minute is up, a viewer has made the decision whether or not they would seriously consider giving you money for your product or company or cause.

Don’t forget to present that problem that you are solving in the beginning of the video.

THE MIDDLE

Use cases. You want to make your product as tangible as possible through the video. Show it being used in different scenarios or describe all the ways that your business helps and solves problems. You’ll also want to begin to present the solution to the problem that you presented in the beginning.

THE END

Finally, you’ll want to present the solution to the problem you’ve presented in the beginning and touched on during the middle. Typically successful crowdfunding campaigns at this point present their founders, inventors or a spokesperson for the brand or product.

NOVELTY

Get creative and think of some out of the box things to add to your campaign video.

WRITING THE SCRIPT

It doesn’t need to be hyper-professional. A few talking points and an outline is realistically all that you need to get started!

Want help making a professional crowdfunding video? Contact me on hello@mousuf.co.uk

Intelligence from the world’s leading crowd finance data source, Crowdsurfer, confirmed this week that Crowdfunder is the largest crowdfunding platform in the UK, having closed more projects than any other UK platform in the last ten months.

According to Crowdsurfer’s data, the rewards-based platform has completed 2,400 successful projects to date in 2015, more than double the next 21 UK rewards platforms combined. (Period: 01.01.2015 – 28.10.2015).

Emily Mackay, CEO of Crowdsurfer, comments, “The amount raised by UK crowd finance platforms has increased significantly in 2015 and many business, individual, creative and philanthropic endeavours are benefiting from this. Congratulations to Crowdfunder on its achievements so far. We look forward to its continued success as the industry continues to expand in 2016.”

This week Crowdfunder is launching it’s own equity raise on Crowdcube, the world’s leading equity crowdfunding platform, to raise £1million to expand the business.

Phil Geraghty, Managing Director of Crowdfunder said: “Since 2012, we have grown Crowdfunder by a factor of 10, and become the UK’s #1 crowdfunding platform*, working with more projects in the UK than any other platform – raising over £10 million for thousands of businesses, social enterprises, charities and individuals across the UK.

“Although the equity platforms may fund-raise for much bigger sums of money, we are working with many more projects, including more grass roots projects and startups. We currently have 975 projects looking for £12.4million on the site, this investment would enable us to turn more of those ideas into reality.”

Crowdfunder’s unique and proven business model connects people and projects to partners who can offer them funding and support. Current Crowdfunder partners include JCDecaux, Virgin StartUp and Not on The High Street.

Last year Crowdfunder, raised over £500,000 in three hours from 367 investors, including Nesta, Creative England and founding investor, Plymouth University.

Rob Love Chairman said: “Since 2012, we grown by a factor of ten. With this investment, we want to grow the company by six times, and help over 150,000 projects across the next three years. By the third year, we’d like to be raising over £100million for projects across the UK.”

The crowdfunding campaign has been launched on Crowdcube.com, the world’s leading equity crowdfunding platform and you can find out more here: www.crowdfunder.co.uk/invest

CrowdFund Buzz is one of a growing number of crowdfunding consultants to provide campaign management services to crowdfunders.

As any service provider or former contractor knows, it is almost impossible to make all of your customers happy all of the time. This could be especially true in the world of crowdfunding project management, where the expected ROI is sometimes measured in the tens or hundreds of thousands of dollars.

Having said that, a recent thread on CrowdFundingForum sheds some light on one campaigner’s experience in hiring CrowdFund Buzz to provide services during Jacques de Vos’s campaign. One screenshot tells his side of the story.

crowdfund buzz

Almost 6,000 referrals to his campaign resulting in zero contributions. The campaignseeked to fund a “photographic and film study on the impact dive tourism has on dive sites.” It ended with £578 raised on a £6,000 goal. de Vos claims he spent £98 in consulting fees with Crowdfund Buzz, although he was eventually refunded his money.

crowdfundbuzzOthers piled on with stories of bad experiences, lack of communication and a lack of success. CrowdFund Buzz founder Matt Cooke hopped into the thread to address these assessments.

Not every crowdfunding campaign is going to be successful. We do everything we can to give our clients the best possible chance to attract the type of press and media coverage that can help them hit their goal. We do this at a budget most crowdfunders can afford. We understand that most people are crowdfunding because they need funds. They cannot afford to invest £3,000 on PR and Social Media. We have developed strategies that help us get our clients very good exposure and traffic at a reasonable price.

We have had issues in the past with finding quality press release writers who can deliver a high quality press release for the budget we need to hit for our clients. In the last two weeks we have completely overhauled our writing staff. This overhaul caused us to be a couple of days behind schedule for a few of our clients. Ashtyn was one of these clients. I was his account manager and I should have done a better job of communicating the delay to him.

Cooke later shares that the outfit has serviced over 1,500 campaigns in the last six months, having driven over 4.5 million people to Indiegogo projects and even more to Kickstarter projects. We’ve reached out to the team to try and secure one missing – and extremely important – statistic: how much cash those referrals have resulted in for campaigns.

The Crowd

There is good with the bad and the ugly here. The good is that by and large crowdfunders seem to be approaching the project marketing services space with their own interests in mind, which is important in and of itself.

Shane Liddell of Smart Crowdfunding LLC explained that some seemingly expect £98 spent with any campaign outreach service to magically result in a successful campaign. He says it isn’t that easy…

Does investing £98 in a marketing/promotional service = hundreds of £’s in contributions? Of course not. If it was so simple then we could say that these promotional companies (including my own) would hold the “holy grail” of crowdfunding success in their hands.

The bad is summed up in the first graphic. £0 on 6,000 referrals suggests one of two things: either the campaign lacked the polish to garner support from the crowd, or Cooke and the team at CrowdFund Buzz weren’t successful in sending the right eyeballs to the campaign. In all reality, it is probably a combination of the two.

Still, it begs the question of whether crowdfunding consultants have the responsibility to turn projects away if they aren’t 100% confident they can actually help them seek funding. I could take $100 to help a dance troupe raise money on Kickstarter, but I don’t know a lot of dancers.

It all goes back to the crowd, of course. Crowdfunding campaigns never benefit from throngs of the wrong visitors. They often benefit from a handful of the right ones. By the same token, crowdfunding campaign creators should be careful to vet any consultants they wish to bring on. They should also ask how that consultant plans on targeting the specific constituency that is most likely to contribute. It’s ridiculous to assume any marketer knows each and every niche they’re catering to. Is the consultant asking the project creator questions about the target demographic? Strategy is a two-way street.

In Cooke’s own words, “Crowdfunding is [not] and will never be easy.”