Crowd funding is a way of raising money for a specific project using the internet and social networking technologies to get small amounts of money from a lot of people (cumulatively, this can equal a lot of money). Crowd Funding allow you to describe and promote your cause to their audience, whether it be raising money for your club, seeking funds for a charity event, some folks even use Crowd Funding to raise money for movie projects. It’s up to you to promote your cause well enough to get your supporters, sponsors friends, family, club members and your community to donate so you can reach your funding goal.
What is crowdfunding?
Crowdfunding is a way to raise money, awareness and support for a project, from the people around you. It’s means of funding that allows individuals to make their ideas a reality with the power of the crowd.
Crowdfunding enables people with great ideas to raise the money they need, in return for ‘rewards’. The public can back your idea with pledges of money and project owners can ‘thank’ their backers with rewards that reflect the money contributed. Don’t worry – we’ve got some great reward ideas for you in our guides!
1. Create
First you create a simple page on our site, explaining your idea.
2. Share
Next, you tell all the people you know – and some of them share it with their friends in turn… and so on.
3. Pledging
All the while, people who believe in your idea pledge money in return for a reward that they’ll receive if your project succeeds.
Why it’s great – benefits
Validation – Crowdfunding validates your idea and gives you confidence, it proves that people like your idea and will pay or contribute to make it happen.
Funding – You can unlock other funding for charities and community groups this maybe grants, for businesses it could be loans, investors or a pre-cursor to an equity crowdfunding campaign
Advocates – Crowdfunding is for life, not just for fundraising. The people who support you and your great idea become a part of your journey and make incredible ambassadors for your project in the future.
Marketing – When you create and launch your project you have to really think about how you are going to market your idea. So Crowdfunders learn vital skills when fundraising – they learn how to become superstar marketeers too!
Learn more
From passion, commitment and dedication comes great crowdfunding projects. Having raised millions of pounds for thousands of projects, we’ve got the following sections that will explain all you need to know about getting your project built. From telling your story to creating great rewards and setting an achievable target…
Telling your story
First and foremost, people need to understand your idea, why it means so much to you, and why they should support it.
First and foremost, people need to understand your idea, why it means so much to you, and why they should support it.
Use the video, description, aim and images on your crowdfunding page to explain:
Who you are
Because not everyone who visits the page will know you.
What your idea is
what it will achieve, and why they should care.
What the money’s for
so they can understand why you’ve set your target.
Offer good value for money
The trick is, to do all this in a way that’s really punchy and concise (so people don’t have to spend a lot of time watching and reading). Try for a maximum of two minutes for your video and 25 words to describe your aim. Try to use plenty of sub-headings and images in your description, to make it easier to read. Telling your story well will help people understand your project and get them excited about supporting it.
Rewards
Rewards are benefits, products or services offered by the project. Examples of rewards are thank you tweets, events and experiences, products and mementoes of your campaign.
Crowdfunder projects usually offer a reward in return for a pledge of money. Rewards boost your project’s success because they encourage your supporters to increase their pledge amount; therefore making it more likely your project will be fully funded.
Learn about rewards
What are rewards?
Rewards are benefits, products or services offered by the project. Examples of rewards are thank you tweets, events and experiences, products and mementoes of your campaign.
What makes great rewards?
Rewards that appeal to a wide spectrum of people. Rewards that are creative and unique. Rewards with price points to suit every budget. Rewards which are good value for money.
Your target
When deciding on your target find a happy balance between the amount you need to raise and what is realistic from your audience.
Crowdfunder offers two ways to fund your project;
1. ‘All or nothing‘ means you need to raise 100% of your target to receive the funds, if you raise less than 100% you get nothing and the money is sent back to the backers.
2. ‘Keep what you raise’ does what it says on the tin! Whatever amount you raise you keep.
When deciding on your target find a happy balance between the amount you need to raise and what is realistic from your audience.
The facts and figures
Stretch targets
A stretch target is a figure larger than your original target which allows you to keep raising funds once your target has been reached – we call this ‘overfunding’.
How do I work out my target?
Setting a realistic target can increase your chances of getting funded. Here’s some handy facts to help you work out how much you should aim for:
Fact 1: Average pledge on Crowdfunder = $50
Fact 2: Average conversion rate (percentage of people who view your page and then go on to pledge) = 5%
Sum: Example ideal target = $1000 Target / average pledge If the average pledge is $50 and you want to raise $1000 you need 20 backers Backers / 0.05
If the conversion rate is 5% and you need 20 people to pledge you need 400 visitors to your page
Therefore you know that you need 400 people to view your page resulting in 20 people paying $50 to get your project funded.
Bear in mind these sums do not result so exactly in the real world, however they are a very good guide.
Getting funded
Communicating your project idea with your community is key to getting successfully funded. Sharing your project with your network, and asking them to share it with their network, is essential.
Communicating your project idea with your community is key to getting successfully funded.
Sharing your project with your network, and asking them to share it with their network, is essential.
Steps to success
Top 4 steps
1. Appeal to a wide audience
2. Get feedback from friends and family
3. Start strong with early pledges
4. Share your project page. Tell everyone!