I was fortunate enough to attend last year and look forward to the upcoming gathering. Last year focused a lot on the different crowdfunding platforms. Many platforms were represented by their founders and gave some very enlightening insights.
These were my key takeaways.
Crowdfunding for startups
Dr. Richard Swart gave the keynote address last year and discussed the role crowdfunding can play as seed money for a startup.
- Crowdfunding can be a seed round and entirely replace the angel round.
- Angels are asking founders about their crowdfunding attempts.
- There has been a 29 year decline in small business lending.
- 70% of entrepreneurs who have tried crowdfunding and failed would do it again. The lessons learned in the process pay dividends in other areas.
- Plan at least two months of preparation for a crowdfunding campaign.
- Women are more successful with crowdfunding.
- The average campaign gets about $80 per backer with about 80 backers total.
- Start by mobilizing a community who is interested in your success.
Dan Baird will be kicking things off this year and his business is solely about venture based crowdfunding.
Crowdfunding success elements
Brian Meece of RocketHub spoke about how to be successful with crowdfunding campaigns.
- Clearly explain the project
- Be great
- Make a statement
- Explain why
- Understand the network. There’s width which consists of pure volume of numbers and there’s depth which consists of people who carry a lot of influence with their audience. Reach both.
- Sell your journey
- Explain the levels of impact; if we reach this goal, then X happens
- Make it entertaining. This should be a fun exchange.
- Commit to the campaign
- Win first followers
- Build dialogue
- Spiral out
- Tell the story
- Reach out to media
- Finish strong
95% of seed funding will come from the crowd.
Telling the why
- People don’t buy what you do, they buy why you do it
- Focus on marketing to the niches that need/want your product – nichecasting not broadcasting
Involving the audience
- People want to participate in the story
- Facebook shout outs are one of the most popular rewards for backers
- Launch party
- Campaign close party
- Get backers at trade shows
- Don’t use too many reward choices as backers can get confused or delay acting
- Too many choices can be a challenge to fulfill
- What happens when you’re successful
- Fulfillment isn’t just about sending the product, it’s about packaging it and shipping it
- Know your shipping and packing costs. International shipping can ruin a profitable campaign
- Communicate with your backers – In crowdfunding, three weeks late is six months early. Offer compensation if product is seriously delayed
- Crowdfunding backers are your core fans. They are willing to give you money for something that usually doesn’t currently exist
- Remarket to them by providing updates on your company and new products. Make them feel like part of your story
- Backer list effectiveness will fade over time
These were the eight biggest themes from last year’s Utah Crowdfunding Conference. I was pleased with my experience there; the sessions ran on schedule, there were tons of people for networking, there was lunch, I learned a lot of things about crowdfunding including platforms and strategies and I’m definitely looking forward to this year’s on the April 28th. There were also some pretty cool product giveaways. Bring plenty of business cards.
Early bird tickets available until April 24th for $33.95. For additional information see their website.