7 Crowdfunding Keys For Social Entrepreneurs
This post was originally produced for Forbes.
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Lots of people hold themselves out to be crowdfunding experts. I haven’t met anyone who has raised more money in on Kickstarter and Indiegogo than Funded Today’s Zach Smith. He reports raising over $110 million total over hundreds of campaigns.
Smith visited with me (watch the video recording of the interview above) to talk about how to apply his experience and insights for social entrepreneurs.
He thinks of himself as a social entrepreneur, helping other entrepreneurs to be successful. He is almost a prototypical entrepreneur. Young, confident—even brash—he has built his company to 50 employees and reports “eight figures plus” in revenue. Funded Today charges 25 to 35 percent of funds raised, so in its short three-year history, we’d expect it to have generated over $30 million in revenue.
His reputation in the crowdfunding community is such that when Hiral Sanghavi, co-founder and CEO at BauBax had his crowdfunding campaign stall at around $4 million, he called on Smith to help. He says, “They reached out to a completely different audience and got another huge wave of traffic our way which helped us add another $4.5 million to our total in the last 3 weeks and our campaign closed at $9.19 million.”
“FT has got access to thousands of crowdfunding campaigns and they’ve built a community of early adopters out of it. They were able to get our campaign in front of the right audience who are mavens, early adopters of technology and innovative products. We couldn’t have done that using only Facebook ads,” Sanghavi says.
Paid media on social media sites, including Facebook, Instagram and Pinterest, is a key tool that Funded Today uses to raise money for clients. Smith explains how you can do it on Facebook.
A good crowdfunding campaign begins with a crowd. A crowd is best represented by a list of email addresses. He suggests spending up to $5 per email address for people who are interested in your mission. Given that you’d like a list of 10,000 people and a list that long will cost up to $50,000 to build, he has another plan.
Ask, he says, someone in your mission space who has a list for a copy of the list specifically to use for building a Facebook audience. You should promise not to send email to the people on the list. Instead, you want to upload the list to Facebook for targeting advertising. Until Smith told me, I had no idea you could do this. Did you?
Not only can you use that audience as a target, Facebook will automatically offer to create a “lookalike” audience that is much bigger. For instance, I uploaded my mailing own mailing list following the instructions on Facebook and it instantly helped me create a list of more than 2 million people who are like the people on my list.
Smith also shared his “Seven Ps” for crowdfunding success:
Product: The crowdfunding reward or product must be appealing; for nonprofits, Smith recommends identifying recognition that donors will appreciate.
Platform: Not only do social entrepreneurs need to decide which platform to use, but whether or not their business is a good fit for crowdfunding. If a reward can’t be shipped or delivered digitally, it may not be, Smith says.
Presentation: The way you pitch your offering on the crowdfunding page, including the video, represents the presentation—and he says it makes a big difference. Smith says he helped ShotBox raise over $184,000 primarily by changing the presentation after the original campaign raised only $7,000 and had to be canceled.
Promotion: The three key parts to promotion are paid media, press and partnerships.
Price: Smith cautions crowdfunders not to discount the price, noting that it is easier to drop the price later than to raise it.
Probability: He says that backers need to believe you can and will do what you promise. In other words, you need to develop trust by proving you have the smarts and other resources to necessary to pull it off.
People: Your team needs to have the right people on it; they must be confident of success and committed to doing the work required to achieve it.
Marina Prospero, CEO of Perfectore Corp, is crowdfunding with help from Funded Today now. She says, “We were watching some very successful 6 figure Kickstarter campaigns and they all had one thing in common, Funded Today was their marketing partner. Several of these campaigns were products that focused on back and neck treatment. We figured if they have already been successful marketing these campaigns then they will definitely know how to market ours.”
She’s glad she did. “They have performed beyond my expectation.” With Smith’s help, she’s raised over $585,000 with an original goal of just $5,000. “Frankly I am blown away at how good they are and I am anxious to work with them again on our next invention.”
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Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!
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