Finance and Legal

Crowd funding success tips

Crowd funding projects are only limited by your imagination and your commitment and enthusiasm to promote them. Below are four advantageous tips that can lead to crowd funding success.

The art of the pitch

If you want any chance of success at crowd funding your start-up you need to present a worthwhile pitch. Funders on Startup Addict and other crowd funding sites like peerbackers and IndieGoGo

are looking for a worthy venture to place funds but more importantly they are asking the fundamental question of "what's in it for me?" Most entrepreneurs post to crowd funding sites thinking their idea is brilliant and funders should be privileged to invest in their start-up. Unfortunately, this is not the case and crafting a great pitch is essential.

First, give some background about yourself and a personalized story about your start-up. Be sure to include pictures, videos and supplemental documents. Be as open and transparent as possible, Funders need to believe you have the business savvy and start-up chops to pull your venture off.

Affordable investment tiers

This is probably the most common point of failure for start-ups in the crowd funding space. The idea behind crowd funding is to bring the power of the crowd to your start-up via micro-finance or accessible investment tiers like £5 and £10. Start-ups are not as likely to achieve funding at a £250 and £500 funding point. You are more likely to get 10 people at £25 than 1 person at £250. This is not to say someone will not fund at a £250 dollar price point but the reward should be commensurate with the pound amount. I see many entrepreneurs try to go for £50,000 or higher which is an unrealistic amount of donation unless you have a very unique start-up on a crowd funding site that garners a lot of traffic.

Rewards, rewards, rewards

This is one of the most important areas to pay attention to for crowd funding success. If you expect to get multiple investors/Funders and achieve 100 percent funding in a 30, 60 or 90 day timeline then only amazing and unique rewards will get you there. A Funder must get something in return of unique value other than the warm tingling feeling in his/her heart for just funding your start-up. A great example of unique rewards are in short film projects where a start-up will name a character after a real person (funder) on a higher priced investment tier such as £100 dollars. The sweet spot in crowd funding is between £10 and 25 dollar funding increments.

Drive Traffic

Once your start-up is posted on a crowd funding site don't rely on the overall traffic of the site itself. Be fast and furious with social media, posting to Twitter, Facebook, LinkedIn, Youtube and email signatures. If you can get just 20 percent of your project funded by your circle of friends and social influence you will be well on your way to success from the crowd.

I hope these tips will bring you crowd funding success on your next start-up. Best of Luck!

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Tod Whipple is a serial entrepreneur, tech geek, and real estate developer. He is the founder of StartupAddict.com, a resource designed for budding entrepreneurs seeking funding. He also blogs regularly at Startup Addict Musings. He is an advocate for startups and small businesses everywhere. Mr. Whipple earned the prestigious CCIM designation (Certified Commercial Investment Member) and has extensive knowledge in financial analysis, complex financing formulation, market analysis and investment analysis.

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