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All Rights Reserved. Reproduction and Distribution Are Forbidden. No Part Of All rights reserved. Reproduction and distribution are forbidden. No part of this publication shall be reproduced, stored in a retrieval system, or transmitted by any other means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the publisher. This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is sold with the understanding that the author and the publisher are not engaged in rendering legal, intellectual property, accounting or other professional advice. If legal advice or other professional assistance is required, the services of a competent professional should be sought. The author and and distributor individually or corporately, do not accept any responsibility for any liabilities resulting from the actions of any parties involved. 2 Table of Contents Chapter 1 Introduction Page…..5 Chapter 2 What is Crowdfunding? Page…..8 Chapter 3 How to use a Crowdfunding Site Successfully Page…..12 Chapter 4 What Types of Projects and Ideas Work well with Crowdfunding? Page…..15 Chapter 5 Tips and Strategies to Increase Success Rate Page…..17 Chapter 6 Types of Rewards to Offer Page…..20 3 Chapter 7 Marketing your Campaign Page…..24 Chapter 8 Crowdfunding Websites to Check Out Page…..27 Chapter 9 Creating a Long Term Business Page…..33 Chapter 10 Common Pitfalls to Avoid Page…..35 Chapter 11 Selecting the Right Crowdfunding Site for a Particular Project Type Page…..39 Chapter 12 Conclusion Page…..42 4 Chapter 1 Introduction Getting a project or business idea off the ground is very possible with the world of e-commerce. You can get started without a ton of money invested in marketing and other elements of a brick and mortar business. It also means less overhead so more money can be created as profits. The biggest obstacle though is reaching the target audience. They have so many choices when it comes to shopping around online. It can be too easy for your business to get lost in the shuffle. Taking actions that will kick start what your project is all about is very important. One way to do this is through the process of crowdfunding. You may not be very familiar with what it offers or how to go about it. Yet this one concept can make a profound difference in the outcome for you. That is why more people are using it as a tool and a resource for what they wish to promote online. There are differences between crowdfunding and donations. They aren’t the same, and understanding that is important. The biggest difference is that crowdfunding is part of the American JOBS Act. This allows it to be considered a part of online sales, similar to stock in small amounts to large 5 numbers of investors. This is still a work in progress, but the concept is already up and running. The basic concepts of what crowdfunding sites offer is the same. However, they have many differences among them too. Before you post a project, take some time to see what each offers. In a later chapter, we will talk about some of the best ones to consider. In another chapter, the concept of matching up the right platform with a given campaign to generate funding is also discussed. You may be saying you like the idea of crowdfunding, yet you are still somewhat intimidated by it. This information will share with you the process step by step so you know what to do and how to do it. You will also learn the best forms of crowdfunding that work well for a given type of project or idea. Taking the guess work out of the equation means you can create a plan of action. You can utilize your strategy and you can move forward at a pace that challenges you and also helps you to get the results you have been seeking. It is time to raise the bar and to see yourself at the top of that mountain. Rewards are a huge incentive for consumers to follow your project or idea. Use them wisely in order to increase the results you get. In order to successfully gain traffic, you need to have diverse marketing in place. In this day and age, that also means implementing social media. Learn how to make your crowdfunding efforts go viral! 6 The funding of crowdfunding is very creative. It can be used for any type of company, any type of project, and any type of idea you may have. It can even be used for non-profit organizations. They often think they can’t use it due to the various laws that surround a non-profit entity. The amount of money that can be generated through a crowdfunding campaign depends on several factors. They include: Quality of the marketing and outreach Niche market Types of rewards for contributors Length of time the campaign runs As you continue reading, you will be motivated to get started with crowdfunding for your project. You will see how you can use it successfully and also avoid common pitfalls. You will also be able to see the value that it holds in terms of taking a project or idea and turning it into a long term business venture that is successful and profitable! 7 Chapter 2 What is Crowdfunding? Fully understanding what crowdfunding is leads down the path of successfully using it. The process involves getting a large number of people to donate a small amount of money for the project or idea. The money is generated by raising awareness through marketing, typically done online. The idea is to help small businesses because they know all too well the struggles that have occurred in the difficult economic times. They may be barely getting by and making a small profit. This doesn’t leave them funding for expanding, for major repairs, or even for adding new products or services. The process of crowdfunding can help to give them a boost so that they can continue to move forward. They can compete with the larger businesses and they don’t have to worry about the cash flow issues. They don’t have to struggle with lenders that make it very hard for anyone to get a loan these days. It is significantly hard for a small business to borrow money due to the risk the lender incurs. As the business concepts and projects are showcased, it can encourage consumers and those with an interest along those lines to make the 8 decision to donate. They only have to donate a small amount so it isn’t a huge dent in their budget by any means. Yet those small donations will quickly add up when the number of donors is significantly high. Obtaining traditional types of investors can be frustrating and it can feel like a dead end street. It can be extremely difficult to entice them to invest funds in a business, an idea, or a project that is risky. They don’t want to jeopardize losing their funds. With the tougher economy, they have become far more selective about who they invest with. Crowdfunding campaigns though remove those frustrations because they are funded by the typical citizen. The general public is going to offer the revenue that the business, idea, or project is lacking. The connections continue to trickle in too because people often share the information via social media. With crowdfunding, starting out with contacts including friends and family is the way to go. From there, you can consider various acquaintances through social media. People will them branch out and share with others they know. The foundation is in place and the traction continues to build as the information spreads. Don’t underestimate the power of the general public when it comes to supporting a cause they believe in. When they see that others are also supporting it, that further entices them to also make their contribution. While creating crowdfunding isn’t hard, it does take some planning. A great campaign isn’t going to materialize on its own. 9 In order for the proposal to go viral, which should always be the goal, there has to be solid information. There has to be material that evokes a strong positive response from those that see it. That is the only way they are going to feel confident enough about it to make a monetary donation towards the cause. With that in mind, plenty of details need to go into the creation of the proposal. There are several steps that should be part of the overall outreach. They include: Creating distribution lists Allocating all social media outlets Creating videos Local media contacts Some people are hesitant to use crowdfunding as they don’t want to seem like they are asking for a handout. However, if you want people to join your cause and financially back it up, then you have to give them some sold information to work from. One of the projects that I donated to recently was the upgrades for projectors at the drive-in about an hour from my home. It is one of the few left out there, and a very enjoyable place to go. However, they were at risk of closing down because the laws were mandating all of them to switch over to a digital screen format. The cost was $150,000 for the three screens total. 10 Through crowdfunding, they were able to get the money and they will re- open this summer with all three screens in place with the upgrades. People that read about the problem were willing to contribute to the cause, including me.
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