Entrepreneurship & Innovation

Demystifying Crowdfunding

morreale Tuesday 27 of August, 2013
Slava Rubin from Indiegogo describes How to Raise $1M in 30 Days as part of a lecture for the Kauffman Foundation. Slava says that the trend now is to develop a relationship with your customers so the emphasis is no long about the transaction but the relationship. If you are in the relationship business is all brand instead of commoditization. People fund because
  • They identify with the campaigner's passion and connect with the team.
  • They want the product or perk being offered.
  • They want to be part of a social movement, trend, or be part of something that makes a larger project possible.
  • They take pride in contributing to making someone's dream come true.
To have a good campaign you need a
  • Good pitch that tells your personal story and shows you passion
  • To tell about your project constantly
  • Find an audience that cares and give the contributors something in return
Slava says that you have a more successful campaign if you
  • Have a 2-3 minute video that is broken into three parts. Part 1 is the short story about you and what you are passionate about plus we have cool perks. Part 2 is all about the product and can be used anywhere. Part 3 thanks the contributors and asks for a contribution.
  • Have 5 to 8 perks.
  • Provide three contributions levels of low (<$25), medium ($25-100), and high ($100-500). Most people contribute a median of $30 and an average of $74.
  • Provide exciting and crazy perks like >$1000, >$5,000, >$10,000 which creates buzz and attention.
  • Provide engaging individual story that mimics the video and it should contain images.
  • Do an update every 5 days or less
  • Email, Facebook, and Twitter are best used to support your campaign.
  • Set up an Host committee to coordinates your campaign. It should be set up about a month before the campaign starts, and the Host committee should involve around 100 people. Each person on the Host committee is responsible for raising funds from 10-20 people. It's very hard to do.
  • If you don't know who's funding you, don't launch.
    • The inner circle jump starts the campaign.
    • The inner circle validates the product which encourages strangers to contribute (social legitimacy).
    • The average campaign will get 35% of its contributions from the inner circle, $40% from friends and family, and 25% from strangers.
  • Reach out to people both on and off line.
  • Connect with bloggers and the press that are related to your campaign.
  • Asks people to give multiple contributions.
For more information, check out the Indiegogo blog.