How To Crowdfund $50,000 In Your Spare Time
A few months ago, the idea of running a crowdfunding campaign to raise $50,000 terrified me. I had a full-time job and hadn’t told many people about my startup, Kuli Kuli. My own father still couldn’t pronounce the name of the plant that we were trying to make the next big superfood (for reference it’smoringa — MO-ring-GA).
Making me even more nervous was the fact that every high-volume crowdfunding campaign I read about seemed to have a full-time staff and a couple of celebrities behind them. Which sort of made me wonder, if they had all that, did they really need the crowdfunded capital?
So this is the article I wished I’d read six months ago. It is entirely possible to run a very successful crowdfunding campaign without being absurdly well-connected or quitting your day job. It just requires a little more planning. Here’s how we did it:
Figuring Out Your How & Why – 2 months out
About two months before you release your campaign, you need to figure out your how and why. As my good friend and crowdfunding consultant Sydney Malawer put it, “do you have a legitimate ask besides ‘we want money’?” People want to feel as though they are a part of something bigger than themselves and they want to know that their money is instrumental in accomplishing that goal.
For us, this meant that we needed to do a lot of research. The goal of Kuli Kuli’s Indiegogo campaign was to raise enough money to do our first major manufacturing run and launch our first moringa product in U.S. grocery stores. And we wanted to do all of this in a way that significantly improved the lives of the women farmers in West Africa where we source our moringa.
We depicted these goals in the graph above and wrote out an estimated budget in our campaign based on the quotes we’d received from manufacturers, insurers, lawyers, suppliers and distributors. Sound like a lot of work? That’s why you have to start early.
You should also do some research on crowdfunding. Both Kickstarter andIndiegogo have a lot of helpful tips of their website. Mike del Ponte wrote a great post on “Hacking Kickstarter”, Marked Point compiled a list of factors to consider that contribute to campaign success, and the Unreasonable Instituteput together some good learnings from their failed campaign.
As a final but important part of the preparatory phase, you need to find a videographer. Your video will make or break you. We were able to find a professional videographer who was willing to work pro-bono but you can make a compelling video yourself so long as you focus on telling a compelling story and keep it under three minutes. There are lots of good resources online to help you edit your video. A new startup called Ignite Video even has an app to help you edit videos from your phone.
Designing Your Campaign – 1 month out
Now that you have an idea of how much money you need to raise, you need to decide which platform to use. There are literally hundreds out there just waiting for the JOBS Act to pass but Kickstarter and Indiegogo are the two best options in my mind.
Kickstarter is the more trafficked of the two, but is a lot pickier about the types of projects they’ll allow (strictly creative) and its harder to make it onto their homepage since they do have more high-volume projects. In all honesty, Kickstarter rejected our campaign and I am so happy they did. We were featured on Indiegogo’s homepage for multiple days, went out in their newsletter and posted in their social media.
Once you’ve chosen your platform, you need to design the layout of your campaign. At this point, you should have storyboarded out your video and crystallized your pitch. Try explaining your value proposition to a five year old. If they get it, you’re golden. If they love it, put them in your video.
Your campaign should be image-rich, with just enough content to answer the predominate questions of “why should I care” and “what are you going to do with my money?” Most people don’t read so make sure all of this is in your video too. In general, it’s a good rule to not overestimate people’s attention spans so you’ll also want to keep your campaign short, around 30 days.
The final question you need to answer is “what are you going to give me?” Yes, technically people are donating to your campaign but it isn’t necessarily out of the goodness of their hearts. It’s a little bit of that plus a lot of “that looks awesome, I want that.” This is where your rewards come in.
You’ve got to have an appealing reward at the $25 level — this is by far the most popular pledge amount. But you should also dream big and have a multi-thousand dollar reward that offers some sort of incredible experience related to your product. We did a “weekend of health and wellness at a Napa winery” for $5,000. Full disclosure: the person who claimed it is related to me and would have donated anyway but said that she “got excited” by the winery reward and so donated more than she might have planned on.
Do NOT forget to factor shipping into the cost of your rewards. Your final price for the rewards will likely be the cost of the goods + shipping + a crowdfunding premium that includes the percent that the platform will take along with a little extra because these people aren’t just purchasing a product, they’re getting an idea off the ground. Finally, make sure that the estimated delivery date is something you can deliver on. We thought three months was enough. It generally isn’t, which is why about 70% of campaigns don’t deliver on time. You’ll probably want to give yourself six months.
Building the Movement – 2 weeks out
By this point you should have a core team of people working on this with you. Maybe its your co-founders, maybe its your mom, it doesn’t really matter so long as these people are ready to go out to their networks to make this campaign a success. Now the key is to increase that number.
We did this by creating a simple ambassador form in google (ours is here) that everyone on our team sent out to their networks two weeks before we launched. The goal is to get a lot of very excited ambassadors who are willing to go out to their networks for you. These people are signing up to get short-term spammed because your job is to send them sample social media posts and emails every week during your campaign. (You should tell them this in advance).
Organizations make even better ambassadors because they often have much bigger networks than individuals. We made a list of every organization we could think of related to moringa, nutrition, Africa or the Bay Area and we contacted them asking if they’d be willing to post about our campaign on their social media.
Lastly, you’ll want to prep the media. You should draft up a standard press release as a template but understand that personalized reporter pitches are what will actually get you covered. If you can, find a friend who works in PR and ask if he/she can download a list of reporters from a media database like Cision or Vocus. You’ll also want to spend time looking for relevant bloggers. Often a good place to start is by looking at who covered campaigns similar to yours.
Don’t expect that most reporters will respond. No one responded to our first pitch but when we followed up after our campaign had gained some momentum we landed on the front page of the SF Chronicle Business Section.
Your goal is to raise 25% of your funding within 24 hours which is roughly the amount that should get you featured on the homepage of Indiegogo or Kickstarter. This day is critical, so make sure that you’re prepared. And be sure to wake up early.
Two weeks ago you sent the ambassador form and your launch date to a list of friends and family (in my case about 200 people). Now you should send an “it’s here” email to everyone you have ever met or interacted with. An easy way to do this in gmail is to click on Contacts → More → Export (All Contacts, CSV). Then you can import those contacts into your preferred email service provider (we useMailChimp).
Take a deep breath and then send out an email to all of those people (in my case 2,000 people). Note that you should only do this once in a blue moon otherwise you’ll be marked as spam, kicked off your email provider and your friends/family will begin to hate you. Encourage your teammates to do this as well but don’t force it, this type of email isn’t for everyone.
After sending that email you should spend the rest of the morning reaching out directly to key influencers, posting on social media and watching as that little green bar moves towards the right. Then you should go to your day job.
That evening, you should host a launch dinner party with all of your family and friends. If you’re a bunch of 20-somethings like us, you should ask your parents or someone older to host it. Aka, someone who has friends with real money. Over the course of that evening you should show your video, give a short heartfelt speech about what this campaign means to you and then make sure that everyone in that room has access to multiple computers with your campaign on it.
That strategy helped us raise $21,000 by 9pm and got us on Indiegogo’s homepage. If you do your preparation and launch day right, the rest will follow. You should plan on sending updates to your backers and networks throughout the campaign, ideally in video format for a few of the critical moments such as when you’re halfway to your goal or 80% there.
End of Your Campaign
At the end of your campaign you should be sure to thank everyone who backed you, ideally in a video format. You should also celebrate! I’d highly suggest throwing a big party and inviting everyone who supported your campaign to attend.
Make sure to add all of the emails you’ve collected to your list and to keep everyone updated on your production timeline. If you do it right, a successful crowdfunding campaign can help launch your idea to the world and finally let you quit your day job. It did for me.