Our Google+ Hangout
by Bloom intern Jamie Moore
We loved our Google + Hangout with Ingenious Britain and hope you did too! If you couldn’t make it you can catch the whole discussion here on Youtube.
Michelle was answering both questions from Ingenious Britain and from those looking to crowdfund in the future. Below is a just a portion of the Q&A. Check out the video for the full discussion.
Q. What is your definition of crowdfunding?
A. Crowdfunding in a nutshell is simply asking lots of people for small amounts of money in return for a reward or gift. Crowdfunding has been around for centuries but the explosion in social media has allowed it to grow to be where it is today.
Q. What are the benefits of real crowdfunding?
A. The benefits to real crowdfunding are that:
- Crowdfunders are closer to the community they create than a business is to the bank. You don’t need put a valuation on your business and you're not giving away any equity in your business. Conventional wisdom would say that as a start up, you hang on to that equity for as long as you possibly can while building value into your business.
- You are building a community of ambassadors and future customers. In return for funding, the backers receive a reward be it treats, perks or even experiences.
- You are potentially more investor ready as crowdfunding can help you prove a concept, demonstrate a market appetite and you are able to pre sell your product as a reward. In essence you are filling an order book before you start. You're raising awareness of your brand and building a database of potential customers.
Q. Could real crowdfunding be used to help the more established business that is looking to expand?
A. The answer is yes, of course they can! Whether they are looking at launching a new product or creating a prototype, then creating a discrete project around that initiative is a really easy thing to do - as long as they have compelling rewards to offer in return.
Q. What tips would you give to those looking to crowdfund?
A. It is of vital importance that you be on all the social channels such as Facebook, Twitter, Linkdin, Pinterest and Google +. You should start to engage and build a community before you launch your crowdfunding campaign. There are three support groups you should target when crowdfunding:
- Your primary support group is your friends and family. You should aim to have at least 20% of your target from this group promised as soon as your project goes live. This is important as it shows there is support for and a momentum to your project.
- Your secondary audience is the friends, family and colleagues of that first support group. Ask your primary supporters to share your project with people they know .
- Your tertiary support group is the complete unknowns who will stumble upon your campaign either through the Bloom website or on social media, which is why it is so important to have a strong and engaging presence on these networks.
It is also important that you plan your communication activities with these the groups in mind before your crowdfunding campaign even begins.
Q. Is it important to have a business plan when crowdfunding?
A. It certainly is not, in fact it is more important in real crowdfunding that you tell your story in a passionate way that encourages people to support you and make them want to be part of your journey.
Q. What are the non-financial benefits of crowdfunding?
A. That you can test your price point, if people are buying a reward then they would be willing to pay that price. You can also raise your PR profile by using the crowdfunding campaign. You can pre-sell your product or service (as a reward), prove a concept, demonstrate market appetite and build a healthy database of engaged ambassadors, people that are so keen to buy your product or service they are paying you to start your business.
Q. What factors make a crowdfunding campaign successful?
A. The three critical success factors of real crowdfunding are:
1. Build a community in advance of launching your project and make sure that they understand your ask, that you’ve asked them to give you money and asked them to share your project. Make sure you explain that it's an all or nothing model and it is important they understand that.
2. Have a really good pitch - tell a great story and explain to people the how and why of your project, why it matters and how they can be a part of your journey. At Bloom we work hard with project owners to ensure they tell their story in the best possible way.
3. Rewards - you might have a great product but without great rewards you won't get the backers. Get creative and design a range of rewards that will appeal to the widest possible audience.
We hope you got the answers you were looking for from this blog and video, but please do get in touch if you have any more questions. Contact firstname.lastname@example.org