How to Prepare for Crowdfunding

Posted: Tue, 15 May 2012 by

We hope you enjoy this guest blog from Carolyn Knight, of Odoro

So, you have what seems to be a great idea. You’ve started fleshing out your business plan, and a few of your trusted colleagues are on board to help you get your project started, if you can get the right amount of funding. You believe you’re ready to start looking into your crowdfunding options, but you may have never done this before.

What if potential financial supporters aren’t interested? There are a lot of people who are willing to back ideas with potential, but how do you communicate the potential of your idea, especially in the online space? How do you convince people and organizations to back you?

The key to improving your chances of receiving crowdfunding is to make sure your project and you are ready. There’s no need to rush the process if you don’t have all your ducks in a row. Here are some of the things you’ll probably want to do before you launch a campaign to get your idea crowdfunded:

1. Figure out how much funding you need

It’ll seem as though you didn’t do the necessary research if you launch a crowdfunding campaign and your online profile reads: “I’ve come up with this brilliant business idea. I need as much money as you’re willing to give me.”

Potential financial supporters want to know specifics. Even if you have the most innovative business idea in the world, no one will want to hand money over to you unless you can tell them how much money you need for your project and how you plan to use that money.

2. Build your credibility

You have to seem credible and competent to potential financial supporters. So, write down all of your relevant business accomplishments and create a written, online pitch that includes a summary of all of your relevant accomplishments. Have a friend or colleague read over your written pitch to check for grammatical errors and make sure you don’t cross over into the territory of arrogance. You want potential funders to think you're the bee’s knees, but you don’t want them to think you have a grandiose sense of self-worth. Make sure you don’t cross the line. 

3. Back yourself up with the right skills and the right assistance.

If you don’t have a background in computer science, you may have some trouble convincing potential funders that you’ll be able to monetize a cloud-based storage service. In this scenario, you’d need to prove to funders that you have the right team of programmers at your side to help you create the cloud service in question. It’s essential that you let funders know you have the brainpower, manpower, and willpower to accomplish your goals. So, make sure you are loud and proud about who’s working on your team and about all of the relevant experience you have.

Getting crowdfunding is one of the most challenging things you’ll have to do as you try to launch a new business idea. Make sure you’re prepared for the challenge!

 

Author’s Bio: Carolyn is a guest blogger on the subjects of small business funding, ecommerce best practices, and order management software as it relates to the use of BigCommerce, 3dcart, and Shopify.