Crowdfunding has become a popular choice of funding for many businesses in recent years. Our friends at Virgin.com caught up with Crowdfunder’s Guy Hayler to find out more about how it works and why it’s a good way to make your business idea happen.
While any business can choose to crowdfund, Guy admits that there are some types of business that it would be difficult to run a crowdfunding campaign for.
“I often challenge people to think of an idea that you couldn’t crowdfund for because there’s always a way you can twist and bend it. That said, things like recruitment businesses or IT consultancy firms are really hard because you’ve got to think about what they’re going to offer in return if they’re going to do rewards crowdfunding, or how they’re going to stand out if they’re going to do an equity crowdfund.”
For that reason, Guy says that it tends to work best when a business does a reward-based crowdfund with a tangible product or service that they can offer to a crowd – or if they’re looking to do an equity crowdfund they need to know what will make them stand out as the next big thing.
For all crowdfunding campaigns the key really is in the crowd.
“The most important thing is to really concentrate on who your crowd is; you want to be generating the buzz and excitement around your campaign,” he says.
“That is what will get the average Joes to come in. If you’ve got the story and the rewards, then it’s all about the marketing and making sure you go into it knowing who is going to back it, and that those people know what they’re going to do. That is arguably the most important thing that a lot of people miss, they just chuck their ideas up and hope for the best. That would be my biggest tip, go into it eyes open and make sure you’ve got the buzz.”
Support From The Experts
The Crowdfunder team often help to boost campaigns that they think have potential – but what is it that they’re looking for in a project? “We’ve got hundreds of projects going live every day so it’s hard for us to say we’re going to help everyone,” Guy admits.
“So what we tend to do is we let the projects get to the point where they’re going live and if at that point it’s obvious that they’ve done the hard graft in that the project immediately starts getting support and their target starts moving straight away – they’re the kind of people we want to work with, it’s much easier for us to jump in and enhance everything that they’re doing.
“It’s harder for us to commit time to anyone who’s just put it up there and they’re crawling along – it’s clear that they haven’t followed any of our tips or hints or really done their research. Time is valuable so it’s much better working with good people.”
More than anything though, they look for creativity – some of the campaigns that really impressed Guy most include What A Melon Water, Moken, and Halto.
“When we’re looking through the projects, we want to see a page that represents their project as best as possible, it’s got to look nice and be well-written,” he says. “Ideally people looking for larger targets would do a video so we can see the people behind the project.
“To be honest, the ones that really stand out are those that you can have a bit of fun watching, either really nicely put together or they’re having a lot of fun, so it’s really watchable and really shareable.”
Stories And People
And of course, with video it’s important that you’re telling a good story.
“A lot of people will back a project based on the story before even looking at the rewards. It’s important to show what you’re doing and why you’re doing it,” Guy says. “Make sure the story comes through, it’s such a competitive world out there, and there are thousands of projects on the site so you’ve got to make sure that yours captures people’s imagination.”
Crowdfunding is about more than just money too – it also helps to validate your idea as you can show that you have an audience and a customer already identified. If you’re looking for more investment or entering competitions like Virgin Media Business VOOM, “doing that with a strong crowdfunding campaign in your back pocket is as good as anything else. People look very fondly on a successful crowdfund.”
Crowdfunder has partnered with Virgin Media Business to bring crowdfunding advice to the VOOM tour bus.