Tag Archives: small business funding

How to Run a Successful Crowdfunding Campaign

With banks and other forms of traditional funding for small businesses all but vanished, many entrepreneurs are turning to Crowdfunding to raise money for their business.

Sadly, a majority of these entrepreneurs are failing to raise the money they expected.

That’s why it was exciting to find the Kauffman Foundation teaming up with Slava Rubin, founder and CEO of Indiegogo, to present a Kauffman Sketchbook video on Crowdfunding.

In this video Rubin offers practical suggestions and insights on how to be more successful with our Crowdfunding efforts.

Here is the 3 minute Kauffman Sketchbook video, narrated by Slava Rubin:

 (email readers, view video on my blog.)

 

Note that Rubin points our the fact that Crowdfunding is not an easy avenue to millions of dollars—raising money through Crowdfunding is hard work.

Also, if you missed it the first time, go back and take another look at the insights from Indiegogo analytics of more than 190,000 campaigns.

Here is a summary of those insights as presented on the Kauffman Foundation website:

  • A campaign that reaches 25 percent of its funding goal within the first week is five times more likely to hit its target.
  • Posting a campaign update every five days or less will raise four times more money than updates posted every 20 days or more.
  • E-mail is the No. 1 tool for generating support for a campaign. Facebook is No. 2 and Twitter is No. 3.
  • Campaigns that include a video will raise 114 percent more money than those that don’t.
  • On average, successful crowdfunding efforts will hit their target on day 36 of a 47-day campaign

(To see the entire Kauffman Foundation article, click here.)

So, if you work hard enough creating a good pitch, and then promote your pitch by being proactive, you can increase your chances for success—if you are pitching to the right audience.

Yes, it is a lot of hard work, but in many cases today, Crowdfunding may be your only choice.

What has been your experience with trying to raise money through one of the Crowdfunding sites? Let us know?

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A Video Primer on Crowdfunding

With all the new Crowdfunding websites being launched, as well as new regulations being released, this form of funding is becoming fairly complex and more difficult to understand.

Things will only become more complex when the equity investment by non-accredited investors is allowed sometime next year.

That’s why I was delighted when The Kauffman Foundation sent me a link to their video that discusses some of the “ins and outs” of Crowdfunding.

One of the best features of the video is the presentation of actual successful Crowdfunding projects. Of course, there are also a number of “takeaways” in the video for everyone.

Here is the video—provided by the Kauffman Foundation (best watched in full screen):

(email subscribers can view the video here)

Here are some of the issues covered in the video for anyone considering participating in today’s offerings:

  • How much should I ask for?
  • What are my chances of reaching my goal?
  • How many rewards should I offer?
  • What kind of rewards should I offer?
  • Why should I offer more choices?
  • How involved should my backers get?
  • How much work does it take to apply, and then follow-up after the project is funded?
  • Is Crowdfunding something I should even pursue?

So, if you are looking for startup, or expansion, money for your business, I highly recommend you watch the above video—and then put together your video “pitch.”

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How Not to Pitch to a Shark

Financing a small business is difficult at best, and very few people get to pitch to an Angel Investor during an early stage of their business.

For instance, of the 20,000 businesses that apply to appear on Shark Tank each season—only 60 are accepted.

With those odds, you would think that anyone accepted to appear on the show would prepare, rehearse, ask for critiques—and then practice and practice until it became second nature.

Following is a perfect example of what happens when one of the select few who get to appear on Shark Tank is not prepared to present their “pitch”:

 

 

Also, it is not only the Shark Tank presenters who need to prepare their pitch—the same is true of every entrepreneur who needs startup financing from someone, somewhere.

It doesn’t really matter whether you are pitching your Aunt Edith, or an A-list Venture Capitalist—you need to prepare, prepare, prepare … and then do it all over again.

As Mr. Wonderful said: “Don’t worry, it’s only the biggest moment in your life.”

If you can’t give a concise, and exciting, description of your new business venture in (2) minutes or less—you really don’t know your business very well, and whoever you are talking to will quickly know it.

If you have trouble pitching your business … you should look for a partner to help you start the business and be responsible for getting information about your business across to other people.

Have you ever had a “brain freeze” like this poor guy had?

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