by Daniela Baker
It can be tough to get a social enterprise off the ground. Green business owners may find it tough to qualify for traditional loans (not to mention the paperwork), and borrowing money from friends and family has its own set of problems. An intriguing option for social entrepreneurs is crowdfunding: leveraging the power of the Internet and social networks to raise funds.
Crowdfunding can work with all types of businesses (as well as projects, art, expeditions, etc.) It’s important to have a good story, a polished idea, and lots of marketing savvy to get a project funded. Here are a few tips we’ve developed after scouring the Internet for success stories.
Work hard to build buzz
Remember that crowdfunding sites like Kickstarter and Greenfunder are just platforms for fundraising. It’s up to you to drive traffic to your funding site and convince users to donate to your project. It’s all or nothing – crowdfunding sites work on a 100% or bust philosophy. If you aren’t able to raise your full amount, all the money goes back to the donors. This puts the pressure on fundraisers, but it forces them to choose amounts that can be reasonably raised but will be enough to get a project off the ground.
Give your audience something to get excited about
If you’re already established in your niche, then you’ve got a built-in audience for your new project. If not, then spend some time thinking about who your business or project is targeting. Once you figure out who your true fans are, think about ways to make them excited about what you’re doing. Are you doing something new and special? Let your uniqueness shine through and don’t be tempted to appeal to a too-broad demographic.
Leverage social networks to get attention
Use Facebook, Twitter, your website, and your personal network to send people to your fundraising page. By publicly thanking backers on twitter and Facebook, you build buzz and get attention from their friends. Don’t be shy about emailing friends and family to tell them about your fundraising page and encourage them to spread the word.
Sites like Kickstarter feature fun and interesting projects on their front page. Shoot them an email once your page goes live and has some attention. If you successfully pitch them and end up on the front page, you can pick up some great PR. Internet culture sites often cruise Kickstarter and other crowdfunding sites and post about interesting projects.
Establish your credibility
The Internet is littered with half-baked schemes and dilettantes. You’re not one of those, right? Let everyone know up front what successful projects you’ve shipped and what skills you bring to the table. Be sure that you can deliver on your promises. Crowdfunding sites generally require you to offer perks to backers. Make sure that whatever prizes you offer won’t take away from the success of your project.
It’s completely possible to get funded as a first-time business owner, artist, writer, or whatever. Make your passion and commitment shine through each video, tweet, update, and message you send. Everyone loves an underdog, and if you can make them believe you’ve got what it takes, you can get funded.
Slow and steady wins the funding race. Make sure to stagger your promotional efforts over the course of the funding cycle. You want to launch with a bang so as to get some early attention and possibly have your project featured on your crowdfunding site’s front page. However, don’t burn all your candles at once. Save a few favors for when the donations slow down.
The middle of the funding cycle can be the flattest point, where you’re no longer new, but you’re not funded yet. Keep the momentum going by send out promotion requests to partners or interested organizations throughout the cycle.
Don’t underestimate the “Kickstarter effect” of the last few days of a funding cycle. Michael Galinsky credits this effect for putting his project over the edge. “[With] two days left to go, we were only 65 percent of the way there. Over the next 48 hours, we had a steady stream of pledges and …with five hours to spare, we crossed the $25,000 mark with nearly 400 supporters.”
Keep in touch with your backers
People become invested in the success of your project and they want to hear how it’s going. Send regular updates throughout the funding cycle letting people know about media attention, PR successes, and general information about how the project is going.
The constant contact is key to getting your current backers to promote your project and even donate more money. They can be the difference between a successful crowdfunding cycle and one that fails to meet its goal.
You also have an obligation to keep your backers in the loop. Many crowdfunding sites explicitly state that updates have to be sent, but even if they don’t, it’s important not to end the contact once the money is received.
Success! Bonus tips
You met your goal and your project got funded. Take a moment to savor the victory, and then plunge back in. Once you’ve recovered from the exhaustion or celebrations, here are a few things you should do right away:
• Announce your project’s successful funding
• Thank your backers profusely
• Thank them again on twitter, Facebook, and on your own site
• Mail out any freebies that you already have on-hand
• Inform your backers when they can expect to receive any other promised swag like DVDs or first-run products
• Update your project description with off-site links so that future visitors can find your project’s current home
Eco funding success stories
Here are a few examples of socially responsible businesses using crowdfunding as a tactic to raise startup capital.
In.gredients aims to be the world’s first zero-waste, packaging free grocery store. Founders Christian, Joseph, and Patrick Lane, turned to crowdfunding site Indie Gogo to raise funds for stock, rent, and marketing. Their funding cycle is still ongoing, but they’ve already raised a promising $10,000 of the $15,000 they need to get funded.
The Taste Kitchen is a mobile food cart business that will serve fresh, seasonal, locally sourced products with an emphasis on global flavors to residents of Fresno California. Founder Martin Franco has been cooking in West Coast restaurants for decades and is especially passionate about locavorism and bringing seasonal food to the streets. His Kickstarter campaign recently reached 106% of it’s $4,000 goal.
Sometimes campaigns don’t get funded the first time around. Ecologist Karl Cronin, creator of the Somatic Natural History Archive used Kickstarter to raise $1,000 to develop movement sketches to document the life histories of 200 plants and animals. However, his first campaign fell $3,000 short of its $5,000 goal and didn’t get funded. He says about that first failure: “The lesson I learned was, as in all fundraising, it’s more about how we’re engaging in a conversation with our key constituents and the people that we want to connect the work to. Are they finding value in it? Is it valuable to them?”
Remember, just listing your project on crowdfunding sites is merely the first step. Crowdfunding platforms are a tool. At the end of the day, you do need to apply all the principles of fundraising – relationship building, public relations, promotion, accountability – if you want your crowdfunding campaign to succeed.
About Daniela Baker
Daniela Baker is a social media advocate at CreditDonkey. She helps entrepreneurs find the right new business credit card for their startup. If you’ve successfully funded an eco project through crowdfunding, please give us any advice you have in the comments.