Crowdfunding can be a rewarding, alternative solution for startups seeking funds for the first manufacturing run of their product. For companies, the most popular crowdfunding platform tends to be Kickstarter, but a few close runner-ups include GoFundMe, Indiegogo, SeedInvest, WeFunder, and Fundable. All of these crowdfunding platforms have their own unique policies, from all-or-nothing reward models to percentages of equity.
While the goal of a crowdfunding campaign tends to be the same for most startups, there are a number of different ways to approach one. Here, two CEOs from two Wayfinder startups share their experiences launching their own crowdfunding campaigns on Kickstarter.
1. Play to win on day one
After launching a successful Kickstarter campaign in 2017, Waterborne Skateboards CEO Patrick Dumas learned that a crowdfunding campaign should aim to reach its goal no later than the day it launches.
“The battle is won or lost on day one,” said Dumas. “Winning the battle on day one proves that you are one of the most successful campaigns out there, and that you’re worth backing.”
2. Make a reachable, realistic goal
With winning in mind, it’s always better to have a successful crowdfunding campaign with a low goal than a failed campaign with a high one. Thus, the goal number on the campaign page should not reflect what the company wants, but rather what the company actually needs.
To help establish a feasible crowdfunding campaign goal, two-time Kickstarter successful participant and founder and CEO of Mind Brain Parenting, Jenny Woo, suggests to “look at other comparable products, or price range of products to determine what your goals are.”
3. Start planning early
Dumas and Woo agree that startups that already have a prototype can take at least two-to-three months before the launch date to prepare and promote their crowdfunding campaign. During this prep stage, startups can make the most of their promotional power by running ads, contacting potential blogs and newsletters, or doing some in-house digital media creation for the campaign page.
4. Credibility is key
Building trust with potential pledgers is essential to getting their support. While having a professional-looking campaign certainly helps, showcasing the support of individuals and organizations people can trust will boost the efficacy of the crowdfunding campaign beyond what high quality media can do.
“Credibility is huge,” said Woo. “Getting testimonials from credible people to show trust is pretty important.”
Learn more about UCI Beall Applied Innovation’s funding resources.
Illustration: Kate Wokowsky, UCI Beall Applied Innovation