Crowdfunding. Oh how it boils my blood. For those who have some how managed to avoid it (I have no idea how you’ve done it, but if you have please share you secrets) Crowdfunding is social media’s answer to raising money for a project from your friends, family and if you’re lucky enough to go viral, the rest of the world. It’s a complex system that passes itself off as looking easy and something that anybody can do, but that’s far from the truth. As I watch my Twitter and Facebook feeds fill with more and more poorly managed crowdfunding campaigns I thought I would offer some advice to budding social money raisers.
It should be noted I am not a professional crowdfunder, I don’t do it for a living, but I have worked on both successful and unsuccessful campaigns and I’d like to share some tips and tricks that I’ve learned from working on them.
I remember when I first discovered crowdfunding. In fact it’s probably the same reaction everyone has. “This is a gift from God! An easy way to make that money I need for this project I’m working on.” But the truth is far from that. At the end of the day I hate crowdfunding. Whenever a team member turns to me and says “Sean, let’s create a crowdfunding campaign” I groan. Too many people think crowdfunding is a miracle cure, too few people understand the complexities and difficulties of creating a successful campaign.
My least successful campaign raised $311 out of a $10,000 target. The goal was unachievable. We were new at the game. We didn’t have the network to make it possible. Our pitch wasn’t very good. On the other end of the scale my most successful campaign almost didn’t happen, at the time it was a battle as to whether we would campaign or not. Those discussions were important though, we strongly debated whether it was necessary to campaign or whether we could raise the money elsewhere. In the end it was deemed the only way that we could raise the money we needed and that we had a network that would be supportive enough. We raised over $10,000. It was a last resort that was managed as a well oiled machine, with two weeks of build up work prior to launch. All this took a lot of time away from being able to focus on other areas of the project that needed just as much attention though, adding a lot of stress and pressure to company members.
So if you still really think you have to crowdfund for your project, here are some tips that I’ve picked up along the way.
Crowdfunding is a full time job on top of whatever other full time jobs your entire team will be doing at that point in time. It requires constant attention, constant communication through your networks, and significantly more time spent on it than a tweet every couple of hours.
Know your network and set a target appropriate to the size of your network. The best time to crowdfund is when you have your entire team in place so that you can gain leverage off everyone’s contacts and networks, no one is exempt, everyone has to reach out.
I believe it’s possible for an individual to raise $500, a lucky individual $1000. Keep that in mind when you’re setting your target, especially if you’re going at it alone.
Want to raise $10,000 you’re going to need around 150 supporters, mainly selecting perks in the $50 or $100 range. When we raised this amount for the new musical Margaret Fulton: Queen Of The Dessert that was about 1% of our combined network reach donating to the project.
Timing is key! Has someone else on your team recently crowdfunded for another project they’ve been working on? If so, you’ve lost their network. I recently had this issue whilst crowdfunding for a development of the new musical Facing East in Dallas. Our writers both had other new shows they were raising money for a few weeks before our campaign. It had a definite impact on the amount we were able to raise.
Outreach and communication is imperative! A simple tweet sent out into the universe once a day (or worse multiple tweets on an hourly basis) will not bring supporters out of the woodwork. Get personal! Producing 101 states that people invest in people and not projects. Your friends are more likely to support you because they know you’re a hard worker, or they know how passionate you are about something. Talk to people. Send EVERYONE in your address book an email, private message all your friends on Facebook. Call people. It’s not easy. You’re virtually begging. But if you’re going down this path and you want to be successful that is what you have to do. And it’s actually what a real producer does to raise real investment finances for a project too.
Anyone can make a crowdfunding campaign, but not everyone should. Not everyone understands how to properly finance a show. Don’t ruin your friendships because you promised to pay people but then relied on a failed crowdfunding campaign to cover these costs.
Know your platform. Each crowdfunding website has different pros and cons. Most go by the rule no money unless the target is reached by the end of the campaign time, but some allow you to take home any money pledged. Some work in different currencies, some only in US dollars. Some even allow you to continue selling your crowdfunded product through an online store you can create after your campaign has ended. Each will take a different amount of commission too. Yes that’s right, not all the money people donated to you will go to you. Keep that in mind when setting your target too.
Perks will impact the amount of money you raise. Did you promise a t-shirt? That’s going to cost $30 to print, plus postage. Hope you didn’t list it under a $30 category. Giving away tickets? Make sure you’ve spoken to your venue and are allowed to do this, and don’t list their perk value as their face value, get a ticket sale and a donation out of it. Don’t promise a hug. I think that’s stupid. Unless you know Brad Pitt and he’s willing to hug someone for $10,000.
Follow through on your promises! Don’t list perks, take peoples money and then never deliver what you promised, or all of what you promised. It’s a classic mistake. I’m still waiting for so many perk promises.
Present your campaign in a professional manner. It may only take five minutes to get a campaign profile online, but it shouldn’t take five minutes to put your campaign online. Film a professional campaign video that runs less than five minutes. Decide on a tone, play to your target audience. Is it personal? Is it a certain team member talking? Is it purely informative? Show your product in it’s best light at whatever stage it’s in.
Don’t have 20 different perks. Keep it simple. Start at $10, definitely have a $50 and $100 category, a few larger categories won’t hurt, but people probably also won’t select them.
Most people don’t have $1000-$5000 lying around. If they did and were investing it in something, they’d probably want it to be a proper investment, where they might get a return if the project is successful. Don’t spend too much time making $1000-$5000 perk promises. No matter how cool you think they are.
Crowdfunding may be able to turn what would have been a no paying gig into a low paying gig, but don’t think someone still isn’t getting ripped off in the process. You may be paying an actor, but you’ve just asked someone for $50 for a signed postcard and a hug, and you’re going to ask them four weeks down the track to sped another $30 on a ticket. What are they getting in return? Be very careful when crowdfunding, as you can quite quickly alienate those close to you. Don’t forget there are other more traditional ways to raise funding for a project. Grants, sponsorship and investment are just the beginning.
At some point in the campaign you will start to sound desperate and appear to be a beggar. Everyone on your social media circles will be annoyed at your consistent posting asking for more money. They will switch off. Be careful with how you time requests for donations, be conscious of how you sound. Also worth thinking about before starting a campaign is how does this begging affect your professional image? Is it worth it?
Phew, that’s a lot of stuff, and it’s just tip of the iceberg.
Still want to create a campaign?
Remember crowdfunding is not THE solution. You will not raise all the money you need for any project through crowdfunding, though you might be able to raise a portion of it. It’s time consuming, it’s often a major failure of an enterprise, you’ll be lucky to pull it off. Crowdfunding is not the solution, it is an option, and I believe a last resort.
So please, I beg you, stop crowdfunding. Find another way. Raise funds the way producers have done it for years. But if you genuinely, truly have to crowdfund, do it in a professional, sustainable, effective way, and take some of my tips and experiences on board with you to help create a better, and hopefully successful campaign that doesn’t alienate too many of your friends and colleagues in the process.