6 tips for entrepreneurs considering crowdfunding during challenging economic times
By ATB Financial 1 June 2020 2 min read
Tip 1: Rely on your crowd of supporters
The most important part of launching a crowdfunding campaign is leveraging your crowd. Your crowd will be the ones to connect with your story and ultimately decide to support your business, and you need to feel comfortable reaching out to them as your biggest supporters.
That crowd could be your friends, your family, your social media community, your subscriber base or your loyal customers. You’ll want to find a way to connect with them, share your story and perhaps even rely on them to share your campaign with their own communities and networks.
Tip 2: Remember that you are not alone
The coronavirus pandemic and economic downturn have affected everyone. While the challenges may be different, remember that each small business is going through something difficult and finding ways to address challenges.
Use this opportunity to connect with entrepreneurs (both that you know or may not know) about your struggles and your wins, and learn from one another as you navigate this crisis.
Tip 3: Be active on social media
Social media is a useful communication channel for small businesses, especially during a crisis. Keep your social media community up to date on what’s happening with you and your business (including sharing about your crowdfunding campaign).
Take this opportunity to deepen those relationships by being transparent and making your community feel like part of your journey.
Tip 4: Be ready to put in the work
Launching and completing a crowdfunding campaign takes a lot of hustle and determination, and is just one piece of ensuring your business’s future success. You’ll be working on promoting your campaign while also promoting your business, and it’s important to have a good balance of marketing messages that tie back to your business as a whole.
Tip 5: Take a step back and come up with a plan
Just as you came up with a plan when you first launched your business, coming up with a plan for launching a crowdfunding campaign is critical to your success. List all the things that you need to get through the crisis—how much money you owe every month to keep the lights on and the ways you might be able to pivot to stay afloat.
Know that you can't accomplish everything, but you can limit that list to what you need to do today and then continue to prioritize based on your business needs.
Tip 6: Do your research
Did you know that there are as many as 375 crowdfunding platforms in North America? That’s a lot! As you do your research, you’ll typically find campaigns falling into these four categories:
- Rewards based crowdfunding including sites like BoostR, Kickstarter and Indiegogo
- Donation based crowdfunding including GoFundMe and Facebook fundraising
- Debt based crowdfunding including FundThrough and Lending Loop
- Equity based crowdfunding associated with programs like Dragons Den, Shark Tank and FrontFundr
Look for a platform that aligns with your values and what you’re trying to accomplish. Also, take note of what the fee is to participate (some crowdfunding sites like BoostR are waiving fees for a period of time). No matter what platform you decide to use, you have to drive your own traffic there—and that takes a lot of hard work.