Crowdfunding organizational growth
Most entrepreneurs find it difficult to access funding for their business ventures. In fact, an astonishing 98% of all new business plans are rejected by Venture Capitals (and that’s if they are lucky enough to get an introduction). Crowdfunding presents another option. This practice generates funds by raising numerous small amounts of money from a large number of people typically via the Internet and social media.We’ve been hearing a lot about this concept but not because it is new. In fact, the concept has been around for centuries. But the parameters are set to change since the passing of the JOBS (Jumpstart Our Business Startups) Act this past April. Prior to the JOBS Act, crowdfunding was limited to operating on a reward or donation-based platform meaning that investors could only receive a product or discount in exchange for their investment. The JOBS Act is working to change that by permitting company equity to be received in exchange for funding which may cause us to see an explosion of crowdfunding. If you’re looking to launch your own crowdfunding project, you’ll need to start with a good pitch.

Crowdfunding pitch
Your pitch can make or break your crowdfunding efforts. Make sure it outlines a fundraising goal, a timeline and what rewards are being offered in exchange for investor dollars. It should clearly state exactly what your business idea is, its key selling points and marketplace differentiators. Below are some important points you’ll also want to address in your pitch:

  • What is your background and why should investors trust you?
  • What is your project, what does it look like and what’s so great about it?
  • What marketplace research did you conduct and why is there the need for your product or service?
  • How much money do you need and how will you use this money?
  • How long will the project take and how do you plan on updating investors on its progress?

Make sure your pitch showcases not only the project itself but the fantastic team that is going to make it happen. A video can be a great way to do this. Videos should be short, simple and engaging. In fact, your entire presentation shouldn’t be more than 2-3 minutes.

Once you have the perfect pitch, you need to launch it. Reach out to friends, colleagues, the media, the community at large and organizations with like interests. Develop distribution lists from your email addresses and post to various social media outlets asking your contacts to share your information.

Don’t forget to let investors know what’s in it for them. Although you may have friends and family who want to participate to show their support, most will want something in return for their contribution. Here are some ideas:

  • The product itself: You may want to offer a deeply discounted product to investors or the opportunity to be the first to buy the product once it comes to fruition. You could also offer enhanced versions of the product such as those that are autographed or limited editions.
  • Merchandise: You may offer investors commemorative items such as logo’d caps, T-shirts or messenger bags. Distributing posters, buttons and other souvenirs can be a great way to celebrate this exciting process.
  • Product involvement: Appeal to some investors by giving them access to behind-the-scenes footage of the product-in-the-making or the opportunity to give input during the process.
  • VIP treatment: Treat your backers well by granting them exclusive access to launch parties and other non-public events. Consider presenting them with rewards or plaques to publicly acknowledge their important role  in the birth of your product.

Crowdfunding can be a great way to generate funds for new business ventures. A simple pitch, a great idea and a lot of passion will go a long way.

Prive, Tanya. “Inside The JOBS Act: Equity Crowdfunding.” Forbes. Forbes Magazine, 06 Nov. 2012. Web. 19 Jan. 2013.

Prive, Tanya. “What Is Crowdfunding And How Does It Benefit The Economy.” Forbes. Forbes Magazine, 27 Nov. 2012. Web. 19 Jan. 2013.

Steinberg, Scott. “How to Create an Amazing Crowdfunding Pitch.” The Huffington Post. TheHuffingtonPost.com, 08 Aug. 2012. Web. 19 Jan. 2013.

“Welcome to the Help Center! The First Step Towards Finding a Solution.” Rock The Post. N.p., n.d. Web. 19 Jan. 2013.

“Need More Crowdfunders? Try These Lures.” Inc.com. N.p., 17 May 2012. Web. 19 Jan. 2013.

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