Crowdfunding and How To Make It Work For You

Marc J. Kelly

We all keep hearing all the stories about how companies have been successful at raising money through Crowdfunding. The new JOBS Act also has provisions that will allow entrepreneurs to open the fundraising to more people. In any case, where does one go to find the crowd and how does one get them to part with their cash?

Top Crowdfunding Platforms

The most popular platforms right now are RocketHub, Kickstarter, and Indiegogo. Kickstarter is geared toward American and British projects, while Indiegogo and RocketHub are geared towards global investment. The differences lie primary with the payment processing. Kickstarter uses Amazon as its merchant system; RocketHub uses Chase, while Indiegogo uses PayPal.

There are also differences on the types of projects emphasized by each platform. Kickstarter tends to focus on creative projects, artists, and the like, while Indiegogo and RocketHub have a wider focus and welcome projects of many types.

Also, the platforms differ on what happens during the fundraising process. Kickstarter has an All-Or-Nothing model where you must reach your total financial goal; otherwise, all of the pledged money goes back to the contributors. RocketHub and Indiegogo allow you to keep the money you raise even if you fall short of your goal.

How to Crowdfund

1. Describe your project. It all starts with the project. What are you building? Tell the world that you are great. Then tell us the world why! How are you going to change the world? How are you going to make people's lives easier/more fun/more engaging? You need a compelling story that will grab a potential funder's interest.
2. NetworkBuild your network. Now you have to publicize your campaign amongst your network and get members of your network to do the same. Utilize the social media landscape to get people talking about your project. Get others involved. This isn't just a funding push but also a PR campaign. You want as much good press you can get. Reach out to people in the industry that would be interested in your project. Writers, bloggers, newsletters -- no one should be exempt from hearing about your campaign.
3. Show the goods. Now that you've gotten everyone buzzing about you, you have to fulfill the WIIFM (What's In It For Me) quota for your contributors. People like to feel like they are a part of something. Your job is to bring them along with you on the journey. For their contribution, funder's should receive something in return. Recognition, product, services, or access to experiences are ways to thank your contributors and reward them for believing in your dream.

Measuring the Success of Your Crowdfunding Campaign

You have your campaign ready, you understand what you need to do, and you want to know what the next steps are.

Don't believe the hype. Just because a similar project was successful does not mean you will be. You have to be different. You have to be exciting.

No field of dreams. Just because you build it, does not mean they'll come. You have to publicize your campaign and get others to get the word out.

Set a reasonable financial goal. Crowdfunding in its current state will not get you a million dollars. This platform is built for a seed investment. Also, you may not reach your funding goal. Build in a buffer and be prepared to work with what you get because that's what entrepreneurs do!

About Marc J. Kelly

Marc is an entrepreneur, mentor and coach in the Greater New York Area. Marc comes from a strong financial background with a varied skill set and a wealth of experience. Marc earned his B.B.A. from Iona College and is currently studying in the MBA program at the Zicklin School of Business at Baruch College.

Marc began his career with premier financial firms, tenures with firms which have included Alliance Bernstein, Merrill Lynch and JP Morgan. Marc is an expert in Operations Management and Financial Advisory. He also currently holds a Series 7, Series 66 and Life, Accident & Health Licenses.

Marc also volunteers his time as a mentor for iMentor, a premier youth mentoring group in New York City. He has also volunteered as a tax preparer for the United Way’s MoneyUp program.