The Top 3 Do’s and Don’ts of Raising Money Online
By Danae Ringleman
Here are three do’s and don’ts.
My co-founders and I started Indiegogo seven years ago to empower people anywhere in the world to fund what matters to them. As a result, businesses, artists, non-profits and individuals have raised millions of dollar for their small businesses, entrepreneurial pursuits, creative endeavors and personal causes. If you’re considering crowdfunding to take your venture to the next level, first Congrats! Second, below are my Top 3 Do’s and Don’ts for running a fundraising campaign.
TOP 3 DO’S
1. Tell your story
Authenticity wins when raising money. People don’t just fund what you are doing, but they also fund you and the impact your project will have on the world. Share your full story. How did your business or project start? Why did you start it? How far has it come? And finally, how, and how much money do you need to fundraise to complete it?
2. Share with your communities
As my colleague Jenn at Indiegogo always reminds me: “sharing is caring.” Start the sharing momentum yourself. Indiegogo makes it easy for viewers and backers of your campaign to share with their friends and family. Your community will be excited by what you’re doing and eager to support you. Let the floodgates open.
3. Update your backers
As your campaign progresses, keep your backers updated, not only on fundraising progress, but on your venture as a whole. Did team members join? Did you establish new partnerships? Are you launching a brick-and-mortar business? Your backers are your extended team, your alpha customers, and your de facto evangelists. Keep them in the loop so that when your doors open for business; they’ll be the first to shout it to the world and bring new supporters with them.
TOP 3 DON’TS
1. Don’t “ask” for money
I know, it sounds counterintuitive. But when launching a campaign, the biggest mistake I see people asking for money. You don’t want to beg. Guilt is a weak motivator and begging sends the wrong message. Instead, treat your campaign as an opportunity to be part of an effort to change the world. By funding a bicycle cafe in their neighborhood or a new educational children’s toy, people are collaborating in unprecedented ways in the creation process. It’s empowering. Rather than asking for money, invite the world to be part of the movement, project, or venture you’re leading.
2. Don’t raise 100% of your funding goal in one campaign.
Very few companies raise all the money they need in one step. Start small if you’ve never run a campaign before. Identify how much money you need today to move your business to its next milestone tomorrow. Make that amount your funding target, and outline how you plan to use it. Also, identify any stretch goals – i.e. how you’ll spend any funds raised beyond your target. Once the campaign ends, put the money to work, update your contributors when you reach your milestone, and start preparing for your next campaign. The people who funded you once, will fund two and three times if they see meaningful progress.
3. Don’t wait for perfect.
Take a small step today, and another small step tomorrow. Many people are paralyzed by trying to design the perfect business plan or the perfect Indiegogo campaign. In the search for this unattainable perfection, days, weeks and even months may go by and you’ll have made no progress towards realizing your dream. So, accept the following facts. 1) Your idea will inevitably change as you start navigating the start-up waters. 2) Trial, error and iteration are the only way you will ultimately build a successful business with products and services that people actually want to buy. 3) An Indiegogo campaign will help you test your model (pricing, services, features, messaging, etc.) with the real people that comprise your market. Start a campaign today, gather feedback tomorrow, and be on your way to bringing your business to life.
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