How to make your Croydon crowdfunding campaign a success

By - Monday 24th August, 2015

Jonny Rose offers counsel to those who seek money from the public wallet

Recently, I wrote about the phenomenon of online “crowdfunding” – the practise of using the internet and social media so that individuals and businesses can pledge money online to a good cause – and the potential that it has for supporting many of the civic improvement ideas of Croydonians.

Think of a crowdfunding as an electoral campaign: it’s time to pull favours, message everyone you know, host and attend events, etc.

The impression that I may have given is that crowdfunding is easy. “Build it and they will come”. This isn’t the case at all. The mechanics of crowdfunding are such that it requires careful preparation, attention to detail and monitoring throughout the time in which you are crowdfunding.

How to run a successful crowdfunding campaign

Whether you are a Croydon startup founder looking to fund your next venture or a civically-minded Croydonian looking to get your local initiative off the ground, there are some solid rules and principles that should be applied by anyone before they launch their next bid for the public’s monies:

1. Research the platform that you choose wisely

There are five types of crowdfund: equity, donation, reward, debt/peer-to-peer lending, and royalty (which takes a percentage of future revenue in return for investment). The crowdfunding platform that you choose will be the shopfront for your campaign, so take a look around to get a feel for projects and perhaps sign up to a few to see how often they send newsletters and promote projects. Choose the platform that best matches your ethos, organisation and brand.

2. Make the benefits of investing in your idea clear

Point out why investing in your idea or initiative would be awesome. Explain how an investor benefits (eg, EIS tax relief, rewards, return after what period), and how you know they will see those benefits (e.g., your USP, years of experience, track record or quality of team)

3. Always be selling

Don’t just stick your idea on a platform and leave it: in the words of Alec Baldwin in Glengarry Glen Ross, “always be closing”.

You need to be personable, likeable and get in front of as many people as possible. Getting people to part with their hard earned money depends on your likability as much as on your strength of idea. Just think of a crowdfund as an electoral campaign: it’s time to pull favours, message everyone you know, host and attend events, hold open sessions for investors to come and meet you and appear in video interviews.

4. Family and family first

In general, the first 30% of your crowdsourced funds will come from your friends and family, the next 30% is invested by your wider circle of associates and partner networks, and the final third is the “crowd”.

While people may be brilliant at retweeting, to get investment rolling you have to reach out personally and line up investors before hitting each stage. To achieve this, make sure that a campaign does not start at zero. Helpfully, some platforms do soft launches before a general release to the wider public.

5. Be aware of the 10%-50% danger area

Studies have shown that the likelihood of people giving money increases with funds raised. For instance, if you’re trying to raise £50,000, every time your go beyond a £10,000 marker, your likelihood of investment supposedly increases by 4.1%. The closer you come to your target, the more likely you will make it. But, just after your initial launch is when your campaign will most likely fail.

The average amount funded by failed projects is 10.3%, and 97% of these failures never make it past 50%. So, 10-50% is the danger area and you need to get out of it as quickly as possible. Keeping momentum requires you constantly showing success to followers of your campaign, so keep thinking about timing success stories, press coverage, and anything else that you can do to keep all eyes on your crowdfunding goal.

Matthews Yard is currently running a campaign to fund a new workspace and garden. To support their efforts and contribute, please go here.

Jonny Rose

Jonny Rose

Jonny Rose is a committed Christian who has lived in the Croydon area for nearly twenty years. He is an active participant in his local community, serving at Grace Vineyard Church and organising Purley Breakfast Club, and was ranked "Croydon's 37th most powerful person" by the Croydon Advertiser (much to his amusement). He owns a lead generation company. He is the Head of Content at marketing technology company Idio, the founder of the Croydon Tech City movement, a LinkedIn coach, and creator of Croydon's first fashion label, Croydon Vs The World. Working on Instagram training and a Linkedin lead generation service. Views are his own, but it would be best for all concerned if you shared them. Please send your fanmail to: jonnyrose1 (at) gmail (dot) com

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  • moguloilman

    Good advice from Jonny.

    I am a big fan of social media and the possibilities for the internet to change the world, but crowdfunding seems to me is a disaster waiting to happen.

    I have participated in a number of such fund-raisings. They are fine if you want to feel good about yourself and to contribute to what looks like a good cause, but don’t expect to see your money ever again, and don’t expect the promise to be delivered. A bit like high risk stocks and shares.

    Longer term I expect this to be a useful tool for raising money but it will take a few highly publicised disasters before the public understands it and the regulation is worked out.

    • Anthony Miller

      Crowdfunding is regulated by the Fundraising Standards Board – complain!
      Everything’s got a ombudsman. Even being middle class.

  • Jack Gaskin

    Hello Croydon if you are looking to crowdfund please get in contact with me I run a crowdfunding site called Phundee we specialise in entertainment and art

  • Anthony Miller

    I can’t believe there are so many thick people with money to just give away to other people. I’d rather die than ask my family or anyone else for money and I’d rather set my cash on fire than give it to a crowdfunded idiot rather than a real charity.

    Crowdfunding. Shares that pay nothing but smugness.