CONTENTS. Acknowledgments... vii Preface... ix Introduction... xi

CONTENTS Acknowledgments . . . . . . . . . . . . . . . . . . . . . vii Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Introduct...
Author: Dina Stevenson
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CONTENTS

Acknowledgments . . . . . . . . . . . . . . . . . . . . . vii Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Introduction . . . . . . . . . . . . . . . . . . . . . . . . . xi chapter 1

Crowdfunding Explained . . . . . . . . . . . . . . . . . . 1 History and Overview . . . . . . . . . . . . . . . . . . . . 2 Benefits Beyond Capital . . . . . . . . . . . . . . . . . . . 5 Convincing the Crowd . . . . . . . . . . . . . . . . . . . . 8 Your Crowdfunding Potential . . . . . . . . . . . . . . 11 chapter 2

Types of Crowdfunding . . . . . . . . . . . . . . . . . . 13 Platform Models Defined . . . . . . . . . . . . . . . . . 13 Who Should Consider Which Funding Approach? . 16 Sampling of Key Crowdfunding Websites . . . . . . . 20 Choosing a Crowdfunding Platform Checklist . . . . 27

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chapter 3

Preparing a Successful Crowdfunding Campaign . . . . . . . . . 29 Reviewing Guidelines and Projects . . . . . . . . . . . . . . . . . . . 29 Gathering Your Crowd—Those You Know and Those You Don’t . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Building Your Campaign Elements . . . . . . . . . . . . . . . . . . .39 Campaign Timeframe: Shorter Is Usually Better . . . . . . . . . . .48 Video—Power in Your Pocket . . . . . . . . . . . . . . . . . . . . . . .50 Video Tips from a Pro . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Are You Ready? A Pre-Launch Checklist . . . . . . . . . . . . . . . .63 chapter 4

The Art of the Ask (Campaign Launch) . . . . . . . . . . . . . . . 65 Driving Traffic to Your Project . . . . . . . . . . . . . . . . . . . . . 69 Real-World Gatherings . . . . . . . . . . . . . . . . . . . . . . . . . . .73 Overcoming Mid-Campaign Blues . . . . . . . . . . . . . . . . . . . .74 Re-Launching a Failed Campaign . . . . . . . . . . . . . . . . . . . .76 Your Campaign Launch Checklist . . . . . . . . . . . . . . . . . . . .78 chapter 5

Keeping Your Backers Happy . . . . . . . . . . . . . . . . . . . . . . 79 Managing Donor Expectations . . . . . . . . . . . . . . . . . . . . . .79 Reward Fulfillment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82 Reward Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Tax Considerations: Don’t Forget the IRS . . . . . . . . . . . . . . .84 Post-Campaign Checklist . . . . . . . . . . . . . . . . . . . . . . . . .87 chapter 6

Equity Offers—Share in the Fun(d) . . . . . . . . . . . . . . . . . . 89 First, the Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90 Latest Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 How to Prepare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Educational Resources for All Forms of Crowdfunding . . . . . . 98 conclusion

Reinventing Financing $100 at a Time . . . . . . . . . . . . . . . . 99

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appendix a

Crowdfunding Toolkit . . . . . . . . . . . . . . . . . . . . . . . . .101 Social Media Management Tools . . . . . . . . . . . . . . . . . . . 101 Idea Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Campaign Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Backer Relationship Management . . . . . . . . . . . . . . . . . . . 103 Product Manufacturing Liaison . . . . . . . . . . . . . . . . . . . . 103 Post-Campaign Product Marketplaces . . . . . . . . . . . . . . . . 103 appendix b

Frequently Asked Questions . . . . . . . . . . . . . . . . . . . . . .105 Can I run a campaign simultaneously on more than one crowdfunding platform? . . . . . . . . . . . . . . . . . . . . . 105 Do I have to be a legal entity to post and raise funds? . . . . . . . 106 Can I crowdfund if I want to keep my not-yetpatented product/invention confidential? . . . . . . . . . . . . . 106 Why do crowdfunding sites screen the projects they post? . . . . 107 Do platforms charge upfront fees in addition to the success fee on funds raised? . . . . . . . . . . . . . . . . . .107 About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109

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INTRODUCTION

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f, like me, you don’t have an impressive list of investors at hand, this book is for you. Take heart in the fact that while you may not know one person who can write you a check for $5,000, I bet you know 100 people who, if you had a good idea, would each give you $50. Raising money this way—from many people in small increments—is the essence of “crowdfunding.” Crowdfunding, where individuals appeal for contributions from the public using an online platform, is becoming a powerful way to fund new entrepreneurial projects and ventures. Massolution, a research and advisory firm specializing in crowdsourcing, reported that in 2012 crowdfunding platforms grew 81 percent and raised $2.7 billion; they are forecasted to bring in over $5.1 billion in 2013. Although this has the potential to be a tremendous financial boon to entrepreneurs and innovators, on average 60 percent of all crowdfunding projects fail. xi

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So what does it take to win the hearts and wallets of potential backers? By applying the advice and strategies in this book, you can properly prepare and communicate your project with passion, creativity, and the effectiveness required to fund your dream. Along with a brief introduction to what crowdfunding is and for whom it works best, this book offers tips, best practices, and resources for creating and running a successful crowdfunding campaign. The advice covered is segmented into “Pre-Campaign,” “Campaign Launch,” and “Post-Launch” sections and includes insights from successful and unsuccessful project owners. The book closes with an overview of the new laws currently being shaped that will soon allow for equity crowdfunding investment and includes helpful checklists, as well as links to examples of effective campaign videos. Even though this book focuses on entrepreneurial campaigns, the advice can be applied to any form of crowdfunding, whether for social causes, art and science efforts, educational endeavors, or any other ideas that need support. As John Allston once said, “The only thing you take with you when you’re gone is what you leave behind,” so . . . go build something!

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