How To Start A Crowdfunding Campaign
The success of a crowdfunding campaign depends largely on the luck of the owner of the idea. Several people who have applied on sites like Kickstarter or Indiegogo agree that there is not much to do if the project does not receive much attention from the media, bloggers, or the general public and that this, although it is something that usually happens, it does not represent a failure. However, there are a few best practices that can tip the scales toward a flattering dish.
For those who are not familiar with the term crowdfunding or collective financing, it is a collection method through which a project and the money necessary to carry it out are presented on a website and users can donate the amount they want to help. with its precision. In general, these platforms have a reward system so that donors receive something in return.
Cromo spoke with Rafael Atijas, the Uruguayan creator of the Loog Guitars, three-string guitars that the user builds on his own. Atijas first used Kickstarter in 2011 to fund the first round of the guitars and then in 2013 to launch the electric version of the instrument. For the first campaign, Atijas raised US$65,000, although his goal was US$15,000. For the second round, it reached US$70,000 and its goal was US$50,000.
To begin
The first advice that Atijas gives to those who want to try their luck is that crowdfunding is not for any project. Regarding this, Atijas said that the public of this type of platform is very particular since in general, it is interested in artistic or creative projects that are focused on the final consumer.
"Maybe you have the best package delivery logistics system for South America, which can be a millionaire business, but it's not for Kickstarter," he exemplified.
Once it has been decided that the project is compatible with crowd financing, it is essential to get the numbers right before launching into the will of the collective. That is, not asking for less money than is needed, but on the contrary, working with margins of error so as not to be very fair. Within this amount, the commission costs to the platform and the retention that is made from the payment systems must be considered.
This is especially recommended when setting rewards. Doing so can save a few headaches because if a campaign reaches its goal, the rewards have to be sent to backers no matter what. If the requested amount is not enough, the person who applied for the project will end up losing money. In addition, it is recommended that the prices of the rewards clarify the price of shipping the product since a large part of the contributors will be abroad.
Video game veteran Charles Cecil gave a talk during Gamelab (an international event for video game developers that took place in Montevideo on December 8) about his Kickstarter funding campaign for the fifth installment of the game Broken Sword. Cecil pointed out that, when analyzing the numbers, he realized that the rewards for donations of US $ 100 were the most requested since it is a sum with which important physical rewards can already be delivered.
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Keep in mind that in Europe or the United States people are more likely to be willing to put their credit card on a web page than in Latin American countries, so it is recommended that the project be written in English.
There is only one obstacle in Kickstarter for those who want to publish a project from Latin America: to carry out a campaign, you must have a bank account in the United States as a resident of the country. One option to get around this is to use someone with a US bank account, as this does not require the account holder's name to match the Kickstarter user. "Kickstarter is something that is not designed for companies, but for people. You do not have to have a company in the United States or a corporate account," said Atijas.
If this becomes an obstacle, there are other sites such as Indiegogo or Idea. me that do not have any limitations on residence or payment systems. Idea. me, in particular, is a crowdfunding site founded by a group of Argentines that provides different facilities for users from different countries in the region (see Five platforms).
Make yourself known
Before you start your campaign, one piece of advice from Cecil is to create as much impact as possible. In his experience with Broken Sword, the Englishman said that he spent time talking to the media about the game with the promise that they would not publish the note until launch day. So, the day the funding campaign went into effect, a whole wave of the press was generated around the project with such an impact that the game was funded for the first few days.
Once a campaign is started, the key is not to let go. "You really have to do a campaign, you have to be working day and night," said Atijas, who added that you always have to be looking for places to publicize the project.
One option is the media, but there are also bloggers who write about specific topics and may be interested in writing about a related project. "It's running against time. The project may be great, but if the right people don't find out, it could still fail," said the creator of Loog Guitars.
The first thing that catches the eye when entering a project page is the presentation video. In it, those responsible for the project try to present the idea in such a way that it is attractive to potential investors. It is the cover letter. One false step and the user will go straight to the cross icon.
"I recommend being as sincere and direct in the tone with which you communicate with people. You don't have to put on a character and say that you are going to save the world, you don't have to go to the other side with the feeling of community. You're there trying to run a business and there's nothing wrong with that, you don't have to hide it," Atijas recommended.
On the other hand, it is exhorted that the final result of the video is not a blockbuster, but that the homemade component of the product can be seen. However, this does not mean that the aesthetics of the video should be neglected: "It has to be something that is not painful to watch (it can be well filmed with a camera), that conveys the idea well and that explains to the people why it is good that they contribute", added Atijas.
Cecil's final advice is to know how to finance each stage of the project: "In the first stage, because it is the riskiest, it is logical that we have to put our own money. With that, a prototype can be made that can already be published on Kickstarter It needed more money, but the project is already secured by crowdfunding, investors can be used there."
platforms
Idea.me
Idea.me is the Latin American version of Kickstarter. The advantage of this platform is the two forms of collection. The first one is "All or nothing", whereby if the project does not reach 100% of the collection goal, the money is returned to the collaborators. On the other hand, in the "Everything adds up" mode, a goal is also set, but in the case of not reaching it, the entrepreneur also collects the proceeds and delivers the rewards to the collaborators.
Kickstarter
The most recognized platform on the internet accepts mainly creative projects. It has a rewards system and you must have a bank account in the United States. The costs are 5% of the amount collected for each successful campaign and between 3% and 5% for the payment processing.
Indiegogo
Similar to Kickstarter, only it does accept charity-related projects. You do not need to be a US resident, just a PayPal account. But beware, in this case, the platform will charge 25% of the proceeds.
GoFundMe
to finance any project, whether it is the creation of a video game, a charitable cause, or even a vacation trip. GoFundMe charges 5% of each donation received and PayPal can be used as a payment processor, which charges about 3% for the service.
Pledge music
This site is mainly focused on financing projects related to music. Pledge music usually charges 15% of the proceeds, so think twice before launching, but the donor will always receive a digital copy.
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