Understanding Crowdfunding: What Your Account Manager Wants You To Know

Crowdfunding can be overwhelming, and understanding crowdfunding isn’t easy. You have a great idea that you believe people will love. But launching that product isn’t as simple as it might seem. Here’s what our account managers want you to know about crowdfunding before you even get started down this path.

You have to spend money to make money

This is often a big pain point for project creators. But, proper budgeting ensures that you’re investing in your big idea from start to finish.

When it comes to Kickstarter and Indiegogo campaigns, your budget should include everything from creative asset development, advertising dollars, email marketing efforts, sunk costs, shipping fees, etc. We often find clients invest too much into one area, fail to consider other financial expenses and are crippled when they find themselves with unexpected costs.

Of these categories, many project creators fall short when it comes to asset development and setting a realistic advertising budget. The more time and money you’re able to invest in your project, the more flexibility you’ll have when it comes to page designs, social posts, and ad testing.

You likely won’t raise $1M or be the “world’s first”

Only 611 of the 212,619 successfully funded projects on Kickstarter have raised $1M*. That’s less than one percent. While the odds of you raising $1M for your project is low, that doesn’t mean your project won’t be successful. In fact, crowdfunding is a great way to prove market validation, collect product feedback from your backers and build a strong, loyal fan base for future projects.

Additionally, we have to break it to you that your product probably isn’t “the world’s first.” In fact, Kickstarter explicitly states that creators should avoid puffery and exaggerated claims. Research your product’s key points of differentiation and emphasize them in a straightforward way. If you can prove your claims with data, do it. Above all else, stay true to your brand for a more enjoyable fundraising experience and you’ll also collect insightful campaign data.

*As of December 1, 2021

You must communicate and engage with your community

At Enventys Partners, we help our clients with backer updates, social media posts and more. However, we want our project creators themselves to engage with their community of backers—after all, they’re the individuals supporting your big idea. If you do this right, they’re more likely to support your future projects.

Not only do Kickstarter and Indiegogo recommend posting backer updates regularly (we suggest one to two updates a week), but project creators who don’t engage with their backer community are more likely to fail. Unresponsive project creators tend to be a red flag for backers. If they’re not replying during the live campaign, who’s to say they’ll be communicative once it’s over?

As time-consuming as it may seem, take the time to respond to your backers in the comments section of your project page, on social media posts and on any paid ads. Write thoughtful and honest backer updates from launch to delivery, and take any backer feedback as a way to make your product even better.

You must accept that every project is different

Creators often come to us with examples of other, similar projects that raised hundreds of thousands of dollars. We always research existing competitors and crowdfunding projects in your space, but it’s important to keep in mind that projects are almost always apples to oranges comparisons. We don’t know what the paid advertising budget was for other campaigns and we don’t always know if they had a list of previous backers or a large email list.

Additionally, timing is key. If a project is a true disruptor in its category then they’re more likely to raise a lot of money. The best workaround for a product that offers backers an enhanced version of something that’s available on the market is to determine your key points of differentiation to show how your product is better.

Lastly, some projects may not be a good fit for crowdfunding at all. Dive into the data and your campaign findings to determine if ecommerce is a better route for you and your brand.

Experience in the crowdfunding space goes a long way

Crowdfunding is an exciting and niche space. At Enventys Partners, we can apply our experience and expertise to consult, create and promote your product on Kickstarter or Indiegogo. Reach out to us for more information when you’re ready to launch your big idea!