There is no shortage of information available on how to prepare, organise and run a successful crowdfunding campaign, along with informative market data.
In the UK the industry has its own professional body, the UK CrowdFunding Association – UKCFA. UKCFA represents a number of crowdfunding platform providers that will help you raise the investment or generate the donations or pre-orders you need. The current total numbers 24 full members who have signed up to their Code of Conduct (as at May 2020).
This does not include all the UK crowdfunding platforms. There are scores more, often operating in a niche sector to achieve a unique market position. Such platforms include raising money to publish books, conduct archaeological excavations, or finance film making. Unfortunately, due to the number of them, I’ve not been able to find a directory more recent than December 2017, which is now so out of date I have not provided a link to it.
There is also a European Crowdfunding Network with around 40 full members, which includes some of the UKCFA members. Again, the members of this organisation are not a comprehensive list of the crowdfunding platforms available in European countries.
A scientific review of 29 papers on equity crowdfunding found – among many other conclusions – that going through the process gives startup entrepreneurs a set of skills and knowledge that allow them to make better decisions, a benefit that in the future can be more significant than the money they raise. See Page 7.
Making a video is virtually compulsory to be taken seriously. The Seedrs platform published a useful article with input from four crowdfunding agencies.
Real Estate Crowdfunding
Here is a 21-page report published in March 2019 by EY.
Many articles about rewards crowdfuding explain that fundraisers asking for donations can often improve their success rate by offering a range of rewards, or incentives for people to donate. Like this article from P2PMarketData.
Rewards crowdfunding platforms can also be used as a sales channel. Everyone from market stall holders to major corporates use rewards crowdfunding to test market new products. Anyone can offer new products or ranges, safe in the knowledge that if not enough people place an order to make it worthwhile then they don’t have to go ahead and produce any. Here’s an example from a company making handmade shoes.
Here is an academic paper on crowdfunding published in 2017 and co-authored by an MSc student and a professor at the University of Bath. It particularly looks at the use of rewards, setting a funding target and how the virtually obligatory video should be constructed.
General ‘How to’ Ideas
A number of the platforms plus other non-UKCFA advisory organisations have put together some guidelines, usually available on a self-service basis. You can use these links to access some of them. This is not a full list of what is available.
In November 2018, the innovation foundation Nesta published a report covering a wide fundraising landscape including matched crowdfunding. Matched crowdfunding (on page 27 of the report) is the process by which public, institutional or corporate funding is combined with smaller donations raised from the public on online platforms.
Such schemes are used to not only make public money go further, but also use the crowd to test demand and help direct funds to causes which they know receive considerable public support. A good example is the Mayor of London’s annual support for crowdfunding projects on the Spacehub platform that aim to create new local community services or facilities.
The European Crowdfunding Network provides free online video tutorials for project developers on how to run a successful crowdfunding campaign.
Think about how you appear to backers
Always remember to look at your crowdfunding project through the eyes of the types of people you want to back you. In November 2017, Innovate UK published an illuminating 28-page report based on interviews with investors about what they look for when deciding whether to invest in a small or medium size enterprise. Sustainable growth and a strong management team with ambition and drive were top of the list.
Unleashing female potential!
In July 2017 a report by PwC and Crowdfunding Centre based on analysis of over 450,000 seed crowdfunding campaigns showed that although by far the majority are headed by men, ones headed by women are consistently more successful.
In 2019, the rewards crowdfunding platform Crowdfunder joined with three UK banks to launch Back Her Business. It’s an accelerator platform exclusively for women business founders, providing mentoring, coaching, networking and specific support to raise finance through crowdfunding.
Do you operate in this sector? Here is a 41-page best practice guide published January 2018 for project owners, platforms, advisers, investors and policy makers.
Marketplace facts and figures
The most recent and also most authoritative report available on global crowdfunding is The Global Alternative Finance Market Benchmarking Report published by the University of Cambridge Judge Business School. Here is a link to a summary of the main fifndings in 25 charts. Here is a link to the 176-page full report:
On the other hand, you may have a job to do or a business to run and you might be pushed for time. I’ve already looked at it all so I hope you will get in touch to arrange an introductory discussion about how Comanche Communications & Marketing could help you use crowdfunding to secure the investment or pre-orders you require to achieve your business objectives, or to reach your donations target for a worthy cause.