The buzz around crowdfunding shows little sign of abating as proved by Zack Brown, the man who raised $55,000 on Kickstarter to make a potato salad...
What started as a joke that poked fun at crowdfunding clichés has now morphed into something else entirely. Zack has announced he will use the money he has raised to put on a fundraising concert for the homeless called PotatoStock. And yes, there will be potato salad involved.
Zack’s philanthropy is admirable and the story of the $55,000 potato salad has captured the public’s imagination. However, the episode runs the risk of spreading the fallacy that you can raise massive sums for almost any idea on crowdfunding sites. The reality is very different. Very few projects go viral and the majority of successful projects are achieved through old-fashioned blood, sweat and tears.
I have just finished a fundraising project myself for an independent journalism website I run in my spare time called Newspryng. I received over £2,000 in pledges for the website but fell short of the target. Failing to reach the target has not left me disheartened though and the experience itself has opened up a world of possibilities.
For anyone considering running a crowdfunding project I would advise go ahead and do it. You have literally nothing to lose. I was running the crowdfunding drive in my free time outside of a full-time journalism job and it was hard going, but ultimately a very rewarding experience.
Crowdfunding is like any other form of fundraising, you can’t expect to sit back and watch the money come rolling in.
I learned some important lessons that I hope will inform anyone else considering a crowdfunding project. First off, make sure you lay the groundwork. I would recommend getting people you are confident will contribute lined up to donate as soon as the project starts to create some immediate momentum. We started ours from a standing start, which made the going all the tougher.
Also, don’t let yourself be fooled by the hype surrounding crowdfunding. A friend who works in fundraising for a national opera company gave me some invaluable advice. She told me that crowdfunding is like any other form of fundraising. You can’t expect to sit back and watch the money come rolling in. You need to ask people directly for money and not be embarrassed when doing so.
This was true to my own experiences. Contacting people who showed an interest in the idea and asking them for money helped convert that interest into donations.
Finally, like any business pitch you need to have a simple proposition. As the potato salad guy points out, you need to tell your story as simply and succinctly as possible to create a compelling proposition that immediately grabs people.
The idea behind my website is to create a new funding model for journalism based on donations from the audience. While the concept has received media coverage in the UK, Russia, France, Germany and the US, the idea was very much pitched to people working in the journalism profession.
If I were to go back in time and start the crowdfunding project again I would ensure the pitch was aimed more towards the benefits Newspryng would bring to the audience. There’s a project called Let’s Own the News in the UK that has gathered a lot of momentum by attacking Rupert Murdoch’s influence on the media landscape. This is a compelling idea that cuts to the quick and immediately grabs the attention of the public, which is vital to crowdfunding.
So my conclusions are that even if you are onto a winning idea you need to think long and hard about how it is best to communicate it on a crowdfunding platform before you set it live.
The crowdfunding project has helped me create solid foundations in which to take the idea further. The project created international news coverage that can be built on and used in pitches for more traditional forms of funding.
There are plenty of charitable foundations out there who can be approached for funding. Although many do not accept unsolicited funding applications I have found they are happy to advise if your business fits within their guidelines.
Many foundations do not publish contact information on their websites, but you can get round this by finding a name and contact details of the relevant foundation on the Charity Commission’s website. Even if your business does not fit within their guidelines a quick bit of research will tell you who the individual trustees are and provide another potential avenue for funding.
In addition to charities and crowdfunding, there is also the tried and tested venture capital option. If you research similar start-ups to your own, I’ve found it is easy to find what investment firms have backed them and identify who would be interested in your business.
Throughout the course of my Indiegogo crowdfunding campaign I noticed a few angel investors began following my website’s Twitter account. This never would have happened without the crowdfunding campaign. So for those of you undecided on whether to turn to crowdfunding, I would say take the plunge.
It will take over your life while it lasts, but it is a thrilling ride and will open your mind and fine tune your business plan whatever the outcome.