Crowdfunding is now a popular way for businesses to gain investment. There are an increasing number of platforms (Indiegogo, Seeders, Crowdcube and GoFundMe) but Kickstarter remains the most well-known, but with only a third of its campaigns getting funded it is vital that your pitch is impactful, believable, and professional.
Investors who use Crowdfunding will often look for evidence of a tested idea, which has the potential for growth and development; an idea within a high growth sector; or a niche idea with an established audience in the market.
There are many advantages to using crowdfunding platforms:
- Gain valuable insight into the public reaction to your concept
- Raise awareness of your brand.
- Minimise risks by securing pre-orders before committing to a big manufacturing run.
A successful campaign can garner strong media coverage if the campaign trends, giving a great boost to the business when it’s most needed.
There are, however, some key pitfalls to avoid. Trademarks and patents must be established to avoid the idea being copied; Not all applications to pitch are successful and the platform works on an all or nothing basis – so if the target isn’t reached, all donations must be returned to investors.
We’ve worked with a number of brands who have funded their product via crowdfunding platforms and are happy to share some of our top tips:
Choosing the correct platform
There are a number of platforms available to pitch your product in this way. Some are a niche in the industries and services they target, so choose wisely. The crowdfunding comparison site gives an overview of the key sites.
PR and Marketing
Once you’ve chosen your platform, be sure to promote your product as much as possible before you launch your pitch. You’ll need to have funding to do this effectively, so make sure you build that into the plans Video is a great medium to use here to highlight product benefits, USPs and target audience and it doesn’t need to be professionally produced to be impactful.
Being able to demonstrate consumer demand for your product idea will give you a real edge. Investors need to be able to make measured risks with their money, so knowing consumers like and would potentially buy into, your idea will really help.
A good understanding of the wider market and where your idea sits is also key. Investors will want to be sure you’re not replicating products already on offer or indeed infringing any trademarks and patents, and that the sector you are looking to launch into is performing well.
Bringing a child development expert on board will also really help your investment pitch for children’s products. Being able to clearly and expertly outline the developmental benefits of your product will make a big difference to your pitch.
Set realistic goals
Small targets which are exceeded are far better than large ones that don’t get met. Work out exactly what you need financially to get your launch to happen, build in a contingency fund, and go from there. Also be sure to set realistic timeframes and outline potential risks so that investors know exactly what they are signing up for, but remember that most things take longer and cost more than anticipated so make sure you’re able to deliver on the promises you make.
Engage and reward
Although not absolutely necessary, rewards can help attract potential investors. Tiered rewards can help to incentivise all levels of funding, but be sure to check what you are and are not allowed to offer as incentives. Engaging with your audience beforehand to help them build the brand and give you a steer on the direction it can take will give you a ready-made fan base when you launch
Be sure to communicate with your investors once you have them on board. People who get to know you are much more likely to support you and help you to reach your goals. Also, make sure you are answering any questions from potential investors and opening lines of communication.
Here at Fundamentally Children, we are able to help with all of the above – so do get in touch when you’re planning your next pitch.