Last Updated on Apr 8, 2020 by James W

In the last few years, digital technology has managed to create a wide transfer of power from the hands of businesses to those of consumers.  A perfect example of this trend is the use of crowdfunding platforms, where visibility and reach are allowing companies to raise their startup capital directly from the people who will eventually become their customers.

By definition, crowdfunding is the process of raising small amounts of capital from a large number of people in order to get a new business venture off the ground. It basically makes use of websites and social media platforms in order to connect entrepreneurs and financiers.

This method has been growing significantly as a source of investment for startups. It is expected to outstrip venture capital, with a stable average of $30 billion per year, on the way to becoming a $90 billion industry by 2020. As a disruptive influence, crowdfunding is redefining the way startups are raising capital.

Of course, it isn’t as simple as setting up your campaign and waiting for the money to roll in. Successful campaigns require a great deal of work, and it is crucial to understand the process or your campaign will get lost in the slush pile.

These guidelines will help you to gain your bearings while you prepare your campaign for launch.

Build Your Audience First

A successful crowdfunding campaign doesn’t start the day you launch it.

Before you think about putting it together, you should have an established audience to help you spread the word. The more people you can direct to your campaign from outside the platform, the better chance you will have of getting funded.

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Look for opportunities for press releases and additional chances for exposure. Most platforms will feature different campaigns, and if you can find out how to get yours featured, it will dramatically increase your chances for success.

Social media is an excellent medium for building your audience and raising visibility. It is highly targetable, and allows for easy sharing which increases your reach. A successful social media outreach network will help you find the people who are most likely to be excited by your campaign, and ultimately donate.

Create Your Business Plan

The best way to make sure that you don’t get caught unprepared is to create a detailed business plan.
The plan should cover your company’s strategy and organization, three to five years of financial projections, and a description of your products and how you intend to produce them. It should also include quotes from contractors, estimates for packaging and shipping, and market research.

Having these numbers for a guideline will help you avoid mistakes, like finding out after you begin your campaign that the promised rewards will cost far more to produce than expected, defeating the purpose of the fundraising effort.

Choose Your Targeted Platform

Not all platforms are created equal. Each will have its own rules, a different audience and can even be targeted to specific kinds of ventures.

There are four different kinds of crowdfunding platforms:
Equity-based: Contributors will have a stake in the company.
Donation-based: Contributions are tax deductible, and tied to a specific cause.
Lending-based: Contributions must be paid back over time, sometimes with interest.
Rewards-based: Contributors are rewarded with tangible gifts.

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Knowing the right kind of approach to use for your business will help to narrow your options, and improve your chances for success. Paying attention to the niches that the platform is focused on, and the success rate for similar projects will also help you narrow down your options and pick the right one for your needs.

Momentum Is Crucial

Maintaining a level of enthusiasm and excitement about your campaign is going to be a large part of ensuring success.

Donations in a campaign tend to bunch around the launch and the deadline, with a slump in activity in-between. Breaking up this time with notifications, milestones and new offers will help to pull more people in and generate continued buzz about your campaign.

Choosing a longer deadline only extends this slump, making it more difficult to keep the buzz going. The optimal campaign length is 30-45 days.

Learn from Failure

Unfortunately, the grim reality is that less than 1/3rd of all crowdfunding campaigns reach their goals. The work that you do to raise awareness and maintain momentum will help your campaign to stay on the successful side, but you need to be aware that it is very possible to have your campaign fail. And if it does, you need to be ready to learn everything that you can from the experience!

Crowdfunding has a steep learning curve, and you will find your first campaign to be very instructional. Learning from a failed campaign will help you to identify the efforts that worked and the areas where your campaign could have been improved, and can make your next fundraising efforts more likely to succeed.

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In addition, this is one of the first opportunities that you will have to test the marketing strategy you are using for your company. Whether your campaign is successful or not, you should come out with a great deal of feedback and interaction with your target audience. Whether positive or negative, this feedback is important data to consider.

In a sense, a crowdfunding campaign is almost as valuable as a marketing research tool as it is for a funding venue.

These tips should help you improve your chances of having your crowdfunding efforts succeed, or at least to pull value from a failure. If you have any other ideas on the topic, please share them in the comments below.


Madison Sanders is a visual merchandiser, a start-up consultant, and a co-manager at, an online platform dedicated to bringing relevant corporate details of some of the largest retail stores, restaurants, and internet companies.

Image source: Deposit Photos


Founder and chief editor of Blogger, Affiliate Marketer, Tech and SEO geek. Started this blog in 2011 to help others learn how to work from home, make money online or anything related to business and finances. You can contact me at