Jean publishes a blog called the Enterprise Corner. It features articles on entrepreneurship, local industry trends, manufacturing news and periodic ‘toolbox’ articles showcasing assistance, incentives and other resources for local businesses.
Our crowdfunding workshop at Yakima Maker Space was a big success. About 30 entrepreneurs and nonprofit leaders joined us to learn more about crowdfunding, the popular online funding portals that offer significant new ways to fund start-up businesses, social causes, and non-profits. We teamed up with Yakima Maker Space and I Heart Yakima to offer the class, and brought in Greg Paley, a leading business consultant and attorney to highlight how crowdfunding works.
Paley started the class by outlining the tremendous growth of crowdfunding. It is a multimillion dollar industry and crowdfunding sites are proliferating. Greg suggested that people interested in crowdfunding campaigns need to do research to determine which site is best for their prospective campaign. Paley suggested that people should shop around, look for successful campaigns similar to theirs, and pay close attention to the fine print and fees. He says you should plan to pay about 10% on website fee’s and bank transaction charges. Another 10-20% could go to providing donors with gifts if that’s in your plan. Also remember that penalty fee can run 9%+ if you want the money raised but didn’t reach your goal.
Once you hone in on a particular crowdfunding site, staging a successful online campaign is based on solid business planning. Greg noted that having a handle on your business model and financial situation is key since most investors want to know more about the venture and how their money will be used. Being prepared and developing a business plan underpin success on crowdfunding sites.
The average crowdfunding campaign runs for about nine weeks and raises an average of $7000. Crowdfunders typically set a funding goal and create a compelling message that will win the hearts and dollars of many donors. Setting the right goal is fundamentally important - if you do not meet your goal you typically do not get your money. Eighty percent of all crowdfunding campaigns fail and a vast majority do not even reach 25 percent of their goal.
Crowdfunding is obviously not a slam dunk – Paley emphasized successful campaign take time and effort. A strong marketing plan is essential. People need to understand your product or service and see its potential in the marketplace. Paley suggested folks consider making short two to three minute videos to pitch themselves and their campaign and added that these clips should hook viewers within 10-15 seconds. Being clear about why your product, cause or project matters is essential – also be clear about the reward or investment you want from prospective donors.
Greg final points honed in on his keys to success;
Paley said it typically takes at least a few weeks to jumpstart a good crowdfunding campaign. Plan accordingly - it can often take several months to realize funds. Good goals are the function of good business plans – spend time putting your specifics to paper. Greg also emphasized the importance of social networks and finding early champions for your campaign. Paley concluded the workshop by highlighting how important it is to know your numbers. People will not easily invest in your campaigns if the finances are fuzzy.
It was great to learn more about crowdfunding and online fundraising. Greg Paley did a great job outlining how these new portals work and more importantly orienting our class participants towards the elements that underpin crowdfunding success. Everyone should look at crowdfunding options but also ask themselves why and how it would work in their own situation. Approaching these portals’ potential carefully and planning accordingly if you choose to campaign is vitally important.
Crowdfunding Changes Game for Entrepreneurs and Investors l Greg Paley to Teach Crowdfunding Workshop in Yakima l Crowding and Kicking: Jobs Act Provides New Funding Avenues for Entrepreneurs l What is Crowdfunding and Will it Work for You?