Common misconceptions and mistakes that people when organising crowdfunding campaigns

10 widespread misconceptions about crowdfunding

1 – All it takes to launch a successful crowdfunding campaign is to have a good idea, set up a page and click publish.

To ensure the success of your crowdfunding campaign you need a plan that accounts for preparation, launch and management of your campaign. An important part of your plan should be your communication strategy. Filling out the project info and pressing publish is only a tiny fraction the work required to create a successful crowdfunding campaign.

2 – Organizing a crowdfunding campaign is not much work.

Seen as preparing for a crowdfunding campaign involves creating a solid internet presence for your project, creating and communicating with your community on a regular basis, organizing a campaign can be a huge amount of work – especially if you are starting a new project from scratch.

3 – Using a crowdfunding website means I can target people I don’t know personally and I don’t have to ask my close friends and family to contribute.

Even if using a web platform will ultimately help you reach a larger audience, crowdfunding always starts with the people you know who already trust and believe in you. Without calling on these people first you will have a hard time convincing strangers that your project is worth backing.

4 – Asking your friends and acquaintances to support you will be perceived as annoying or disturbing.

If your project is well thought out and designed to solve a real problem in an innovative way, people will be delighted to discover what you are working on. This holds true both for clients you may already have and for your close friends and family. Providing you have good relationships with them already, inviting them to take a look at what you are doing will be received as a pleasure not a nuisance.

5 – Posting my campaign on social networks and sending it via private messages to strangers is a good communication strategy.

A good communication strategy starts with thinking your project through from the ground up, finding what problem it’s solving, who it’s solving it for (your target audience) and so forth. We recommend raising awareness about your project long before launching a crowdfunding campaign for it. Plan your communication strategy for preparing, managing your campaign, and following up after it’s finished. Deploy all the tools, write all your content in advance, and focus on keeping things on track from there on.

6 – Rewards are not important.

The rewards you offer your backers will play an important role in convincing people to take action and back your campaign. The closer the perks are linked to the solution your project is creating the better: people are usually happy to purchase a solution to one of their problems.

7 – People will only contribute to get the rewards on offer.

Although designing good rewards (perks) is important, it is not the only thing that comes into play in converting visitors into backers. People will also, and in some cases exclusively, support you because of the philosophy and ideas behind your project. Also, for some projects, which have a strong social or humanitarian cause, offering anything other than symbolic rewards does not make sense overall, and for a number of reasons.

8 – Crowdfunding always implies donations and therefore the funds raised will not be taxed.

This depends on the specifics of your country’s legislation but it’s safe to say that in most cases law will consider crowdfunding campaigns to be sales rather than donations. Exceptions to this include backers who do not ask for any reward or perk in exchange for their contributions, and also campaigns that offer symbolic rewards the value of which can be considered “close to nothing”.

9 – Crowdfunding can be used to raised money for absolutely anything.

This statement is almost true. You will very likely be able to find a platform to host your project, but whether or not it will succeed is a different question. To us, for crowdfunding to be a good fit, the project should follow a number of guidelines, such as offering some kind of collective impact, having a well defined target audience and being of interest to enough people you know personally or are close to in one way or another.

10 – The communication and community building work is over once your campaign succeeds.

In reality the most important part of the communication and community building work starts when the campaign ends. It is of primary importance that you take time to thank your backers, keep them updated on your projects progress, and let them know the estimated delivery times for the perks they ordered. If you do a good job of this you will have clients and a community that loves you and trusts you, which ultimately might be a greater asset than the actual money you raised during your crowdfunding campaign.

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