There have been many highly touted, successful crowdfunding campaigns in the last several years, but most will fall short of their goal. At times failure is simply due to the fact the project does not have merit, but remember when addressing the crowd passion and the ability to connect with your virtual investor is very important.
Below are some of the biggest reasons a campaign fails:
- Your product or project is already being pursued by someone else. Maybe the field is already crowded with many participants. Competition without a compelling justification with a competitive advantage is a tough sell. More than a few investors will compare your campaign to others if they exist. A highly differentiated product that provides high value to your target market will generate much greater interest from funders.
- Delivering an inconclusive message. Everyone wants to save the world, but having a clear, concise message will take you much further than . Unclear goals and a lack of concrete objectives are a death knell. What can funders expect from your project? Are those expectations realistic?
- A lack of emotion associated with your project. People want to be sold! It is true. Lack of emotional connection or a passionate drive is not very compelling. Share your excitement. Don’t just assume it.
- A poor operating structure will be reflected in poor execution. You need to have your core team in place and ready to go. Most projects succeed based on a group of dedicated individuals who are on the same page. Solid skill sets and committed horsepower have got to be there. Build a plan and use it to guide your path. Agility and the ability to adapt is important too, but investors want to know you are already looking further down the road.
- Be realistic about your funding needs. One of the biggest reason any business fails is due to under-capitalization. Achieving your requested funding goal and then discovering you underestimated the funding amount required will create a set back which may be insurmountable.
- Engage everyone. This is not the field of dreams. If you build it they won’t necessarily come. Posting your project on whatever Crowdfunding platform is just one step of many. You have to push your project aggressively. Leverage friends, family and affiliations. Offerings can and have gone viral, but your offering needs to be seen by the eyes of influencers. Find them. Engage them. It is best to have the foundation built prior to launching your Crowdfunding project. Keep lines of communication to your supporters open. Listen to feedback. We all know the saying about opinions, but when the message starts to resonate you may need to step back and adjust.