Bloom crowdfunding ebook

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  • 1. The Bloom Guide to Real Crowdfunding The definitive guide to planning, launching and running a successful crowdfunding campaign. If you have an idea for a start up, growth business, social enterprise, charity or community group and need funds to get the ball rolling, then this is the must-have step-by-step guide.
  • 2. www.bloomvc.com bloom vc © Contents Title We love crowdfunding What is crowdfunding? How does crowdfunding work? Who can benefit from crowdfunding? What makes a successful crowdfunding campaign? Pre launch planning Step by step guide Final checks Campaign communications Social media for crowdfunding Step by Step – communications guide Page 3 4 5 6-7 8-9 10 11-12 13 14 15 16
  • 3. We love crowdfunding Crowdfunding is opening up a unique source of finance to all, without the need for business plans or bank loans, consultants or committees. You, yes you, can bring your idea to life and embrace the support of the crowd. We’ve all said at some point in our lives: “I’ve got this crazy idea to build a ...” or “I could do better than that” or “This community needs a ...”. Usually followed by “But I’ve got no money to do it.” Well now you have no excuse. The Bloom team has created this guide to take you through the entire crowdfunding process, from helping you to craft the perfect pitch, to creating must-have rewards and building a supportive community. Your project can be small, a few hundred pounds, or it can be large, thousands of pounds. It can be run over 30, 45 or 60 days. It can be for anything (legal, obviously) that you want. And it’s simple. Simple, but truly exciting. The crowdfunding rollercoaster will take you places you never thought of, it will inspire and humble you, show you the generosity of strangers and demonstrate just how much you can achieve with a good idea and some hard work. We’d love to help you, all you need to do is Start a Project and we’ll be right beside you on that rollercoaster all the way, throwing our arms up in the air and screaming just as loudly as you. www.bloomvc.com Top Tip RTs and shares are great, but they won’t put cash into your campaign. Don’t be afraid to ask for the money, it shows determination and ambition. bloom vc ©
  • 4. What is crowdfunding? Crowdfunding is a revolutionary form of funding and is really very simple – tell people about your great idea and ask them to back you in return for a reward. So all you need to do is sell yourself and your idea, and offer cool, unique rewards. There’s no criteria to meet, it’s open to anyone and gives everyone the same chance to shine. Your idea could be for a business, a social cause or a community project and the crowd will decide if they like it enough to give you the cash to do it! Still unsure? There’re loads of reasons why crowdfunding could be perfect for you but we’ve listed our 10 top reasons. 10 Reasons to Crowdfund 1. You’re enthusiastic and passionate – this might not work for banks, but it’s brilliant for crowdfunding 2. You want to raise awareness of your idea/cause – crowdfunding is a fantastic platform for building an engaged community who will spread the word 3. You want to test your idea – you can talk to potential customers and see if they like your concept 4. You need cash quickly – you can run your project on Bloom for 30, 45 or 60 days so if you’re successful, you’ll get the money at the end of your campaign 5. You aren’t eligible for other types of funding – we don’t apply selection criteria, so anyone can do it 6. You like to experiment – crowdfunding is a cool new form of funding, why not give it a go just for the experience? 7. You need a few rounds – you can break your target down, and come back as many times as you like 8. You’re worried about failure – at Bloom we offer one-to-one support and, if your project fails, we can work out why and you can try again 9. You’re not ready for investment – there are no barriers or criteria, so it doesn’t matter if you’re just starting out 10. You have a bad financial/credit history – no need for business plans or financial statements! www.bloomvc.com Top Tip Create an e-newsletter to update your backers during the campaign. Encourage them to share your project with their friends – after all, if you don’t reach target they won’t receive their rewards. bloom vc ©
  • 5. How does Crowdfunding work? There are three distinct types of crowdfunding; crowdlending, crowdinvesting and real crowdfunding. Crowdlending - peer to peer, or debt-based - a simple loan that must be paid back. Loans are straightforward, it’s a simple transaction, you just have to make sure you can repay it. Crowdinvesting - equity-based - you sell shares or, more often, parts of shares in return for investment. Individuals who give money to your project are investors and they own equity in your company. The perceived wisdom is, with an early stage business, the less equity you give away the better. Real crowdfunding - reward-based - in this case, the backer makes a promise to pay you money (if you reach your target) and receives a reward in return. Often but not always, the reward is the product or service the money is being used to develop and deliver, so in effect, pre-selling. Bloom is a reward model. If you put your project on our site, you don’t have to give up any equity or ownership of your business, nor do you have to pay any of the money back. Bloom is all about encouraging and motivating project owners to successfully reach their targets, it’s about encouraging and motivating backers to make promises that contribute to a greater goal. With Bloom, you don’t give up equity or repay the money, just deliver the reward and you retain complete ownership of your business. Promises and rewards, what could be simpler? www.bloomvc.com Top Tip Identify influencers and potential backers before you launch your campaign. Talk to them, share with them, ask them questions, build a relationship – before you ask them to back you. Top Tip Do your research! Find out if there are similar projects on other crowdfunding platforms, learn from what they do well and from what doesn’t work. bloom vc ©
  • 6. Everyone can benefit - there’s no need for a business plan or a good financial history. Not only that, but here at Bloom we don’t apply selection criteria as we want to give all ideas the same chance of success. All you need is a great idea and the willingness to work hard at it. However, we’ve identified a few key groups that could really benefit from crowdfunding. New businesses Trying to set up a business can be difficult without funds and awareness. Running a crowdfunding campaign can fix both problems, and also establish credibility, showing determination and proving that there is demand for your idea. Not only that but you can even pre-sell your product or service and fill your order book before you start trading! Start up Forward Fitness crowdfunded the money need to secure studios to launch their business – 2Girls1Plan. Who can benefit from crowdfunding? Growing businesses As expansion becomes a priority businesses often look to investors, but in the current climate it’s extremely difficult to secure funding. Successful crowdfunding can involve pre-selling products, proving customer demand and increasing publicity – all of which strengthens your position for investment. You could trigger matched funding, or even be approached by an interested private investor like Mhairi Mackenzie of Bonnie Bling. www.bloomvc.com Top Tip Create a mini communications plan for your campaign, then ask for help from the experts amongst your friends and colleagues. Top Tip Make sure you have a fulfillment plan for delivering rewards to your backers – keep in touch with them, thank them and let them know when they can expect to receive their rewards. bloom vc ©
  • 7. Students Students are often sources of great ideas that never lead to action due to lack of cash, or fear of failure. With most students already deep in debt, crowdfunding is a simple method of raising finance while allowing students to develop skills and experience in communication, social media, project management and much more. The benefit is two fold; students can fund their ideas and perhaps their own businesses, and also enhance their CV at the same time, increasing the chances of getting a job after graduation. Student Kevin Pickering crowdfunded two movies on Bloom; Wake Up Call and Nature at Work. Social causes Don’t be put off if you don’t have a business idea, crowdfunding can work just as well for social ventures, community projects and even charities. Giving to a social cause through crowdfunding allows backers to be publicly recognised, and gives you the opportunity to raise awareness of your goals. Projects always perform better when they engage people emotionally, and a social or community project is perfect for attracting backers who want the feel good factor of helping a cause. Check out Elke Barber’s “Missing Daddy” project, a great example. Instead of a few bankers deciding the future of your idea, we hand the power over to the crowd, and you never know what they’ll go for! So if you have a dream you want to make a reality, get in touch and we’ll help! Who can benefit from crowdfunding? www.bloomvc.com bloom vc ©
  • 8. What makes a successful crowdfunding campaign? 1. Community and the “magic 20%” Bringing an existing community to your project is essential. Crowdfunding success depends on the community you bring with your project and how much you engage with them. That’s why the use of social media, and building a following on Facebook and Twitter before you launch, is incredibly important for your project. In fact, effective use of social media is crucial for your business/ community beyond your crowdfunding campaign. So work hard to build interest in advance of your campaign. Do your research, find out where your target market is consuming their data and spending their time, and go there, start to engage before you launch your project. Identify the influencers in your field, talk to them, get to know them, share good content with them and build a relationship first. Find out if there are trade/consumer organisations, support groups, interested businesses and reach out to them. It’s important in the early stages, the first few days, to get friends and family backing you since this gives some comfort to strangers who come to your project. There’s the “magic 20%” to reach in the first few days - statistics show that if you launch your project and reach 20% funded in a day or two then you are 90%+ more likely to reach target. 2. A compelling story You need to write an exciting pitch that engages potential backers and sells both yourself and your idea. You need to explain clearly and effectively what you want to achieve, why it’s so important – why should a stranger back your project? - and how they can be a part of your journey. You need to get to the point quickly and then go on to provide detail, so that if someone only reads the first few lines they understand the aim of your project. You should explain what you need the money for and, if you raise more than you’ve asked for, what you will spend the additional money on. Keep in mind the global audience you are addressing, and write in simple language that anyone could understand. Try to engage on a personal level, as sometimes backers will promise money simply because they are interested in that particular area, or are impressed by the project owner themselves. www.bloomvc.com And use video, where possible, to help illustrate your story. It doesn’t have to be professionally filmed; something done on your smartphone will do just fine as long as your backers get a strong sense of passion, enthusiasm and determination to succeed from you. People love to share video, and if yours is great, then they’ll tell everyone they’re connected with. It’s a fantastic opportunity to engage with people who want to support you - they just don’t know it yet. Top Tip You need to commit time every day to work on your project – whether that’s spending time on social media, asking your contacts to support you, or getting out there and telling everyone about your project in person. We recommend about 30-60 mins a day (minimum) to keep your community engaged. bloom vc ©
  • 9. What makes a successful crowdfunding campaign? 3. Rewards Choosing rewards can often be the most difficult part of creating a project. However, they are an essential part as they will ultimately make or break your campaign. Rewards are what backers receive in exchange for their promise. It is a way to say thank you to the crowd for their kind and generous promises, build support for future projects and can also act as marketing and promotion tool. When thinking about your rewards it is important to ask yourself ‘What would I want in return for my hard earned cash’? You would want something exciting, clever and creative; to feel that by backing a project you will gain something unique, something you would never have received if you hadn’t been part of the crowdfunding campaign. There is a whole host of compelling rewards to offer, for example a simple thank you on Facebook, Twitter or on a personal website, personalised videos, t-shirts, discounts, your name in the credits of a film, pre-sale copies of CDs, unique photos, a special edition of the product or tickets to the event, advance access to new technology, pre-launch downloads of apps, access to products pre-launch, VIP experiences ... the list is endless. Projects can struggle to find support if the rewards aren’t considered carefully, so here are our top tips: 1. Having a variety of rewards is key, ranging from £1, £5, £10 upwards. Remember every little helps! 2. Make sure the rewards link to the project, backers are interested in your project not in random products. 3. But make sure the rewards appeal to the widest possible audience. 4. Make sure the reward fits the value; this should consider more than just the price. Backers want to feel special, that they are getting a limited edition, priority or discounted product. 5. Adding a humorous or personal touch to a reward can go a long way; it will help you connect with backers. 6. Tap into famous connections, if you know a celebrity /expert ask for endorsement and ask them to contribute to a reward. 7. And please consider the costs of making/delivering rewards (you can build this into your target), and how many of each you can realistically offer. www.bloomvc.com The opportunities are only limited by your imagination, so put on your creative cap and capture the crowd’s imagination! Top Tip The average promise on Bloom is around £40 so make sure you take this into account when you’re creating your rewards. bloom vc ©
  • 10. Pre launch planning All you need to get started is your great idea for a business, social, or community project, and a computer or smartphone. You can then register your project on our site using this link: Start a Project You will need to register an account and fill in basic profile details, including your PayPal email. It’s crucial that you have a PayPal account as we use it to process payments, so make sure you register with PayPal if you haven’t done so already. It’s free, and is quick and simple to setup, just follow this link and click sign up: PayPal signup Before you start working on your project, please think about possible factors which could delay launch and remedy them if possible e.g. do you need to buy premises first, or acquire planning permission? We’re more than happy to delay launch until you’re ready, but it’s useful to know the timeline before getting started. Next, you will be introduced to your project dashboard, which allows you to add information, edit your project, and add videos and images. The key areas of your project you need to start filling in are; Target How much money do you need to raise? Remember to think about the 5% Bloom commission, PayPal charges and costs associated with rewards Short description This should be around 100 characters, and summarise your dream/ goal Long description This is where you pitch yourself and your idea and explain why you need funding Rewards You need to decide what you can offer as rewards, in return for promises made. Ideally there should be 5-7 levels ranging from very low (£5-10) to high (which could be £100 to £1000 depending on your target) Media You should add pictures and video to illustrate your story and enrich your pitch We recommend you include as much information as possible, then when you’re ready to receive feedback from a Bloom team member, simply click ‘Submit’ at the bottom of your project dashboard. You will be partnered with a team member who will work closely with you to refine your project and guide you through project launch right up to your project closing. Of course, if you have questions or problems at any stage, get in touch! Use this contact link: or if you have already been allocated a Bloom team member, get in touch directly via email, phone or Skype. www.bloomvc.com bloom vc ©
  • 11. Step by step guide We’ve launched a wide range of projects, from hundreds to thousands of pounds, from films to animal rescue to football teams, cosmetic products to games and books. What we’ve learned is that a successful crowdfunding campaign is built on several key areas, and we’ve got a step-by-step guide to planning, building and launching your crowdfunding campaign. Stage 1: Before the project can be built you need to: - 1.Decide exactly how much you are looking to raise and what this money will be used for. This figure should reflect the cost of your project as well as any costs involved with creating/delivering rewards. Remember that if successful, 5% will automatically be deducted for Bloom and 3% (approx.) deducted for PayPal charges. Also consider whether it is feasible to raise the amount you want in the specified number of days – this will depend on the size and strength of your community. 2. Decide when you want the project launched. This can be set for whenever you want, once you’re ready or in time to coincide with a relevant event. Think about anything that needs to be completed before your crowdfunding campaign can begin, and work this into the expected timescale. Stage 2: Prior to the project launch/ during building the project, you need to: - 1. Inform staff/your community/group or charity members that the project would benefit. Once these people are aware of the project, they can start getting involved and spreading the word. 2. Speak to key influential contacts and ask if they will support and share the project. This is key to driving traffic to the project early, and ensuring support prior to the project. Remember to also ask for funds, and if these funds can be promised in the first week. If you can guarantee backers before the project starts, it will generate more interest and reassure strangers. 3. Ask sponsors to embed project link on their website. This will also drive traffic directly to your project and reach a larger audience. This is simple; we can provide the link that embeds the project. Make sure you embed the project on your own website too. 4. Develop social media following especially twitter, and set up a blog if possible This stage is very important, social media is one of the main factors that will influence potential backers. Social media sites that could be used are networking and sharing sites such as Facebook, Twitter, Pinterest, Quora and professional sites such as LinkedIn and Kiltr. Facebook and Twitter are the main ones to target, however depending on the type of project a site such as Pinterest could be very effective. www.bloomvc.com bloom vc ©
  • 12. Step by step guide Stage 3: To build the project, you need to: - 1. Develop a short description that hooks people and makes them click on your project to read more, ideally no more than 100 characters. 2. Develop a long description that tells a clear compelling story, including why the project is vital and why people should back it. It’s also important to tell people how you will use their money, and what you will use any extra funds for if you exceed your target. 3. Add links to your website and social media sites. (Facebook/ Twitter/Pinterest/Kiltr/LinkedIn/Quora/Blog). 4. Add pictures and video, which will make your project more exciting and interesting and help illustrate what you want to do. Videos are particularly useful and draw people in, even a short video shot using a smart phone can work really well. 5. Create exciting rewards with at least one being unique, something no one can get unless they are a backer. Don’t be put off if you are service based, be creative about the rewards – you could offer experiences rather than products for example. We can work with you to create the rewards for each level, ideally we should start low, £5 - £10, which could be for a personal thank you on Twitter/Facebook and build up to £1000 which could be sponsorship options. 6. Create a mini communications strategy, which includes all the actions that need done along with the deadlines and responsibilities to manage your project effectively. For a rough guideline, plan to spend at least an hour a day on your crowdfunding campaign. 7. Create a launch announcement for social media, and also a press release announcing the project going live, perhaps even a launch event to jumpstart the project. www.bloomvc.com Top Tip Keep your project fresh – can you add new images or a new video to keep attracting new eyes on your campaign? Top Tip Make sure you embed your project onto your web site – and that of any friends/family/ colleagues willing to support you – to drive existing traffic to your new project. bloom vc ©
  • 13. Final checks Here’s a checklist against which to benchmark your project: Your goal Is it clear and obtainable within a proper timeframe? Your project tagline Is your tagline 120 characters or fewer and URL/SEO friendly? Your description Does the short description grab attention and compel viewers to click through to your project? Does the long description tell a fascinating story and keep interest right to the end? Your rewards Are they desirable? Are they varied enough, both in value and content? And is there a unique aspect, something only backers of your project can have? Your target How much do you need? Have you explained what you will spend it on and how you will spend any money over and above your target? Your team Can you deliver? Are you happy that you/your team (obviously featured in your long description) can meet your goals, deliver the rewards you have promised, and go on to deliver on your business objectives? Your call to action Do you have one? Have you made sure it’s clear, simple and provided all the necessary links to make it easy for backers? And finally, an incredibly important question … Does it make you proud? Is it compelling, will it make a difference, will your backers want to join you on your journey? If your answer is a resounding YES to ALL of these criteria, then we think you’re good to go. Otherwise, give us a shout – we’re here to help. www.bloomvc.com Top Tip Use the Comments section on your project to keep backers – existing and potential – up to date with progress. Top Tip The magic 20% - make sure your friends, family and colleagues support you in the first few days. It builds momentum and gives comfort to strangers to your project. bloom vc ©
  • 14. Campaign communications So you’ve worked hard with the Bloom team to create a great pitch and your project is live on the site. Now you can just relax, right? Afraid not, your project launch marks the beginning of the real hard work – you have to promote your project, engage with your community, get people to promise money and keep interest up over your project lifetime. Don’t panic – we’ve outlined the key things you need to do to make your project a success and created a week-by-week guide. 1. Commit enough time to your project This is absolutely crucial to the success of your project and you need to commit time every day to work on your project – whether that’s spending time on social media, asking your contacts to support you, or getting out there and telling everyone about your project in person. We recommend about 30 – 60 minutes a day (more if you can manage it) to keep your community engaged. 2. Tell people what you are doing This is absolutely crucial to the success of your project and you need to commit time every day to work on your project – whether that’s spending time on social media, asking your contacts to support you, or getting out there and telling everyone about your project in person. We recommend about 30 – 60 minutes a day (more if you can manage it) to keep your community engaged. 3. Ask for the money It’s all well and good asking for support but at the end of the day you need promises to reach your target and get the cash you need. Don’t be afraid to ask for the money, it shows determination and ambition, and most people will give it to you! Always keep your end goal in mind. 4. Keep motivated Projects typically have high interest at launch, which can sometimes drop away during the middle of your campaign, don’t worry and don’t give up! Remember this is normal and redouble your efforts to get people interested and excited – if they know how much it means to you, they are more likely to make that promise. 5. Keep your eyes on the prize! All this is hard work, and we’re open about that from the start. You might be surprised by the level of effort and commitment your project will take, which is why you need to focus on what you can achieve by the end of it. Not just the funding you need, but raising awareness, building an engaged community, proving your concept and perhaps even pre-selling your product. www.bloomvc.com Top Tip Create at least one unique reward, something people wouldn’t ever be able to have if they didn’t back your project. And make sure the rewards fit the value, backers need to feel they’re special and worth having. bloom vc ©
  • 15. Social media for crowdfunding Crowdfunding success depends on the community you bring with your project and how much you engage with them. That’s why the use of social media, and building a following on Facebook and Twitter before you launch, is incredibly important for your project. In fact, effective use of social media is crucial for any business/community. The problem is some people don’t know how to use social media, or use it in the wrong way. Don’t panic! The Bloom team is experienced in social media strategy and will help you promote your project. However, this works best if you are also engaging with your community. We’ve set out some useful tips for how to use social media: - 1. Get chatting Building a following always takes time, but you need to start the process by following other people, groups, businesses and talking to them. Show interest in what everyone else is doing, and they’re much more likely to do the same! 2. It’s not all about you It’s easy to fall into the trap of only talking about your business/ project, but it’s pretty boring for everyone else, and you’ll soon run out of things to say. Share relevant content, and engage your community by asking them questions and listening to what they have to say. 3. Keep it up Don’t leave your profiles for long period with no updates, as your followers will disconnect and lose interest. Keep up regular updates, and mix up the content. 4. Go public too often people have conversations privately and no one else can see what’s going on. Thank your backers, answer questions and talk about offline progress publicly so that everyone can see the interaction and interest, which also allows others to jump in. 5. Measure interest keep an eye on the interaction on your posts/tweets e.g. likes/ comments/retweets, and be smart about what and when you update. Is a certain day or time more active? Do pictures or links encourage more interest? There’s loads more we could tell you about social media - and we will - but for starters if you follow these 5 key tips, you’ll engage more with your following and attract more backers to your project! www.bloomvc.com bloom vc ©
  • 16. Acknowledgements www.bloomvc.com Bloom wouldn’t be what it is without the passion, enthusiasm and determination of the Bloom team – and without the passion, enthusiasm and determination of our crowdfunders and backers. We thank you all. Happy crowdfunding! This Guide is brought to you by Michelle Rodger and Cara Pleym. bloom vc © Clyde Offices 48 West George Street Glasgow G2 1BP 0845 2696296 Contact us Somerset House Strand London WC2R 1LA 0203 397 7698 eva@bloomvc.com www.bloomvc.com @bloomvc #makeapromise