Great! Now, how do you go about setting your crowdfunding goal?
Thinking of crowdfunding? When it comes to finding the initial funding needed to get your project up and running, there are few alternative methods that are as novel, positive or repeatedly proven as crowdfunding.
While there are many factors that will make or break your crowdfunding campaign, there are none so important as choosing the right funding goal for your cause. Where you set your final goal will determine if you will receive funding for your project, and how much time and effort it will take to reach your target.
Make it Proportionate and Possible
Whether or not your campaign will succeed – in other words, whether it will reach or even exceed its funding target – is based entirely on where you place that target. Although it may be tempting to set a large figure with dreams of cash to spare beyond the project, this plan may well backfire. Your funding goal must be proportionate to the idea you’re selling, or few will invest in your cause.
Your potential backers want to be part of a successful campaign with a reachable target, and so will not support you if your small project claims to need a huge sum, or your grand idea needs only a tiny amount. Make sure you allow a decent timeline to reflect your goal as well: reaching a goal of thousands in a few days is the stuff of movie storylines, and rarely reality.
Do The Maths
Before launching your campaign on a crowdfunding platform, it is essential you have calculated what you’ll need to get your project off the ground. Platforms will have different fees and payment gateway charges, so it’s important to verify them when establishing your funding goal.
Also, don’t forget any costs relating to fulfilling your rewards scheme, if you are including one in your campaign. Not budgeting for these outgoings in your funding target may set you back to ‘financial square one’, despite your campaign’s seeming success.
Your Crowdfunding Goal is not Your Real Goal
The funding goal set on your crowdfunding campaign is not to be confused with your overall funding target. Crowdfunding is a means to reach your internal financial goal, to achieve the funds you need to keep your project going and growing. It is not the be all and end all: just the beginning.
Choose Your Model
You can choose from two crowdfunding models when setting your goal. The ‘All or Nothing’ or ‘Fixed Funding’ model requires the goal to be reached to get funded, so requires more planning and budgeting, but minimises risk for all involved.
The ‘Keep it All’ or ‘Flexible Funding’ approach alternatively allows you to receive whatever funds are raised, which eases the planning pressure but adds it in terms of promotion, as you must persuade your audience to fund a project that may not reach its target.
Put Your Pre-Launch Funding Where Your Campaign Is
If you must choose a higher funding goal, showing that you have done some groundwork before your campaign launches can pay dividends. Line up some backers and, if possible, gather at least 25% of your funds beforehand, so that when you do go live your backers can see you already mean business.
Stretch it Out
Once you have defined your campaign goal, you can opt to create ‘stretch goals’, which inform backers of the extra features you’ll be able to offer should you exceed your initial funding target.
Advising backers of these stretch goals can often have the effect of helping you reach your initial goal. And, since they only unlock when you have hit that target, they are a sign that your campaign is already a success.