Perfecting Your Pitch
Crowdfunding is a way for businesses to get capital from, well, practically anyone. The concept isn’t new (it has been around at least since early churches pushed tithing), although the modern term crowdfunding means fundraising on the Internet. A powerful pitch is the key to a successful crowdfunding campaign. Kickstarter.com, Indiegogo.com and other crowdfunding websites simplify the process of getting a pitch in front of backers willing to plunk down cash on a venture, but what goes into a successful solicitation?
And the answer is: an impactful video. A video, required by virtually all crowdfunding sites, is vital regardless of what your campaign offers supporters in return—a product sample or other thank-you gift or shares of private stock in your startup under the JOBS Act, expected to take effect this year. Further keys to success with that video are knowing your target market and crafting your message in a way that makes folks itch to give.
Shoot a Grabby Video
Videographer Chris Henschel, a seasoned pro at shooting crowdfunding pitches, has these tips for entrepreneurs and small-business owners planning campaigns.
• Create a video no more than four minutes long. Kickstarter campaigns that greatly exceeded their solicitation goals bear this out, with videos typically ending around the 3.5-minute mark.
• Audio quality and creativity matter. Revise your video until it’s polished.
• Showcase a product or service clearly and effectively. To that end, you must know your audience; Formlabs’ Kickstarter campaign for its Form 1 affordable 3-D printer was geared toward designers and engineers who understood the need for the device. Formlabs’ goal was $100,000, but the company’s campaign raised more than $2.9 million. If your product is designed for home chefs, your message might emphasize tasty results and time savings; if you’re hawking an automatic aquarium cleaner, emphasize fish health, time savings and improved viewing through the pristine glass tank. Test your video on folks unfamiliar with your product (ideally they should fit your target market), encourage constructive criticism and take their comments to heart, which might mean shooting more footage and re-editing your video.
Your message and its delivery are crucial, too. As a former radio show host, psychotherapist Richard Rapoport knows something about being on-message. And he says entrepreneurs should attempt to tap into a “universal human need to feel appreciated, acknowledged and cared for—the yearning to be a part of something important.” People delight in the cachet of being among the first (or at least part of the initial groundswell) to support an innovation that can sweep a community, nation or beyond. To sweeten the appeal of your product or service, Rapoport suggests:
• Connecting with potential investors by letting them know you share similar values. They’ll invest, and even better, they’ll help you spread the word. Why would they do that? Because of humans’ narcissistic need to advertise their values (how else would the bumper sticker have survived all these years?). As a result, branded tote bags made of either recycled water bottles or organic cotton might be the perfect reward to someone who invests in a campaign with an environmental angle. The folks providing the first seed money will proudly use that tote, and when others ask about it, those initial investors will become your evangelists.
• Showing emotion and employing an enticing tone of voice in your video. Be genuinely enthusiastic as you drive home the reason your product or service solves a problem or satisfies a need. You (or anyone appearing in the video) should rehearse until you can speak and move in a relaxed manner so the pitch seems natural and sincere.
• Inspiring viewers to want, even feel compelled, to support your effort. Convince them that they and others—because, to woo investors you must convince them a strong market exists—must have this new way to save time or money; improve health, hygiene or comfort; enhance their appearance—whatever your business can do for them. Make them feel they’ll miss out if they take a pass on your pitch.
Spread the Word
But an outstanding video isn’t enough, Henschel warns: “You can make the greatest video ever, but if no one sees it, who cares?” Even the best videos won’t get noticed if they are not widely viewed. To that end, startups should use one or both of the following tactics.
First, Henschel recommends that startups creating Kickstarter campaigns aim for the site’s Curated Pages, which list projects that are supported by major organizations, blogs and other creative communities ranging from the Sundance Film Festival to Vimeo, a video-sharing website used by novices and experienced videographers. Editors wanting to freshen curated pages will look for new startups to endorse (and stellar videos offer the most tempting fruit); those endorsements will blast your message further through the virtual world.
The best way to wind up on Kickstarter’s Curated Pages is to send a query email. Contact information can be found on organization or company websites. If people learn that an organization near and dear to them has endorsed your campaign, they may jump on your bandwagon with a pledge, too. Virtual word-of-mouth can be incredibly persuasive.
And second, getting a celebrity to invest in your company or support your company in other ways is a terrific buzz-builder. So you don’t know any celebrities? Well, it’s not as tough as you might think to get a product in front of one.
Start by narrowing your focus to someone who has an intrinsic interest in what you sell, advises Steven Barlevi, celebrity business manager and former chief financial officer of Epitaph Records. In other words, know who loves your niche, whether it’s gadgets, high-fashion clothing or bling, or a social cause such as the environment, literacy or animal rights.
Actor and travel buff Ashton Kutcher has invested in a variety of startups, including Airbnb.com, which connects people with places to stay in 190-plus countries. Actors Blair Underwood and Laurence Fishburne have worn jewelry by designer Aklia Chinn on- and off-screen, boosting her career. If you have a new solar-powered something-or-other, you might reach out to Kevin Bacon, who supports environmental causes. You’re essentially following Formlabs’ example: ensuring your pitch appeals to the right audience.
Once you’ve settled on whom to approach, Barlevi suggests reaching out through a publicist, personal manager or agent. Contact information for a celebrity’s entourage can be found through IMDb.com or through organizations such as the Screen Actors Guild. Be prepared to sign some kind of a licensing or endorsement agreement, and then hitch your wagon to a celebrity’s star power. Publicize the endorsement on your website and through social media (YouTube, Facebook, Twitter, etc.) to help your pitch go viral.
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To score big bucks with a crowdfunding solicitation, create a creative video that appeals to investors' emotions and needs.