Crowdfunding provides startups with an amazing way to raise money for their new business or project idea. It gives Founders a way to set up their businesses independently with no ties to investors or debt from the bank. But, having no advisories can allow for errors that could lead to the campaign not succeeding.
On our Medium channel, we write easy-to-action guides on the steps you can take to achieve a successful crowdfunding campaign. In this blog particularly, we cover common mistakes made and how they can be avoided.
Not researching the platform
A common mistake that people make when launching a crowdfunding campaign is not researching which platform is best for their business. Different crowdfunding platforms have different audiences, features, and fees. Some platforms are better suited for specific types of projects, such as art or technology, while others are more general.
Take the time to research the crowdfunding platform you’re considering. Look at the types of projects that have been successful on the platform, read reviews from other users, and understand the fees and requirements for launching a campaign.
JumpStart is a Web3 crowdfunding platform, the difference between us and other platforms is that the funds are raised through the purchase of utility NFTs. This kind of platform is great for projects that focus on Web3, tech, gaming, crypto, and AI as it integrates with our model perfectly.
However, the use of NFT smart contracts could benefit all kinds of projects, one example could be real estate. Your company may acquire houses to rent on Air BNB, you can set the NFT tiers to distribute the money raised from rent, fairly to all the funders in a secure and automated manner. The possibilities are endless with the use of NFTs and smart contracts.
Setting an unrealistic funding goal
Setting an unrealistic funding goal is another common mistake people make when launching a crowdfunding campaign. While it may be tempting to set a high goal, it can be a turn-off for potential backers. If the funding goal seems too far out of reach, people may not want to invest in the project.
To avoid this mistake, set a realistic funding goal that is achievable based on the project’s scope and the amount of support you can reasonably expect to receive. Be sure to consider the costs associated with fulfilling your rewards, as well as any fees charged by the crowdfunding platform.
On JumpStart all fees are shown before publishing the campaign and will depend on the amount you’re raising and which currency you choose to raise in. We can also discuss with you your goal and recommend any amendments that we think will help your campaign to succeed. Just some of our options include setting a soft cap and hard cap or doing your campaign in stages.
Not promoting the campaign
Promoting your crowdfunding campaign is a key element to having a successful campaign. In previous blogs, we’ve gone into detail about how you can set up a community before launching your campaign and other tips that can help your campaign stand out and raise funds.
One of the biggest mistakes you can make is not promoting your campaign enough. You want to make sure you reach as many people as possible, and not just rely on the crowdfunding platform’s audience.
To avoid this mistake, create a marketing plan that includes social media posts, email newsletters, press releases, and other promotional tactics. Reach out to your personal and professional networks, and ask them to share your campaign with their contacts.
If you decide to use JumpStart, we have additional services that can help you with marketing activities and graphic design.
Offering unrealistic rewards
While rewards can be a great incentive for people to back your project, they should be feasible and cost-effective for you to fulfill. Offering rewards that are too costly or time-consuming to produce can result in unexpected expenses and delays.
Make sure to evaluate all costs associated with each reward level and make sure they are feasible to fulfill. Be sure to communicate any limitations or potential delays with backers in advance.
Failing to deliver on promises
Failing to deliver on promises can harm your reputation and future fundraising efforts. Backers expect you to deliver on your promises, and failing to do so can result in negative reviews, chargebacks, and legal issues.
It’s important to be transparent and communicate any changes or delays with your backers. Keep your backers updated throughout the process, and make sure to distribute your rewards as soon as possible.
By using JumpStart’s smart contract reward distribution you’ll be able to ensure you can deliver to your backers on time. Smart contracts are a great way to build trust with potential backers as they create guarantees between the company and the contributor.
Launching a successful crowdfunding campaign requires careful planning and execution. By avoiding these common mistakes, you can increase your chances of success and build a strong relationship with your backers.
If you need any advice about which platform to use and want to know more about JumpStart, you can book in a 1–1 with our team who can walk you through it!