operate

Crowdfunding for a Business Startup



Sharing buttons:

what up craft honors Salvador Brigman

here welcome back to the crowdfunding

demystified youtube channel and on this

channel I put out videos and educate

about crowdfunding raising money getting

funding for a start-up venture for an

entrepreneurial venture and really how

do you actually grow your business how

do you get an injection of cash or an

injection of funding and how do you use

crowdfunding in order to sort of Kindle

that so you can have the lifestyle that

you want and you can also create that

lifestyle for you for your kids for your

family and sort of supercharge that

vision that you have for your career in

the future okay let's talk about

crowdfunding for a business there are

two types of crowdfunding you're going

to want to use if you are interested in

using this for your business and I kinda

want to cover these just to be

comprehensive now the majority of

crowdfunding happens on Kickstarter and

IndieGoGo this is what is called rewards

based crowdfunding this is basically I

would say the majority of

business-related crowdfunding happens

with rewards based crowdfunding and this

happens on Kickstarter and IndieGoGo

these are two major platforms out there

Kickstarter IndieGoGo for rewards based

crowdfunding I'll get into why that is

in just a second but at the same time

there's another type of crowdfunding

that a lot of people are beginning to

use when it comes to business crown

fight this is called equity crowdfunding

now I've actually written a book on both

of these I have a book called equity

crowdfunding explained which you can

search on Amazon you'll often get an

audible version I also have a book on

rewards based crowdfunding called the

Kickstarter launch formula which goes

into how to launch a Kickstarter

campaign so I'm pretty familiar at both

of these forms of crowdfunding and the

basic difference here is that with

equity crowdfunding when you do a

crowdfunding campaign you have this goal

maybe you're trying to raise $100,000 or

$500,000 and in exchange for getting

this money from people you're basically

allowing them to in

best in your company so they're not

actual backers of your project they're

actually investors in your company so an

equity crowdfunding campaign is

literally exactly as it sounds you're

giving away equity and people are

becoming evangelists of your company but

they're also getting a share of

ownership of your company there are

different regulations that go into

equity crowdfunding like regulation

crowdfunding regulation A+ I have a very

comprehensive video out there on equity

crowdfunding which I put out on YouTube

and also like I said I wrote a book

about this entire subject with

rewards-based crafting this is a little

different because there are always

obligations that come when you actually

raise money so with rewards-based

crafting let's just say you launch a

campaign on Kickstarter you have a

40,000 or 50,000 dollar goal you end up

actually exceeding the amount that

you've raising up raising a million

dollars or two million dollars on

Kickstarter what happens after that well

do you don't just get to keep the money

and like fly the cash to the Bahamas and

chill on the beach and stuff like that

you have to deliver on the rewards that

you've promised your backers so

basically people come to this campaign

they see that if they pledged $50 or

$100 or $200 to your campaign they gain

access to the initial prototype of the

products or they gain access to the

ability to maybe sit in on a Skype call

and to meet you in person or to do other

stuff you're really varies from campaign

a campaign but basically they're

claiming a reward for that amount of

money this is why we call it rewards

based crowdfunding in exchange for

raising all this cash and you're getting

let's just say a thousand backers or

hundreds of backers they then get to

claim these different rewards and

usually you then have to ship out the

product or the initial prototype or

whatever it is you're creating you have

to ship out all of these to your backers

and that's really when the magic happens

because they can they can play around

with this product it can give you

feedback they can share with their

friends you have basically have a tribe

of people that are bought into you your

vision they've given you funding they

now actually have one of these products

and sort of the beginning seed stage of

growing a very powerful business are a

few things that I want to cover here

namely

what are the common elements of both a

rewards based and equity campaign but

also who is this for who is this good

for traditionally the types of projects

that are going to be doing crowdfunding

are hardware products

fashion gaming or board games it's also

really great if you have like a design

product of some sort

the ones that have kind of struggled a

little bit more the ones that kind of

also lend themselves more to equity

crowdfunding our apps and software now

apps and software have done pretty well

with epic crafting but they kind of

struggled like I said with the

rewards-based crafting but in terms of

the type of business that you have

basically what you should be thinking is

if you have a business which is offering

a product of some kind if you're looking

to start an online e-commerce store or

if you're looking to do something where

you're basically shipping on a physical

product like a board game crowdfunding

is a perfect match for you if you're

offering more of like a service let's

just say you like you're a coach or

you're a consultant and you will offer

like coaching packages or consulting

packages crowdfunding is probably not

going to be the best fit for you it's

usually a little bit more difficult when

it comes to services now there aren't

other like hybrid businesses out there

like let's just say you're starting a

food truck I've seen some very

successful food trucks that have raised

money with Kickstarter and IndieGoGo but

it's definitely not the norm you would

usually fit into one of these categories

if you are looking to use crowdfunding

for your business let's talk a little

about some of the elements of a

crowdfunding campaign if you're going to

be doing this for your business it is

going to be spending some time and also

investing a little bit in order to get

this actual offering together so that

you can raise six figures or seven

figures with crowdfunding the first

thing you're going to need again this is

the same across both of these is you're

going to need a video this is a pitch

video this pitch video is what people

watch is the first thing that they see

when they are encountering your product

and your brand the pitch video goes into

the various assets of the products the

various features the different things

different ways that people can use those

different use cases the video is what

kind of arouses people emotionally and

get some being like this is so freakin

cool man I want to buy one of these it

is bread and butter marketing don't

think of the video as some like

instruction manual or some you know

venture capital presentation it doesn't

work that way it's more consumer

friendly it's sort of actually getting

them more interested in thinking about

what if I owned

this looks so cool this person using

this in this lifestyle there's really

cool lifestyle easily think I want to

own one of these it's more of a

commercial than like a business

executive summary or something like that

in addition to having the video you're

also going to have images or gifts these

these go a long way to telling your

story the images can show different

images of the team behind this product

it can show different aspects of the

product you could go into the different

features and functionality maybe talk a

little bit about the problem or the

different use cases where you can use

this thing

the images are what sell the story while

yes people will read the text on your

campaign page the human eye naturally is

gonna gravitate much more quickly

towards images so you'll see if you go

on browse Kickstarter or you browse

different equity crowdfunding platforms

like start engine or refund or etc a lot

of the campaign pages are very image

heavy because that's what gets people

excited about the products and went to

over one of these I want to either back

or invest your in your crowdfunding

campaign the next thing you need with a

every single campaign is you need a

funding goal and also duration a funding

goal is the amount of money you are

seeking this is how much money you need

to make this thing happen to make this

initial production run happen to make

this thing a reality to make this this

actual project something that people can

have one day own and actually sample the

fundraising goal this is a kind of a

misnomer because a lot of people think

like hey if I want to raise a hundred

thousand dollars I should set a hundred

thousand dollar goal but that's actually

not how crowdfunding works the way that

crowdfunding works is you want to set as

low as possible as a goal and usually

almost a hundred percent of the time

you're going to be over funded because

once you hit that goal of let's just say

twenty-five thousand dollars you then

start trending well in the platform on

Kickstarter on IndieGoGo or start engine

or wherever you start trending well on

the platform then the platform starts to

get behind you start sending out the

newsletter you start to be ranking

better in the marketplace kind of like

with Amazon and then you start to rope

in more and more backers and because

it's over funded if you were like what

is this this project that's blowing up

this is really interesting I might take

a second to watch the video this looks

really cool so a lot of projects are

actually over funded so

the fundraising goal you want to set

this at the lowest possible number and

ideally try to go beyond this trying to

have that kind of a mindset with equity

campaigns it's not gonna be as over

funded as with rewards based campaigns

but you can do a little bit your own

research and you can see how that plays

out craft money is also unique for

having a duration and this is actually

bread-and-butter of any kind of

marketing launch you always want to have

scarcity and you want to have a reason

for people to take action now there

always needs to be a little bit of

urgency to get people to take action and

the cool thing about crafting is you

have a fundraising duration with your

campaign so it could be 30 days could be

45 days you could be 60 days but

basically at the end of that duration

you're closing up the campaign people

can no longer actually support you or

gain access to this product or get this

really cool discount or I should be able

to invest in your company this

fundraising duration is what gets people

to take action and it sort of Kindles

that urgency to get them to actually not

put this off but instead give money now

and get in now because otherwise they're

not gonna be able to the final thing

that I want to talk about when it comes

to crowdfunding for business is sort of

what happens next

and so the fulfillment phase so let's

just label this as logistics slash

fulfillment after you raise money with

Kickstarter and you go or you do an

equity campaign you then have to ship

out the products that you promise you

have to maybe do this internationally

maybe you have to actually finally get

these products manufactured and do the

minimum order quantity where it's an

equity campaign maybe you have to

actually do some shareholder management

and continue to communicate with them

but there is a little bit of

hand-holding that comes after the

campaign a lot of people think like hey

I just raised a million dollars that's

the end of the process but it's actually

not that's the beginning of the process

because after you get all that money

into your bank account then you go out

there and you make this product then it

gets to the hands of people once it is

in their hands that is the end of the

process with crowdfunding and then

you'll also start to get some of that

initial more validation and feedback and

you can then have a customer for life if

they enjoy the product other than buy

other products or if you're doing

another campaign they'll support that

campaign I hope you enjoyed this this

sort of crash course when it comes to

crowdfunding for business and

specifically the types

businesses that I think would be a good

fit for crafting I have tons of other

video and tons of other content that got

more nitty gritty into different

platforms into like the marketing

strategy into the filament like all that

kind of stuff so I invite you to dive

into my channel also if you want to

learn more in a very comprehensive

fashion I have a book out there the

Kickstarter launch formula also equity

crowdfunding explained

I'm a udemy course out there by on the

Kickstarter so lots of different stuff

if you are looking to become educated

about this I wanted to aside whether or

not this is a good fit for you and a

good opportunity they should seize and

you should take action now if you did

like this video please give me a thumbs

up so that other people know that this

is worth their time that they want to

that this is something they should

invest time in learning in addition

leave a comment down below if you do

have any questions I invite you to

subscribe to this channel because I only

put out high-quality education and

information on a regular basis and when

you subscribe please turn on

notifications so you will get a

notification when I come out with new

content and in that way it can make

learning so much easier and so much more

seamless all you have to do is sit back

and basically download this information

into your head I promise you I rest

assured I will prime you and make sure

that you are ready for your crowdfunding

campaign my name is salvador Bregman

thank you so much for watching this

video and I will see you next time