Earlier this year, we hosted our second edition of our “How She Did It” panel series and talked with four female experts about their experiences with various crowdfunding methods, sharing stories and advice about the good, the bad and the ugly. Here is what we learnt from them.
- Crowd funding takes more than you think it will
- Things go wrong – it all depends on how you react to it
- Funds won’t to fall into your lap
- You’re going to have to work hard for the money
Who are they?
Joanna Montgomery is the founder of Little Riot and the investor of Pillow Talk. Pillow Talk is “the next best thing to being with your loved one”. The product is a wristband and picks up your heartbeat and sends it to your loved one. She has raised £82k using Kickstarter.
Emily Shipp is a growth and marketing consultant, and an author scout for Unbound. She also tutors for General Assembly London. She works with authors to crowdfund their books on Unbound, from where they can raise anything from £5k to £100k.
Kirsty Ranger started Idea Squares as a platform to crowd source feedback for business ideas and tests their readiness for crowd funding. She is also a mentor for Entrepreneurial Sparks.
Olivia Knight is the founder of Patchwork Present, a website where friends and family can come together to collectively buy a large gift for someone else.
Experience with Crowdfunding Platforms
“Running a crowd funding campaign is probably the hardest and most stressful thing I’ve done,” Joanna said in regards to her experience using the crowdfunding platform Kickstarter. At first, all was going well, and the campaign managed to reach their goal, and even got over-funded. This was when the issues with Kickstarter started. Backers started receiving emails saying that their payment had not gone through, because Kickstarter was having transactional problems. It took 2 hours to get the issue fixed, but the damage had already been done.
Pillow Talk received only about 60% of the contributions, because by the time the issue was fixed, people had changed their payment details, or withdrawn their support. This was the week before Christmas. This error and the issues caused a huge loss in confidence from the investors, and Kickstarter themselves were not helpful. On top of this, as per policy, Kickstarter still took an 8% fee from Pillow Talk despite all of the issues.
“Mistakes happen, but it’s how you respond.” Joanna added to the end.
Emily talked about the struggles of working with naturally creative and secretive people. “Authors aren’t generally natural crowdfunders,” she said. They have a tendency to keep their ideas close to their chest, and nurture them there, and are wary of sharing their product. In order to be a good crowdfunder, Emily recommends planning far, far in advance, and being ready to grow trust between the product and the people funding the project.
Crowdfunding is, in essence, 50% dedication and ideas and 50% planning. It takes a lot of strategy in order to create a successful campaign. She recommends being very plugged into social media, and also being planning ahead for the plateau. Everyone at some point flattens out, and the best campaigns are ready for that time.
Kirsty funded Idea Squares in 3 small chunks using Seedrs, a UK based equity crowdfunding platform. Because Idea Squares prepares products and ideas for the crowd funding stage, Mrs. Ranger had a very unique experience with crowdfunding, and also very good advice.
She recommended getting funding in small chunks, especially if it is your first time crowd funding, increasing the funding target at chunk in order to grab the attention of investors. She also put emphasis on the importance of maintaining a good relationship with your first group of investors. That first group become ambassadors for your brand and your product, so you want to keep them in the loop with what is going on.
Patchwork Present was also uniquely funded. Liv did not use a platform to fund her idea, despite a goal of £250k. She looked at her other options first, including loans and banks, but the banks wouldn’t lend without a guarantee and loans wouldn’t take her flat as payment for the funding.
What she did instead was host an event, presenting her idea to friends and family, despite an inclination to keep the idea secret in case someone else stole it. She held the event, asking for £250k for 25% equity in the firm, and asked if anyone was interested to let her know.
Fortunately, eight people were interested in her idea and she was able to raise the money in two and a half weeks!
Top Common Mistakes Made In Crowdfunding
- Sloppy pitches
- Awful videos
- No crowd engagement
- Over valuing the company (in case of equity crowdfunding)
- Not setting the target high enough
- Not committing enough time to the campaign
- Not realizing the effort and time needed for preparation
- Diluting the campaign across multiple platforms
Tips for a Successful Crowdfunding Campaign
- Be comfortable talking about what you’re doing and be the biggest advocate for your campaign.
- Be consistent about who you are. It’s your ambition and genuineness that people buy into.
- Find something people can connect to on an emotional level. People have to love what you’re doing and engage with it.
- Choose the right crowd funding method for your business. 80-90% of proposals are declined from equity crowdfunding platforms, for example.
- Work through kinks and problems until you ask for people’s money, especially in hardware.
- Make sure you engage your crowd. Crowds join crowds. People follow people. No one wants to be first on the dance floor.
Pictures from the Event