It may be a shock for some people if someone will say, “If you are not active on social networking, then crowdfunding is probably not for you”. But the bottom line is that crowdfunding is thriving because of email, Twitter, Facebook, Google Plus, and perhaps even LinkedIn. Imagine for a moment how much money is required to promote a brand or individual to the public without Twitter or Facebook. Spending on advertisements in local newspapers can cost quite a penny. It may be required to approach a crowdfunding agency; even they will charge money for the services. Someone may have to host a cocktail party, which may cost them some substantial funds as well. Some will have to make a cold call to one or two investors and treat them for a night out in the town. This can help in gaining investor’s attention on the project and if possible get funding in form of cheque.
With social networking, the campaign itself becomes the cocktail party. The pitch video is the opening speech; a few Tweets throughout the day and a Facebook status update serve not as ads, but as headlines in their very own newspaper. A lot of money can be saved with social media assistance. But this does not mean one should set up a Twitter account or Facebook profile just for the sake of crowdfunding campaign. People might make the assumption that it was done only because they needed money. Having thousands of twitter followers does not mean there will be a chance for crowdfunding to happen. Considering that only a small percentage of followers may donate, more followers mean better chance of success.
In social networking platform one has to build their core audience. This can be done by engaging people with similar interests in meaningful conversations, and by clicking “Like” on updates and Facebook pages. Becoming friends with the folks and sharing interesting links will help other crowdfunders with their campaigns and they will in turn help yours. On Twitter, one can follow accounts, lists and hash tagged subjects that relate to the business area. Finding the type of people with whom one can engage and following them is helpful in building followers as the fans discover about you. One of the best ways to get followers is to post things others want to read; don’t let the first time followers hear, “Hi, please back my crowdfunding campaign.” One can start a Facebook page to help the business. One can use various tools such as Hootsuite to schedule automated posts on social networking accounts.
Social media acts as the perfect platform for start-ups and individuals looking to fund their personal projects where they can promote their cause, utilizing their fan club under their own name. This is the investment one can make for the crowdfunding campaign without spending much money. The reason behind social media becoming a hit for crowdfunding is that one type of crowd draws other types. If someone has a well-populated page, it is going to be easier to get new fans to like that page. This will help in gaining more likes as this sort of endorsement indicates that the page is a safe place, worthy of visitor’s time and attention.
This article was written by Anand Shanker, Senior Analyst with DART Consulting.