Posts Tagged ‘Actually’

Actually

How crowdfunding is like dating.

Crowdfunding is just like dating in high school, says Candace Klein, CEO and founder of Cincinnati, Ohio-based debt crowdfunding site SoMoLend.
“Everyone wants to date the football player because everyone wants to date a football player,” she says. “In crowdfunding, donors are like that. . . . It’s important, if you are creating a crowdfunding campaign, to create the illusion of success at the beginning.”In other words, before you send out that press release, make sure you have some support. Sending out the press release with $0 toward their goal is the big mistake companies make, she explains.“You want them to log on and see you’ve actually raised money,” Klein says, adding that friends and family are a great start.

Only 30 percent of crowdfunding campaigns are successful, she says.“The largest reason for that is, a lot of project and business owners think, “If I build it, they will come.” That’s not how this works. It’s a full-time job and it takes active planning and active execution throughout the life of the campaign,” she says.

And an active social media presence.“Get five people who are very influential in social media to increase your traffic,” Klein explains.Klein, who is speaking Monday at a CED presentation titled “Tips and Tricks for a Successful Crowdfunding Campaign,” gave us an exclusive preview of her top tips for businesses embarking on a crowdfunding campaign:

“They need to understand which type of strategy they want to take with the business they have.” Klein says donation reward-based crowdfunding works best with consumer products that can be presold, and equity-based crowdfunding works well for tech companies expecting high growth but need a longer time to make profits. She adds that debt-based works well for brick-and-mortars – restaurants, gyms, that kind of thing.
“Small business owners need to understand what they have to disclose.” Klein adds that that includes a business plan and financial statements. “It’s quite a bit of information for a business owner to be comfortable with sharing.”

“Have a strong social media presence and a good group of influencers, people who have blogs that are well-read.” Part of it is having a strong support system, she says.

Video is not optional, she says. “A small business who uses video to communicate a story is about 115 percent more successful than a business who does not. Video is a very important element. It’s kind of like not having a photo on Match.com and no one wanting to date you.”As a lobbyist, Klein worked with Congress and the SEC in the writing and passage of the JOBS Act, which will be part of her talk Monday at American Underground in Durham.