You’re a first-time entrepreneur and you just finished your business plan for your first startup. But after practicing your elevator pitch over and over and networking, you can’t find anyone willing to invest in your company, and you don’t have enough in your bank account to bootstrap. So what now?
Instead of returning to a boring desk job, many turn to platforms such as Kickstarter and Indiegogo to crowdfund. These websites allow users to post a campaign for their idea to raise a set financial goal within a certain period. If you don’t reach your goal, all the money raised goes back to those who pledged to you.
While crowdfunding can seem daunting, Ruth Hedges’ goal is to make it as easy as possible for those thinking about taking the leap. Hedges is the CEO of Crowdfunding College in Las Vegas, which teaches the best practices for this kind of fundraising. Currently, she’s getting ready for the third annual Global Crowdfunding Convention and Bootcamp hosted at the Westin Resort and Spa at Lake Las Vegas from Oct. 23- 25.
For Hedges, crowdfunding provides a good alternative to both entrepreneurs and regular people than the more traditional venture capital route. After the Great Recession, it became harder for new entrepreneurs to finance their own ventures. For those wanting to invest, you would have to be accredited, which means your net worth would have to be more $1 million or you’d have to make over $200,000 for two consecutive years.
This can stifle job growth and cuts the middle class out from becoming wealthy, since the people who usually make the most money when a startup becomes a multi-billion dollar company are those who invested early, according to Hedges.
“There are trillions of dollars that sit in the control of 300 million Americans,” she says. “And they’ve been left out of having the opportunity to read these business plans because they’re not an accredited investor.”
The convention will offer instruction on creating successful crowdfunding campaigns and will feature panels on a range of topics, including bitcoin and veterans. Kevin Harrington from the show Shark Tank will also make an appearance as a keynote speaker. Click here to purchase tickets and find out more about the convention.
Until then, here are some of Hedges’ tips for a successful campaign:
- Find other companies similar to yours and analyze their campaigns to see what works.
- Create a video for your campaign. You have a 99 percent chance of failing if your campaign doesn’t have a video.
- Build a team of four or more people who work with you throughout the campaign. According to Hedges, your chance of success increases by 70 percent if you’re working with a team.
- Immediately jump in to social media, because the crowd does not come with the platform.
- Edit all the information that you’re going to be putting out to the public long before you begin and from an objective outside source.
- Monitor the campaign daily to answer any users’ questions.
- Don’t forget to ask for the money!