CROWDFUNDING

(tool)

Brief description

Fundraise for your solution or project by advertising your solution and raising money from many users. The users can back your solution at different investment levels with different benefits in return.

Step

Prototype Testing

Input

Solutions that can benefit or needs fundings

Output

Viability and desirability

Customer feedback and relationships

Fundings

Time

Preparation, medium

Execution, 5 days to weeks

Analysis, medium

Difficulty

4/5

People

participants giving feedback depends on your funding target goal

2-4 (coordinators of the experiment)

Quick Guide

  • Define the amount of money for your funding goal ($). The funding goal should be realistic and achievable.
  • Define your target users (employees, key stakeholders, or possible customers) for the crowdfunding.
  • Design and create your crowdfunding campaign. It should have a pitch that explain your solution, the funding goal, and how the funds will be used.
  • Promote the crowdfunding campaign to the target users through various channels (email, social media, and internal communication) or you can use existing crowdfunding platform.
  • Track the progress of the campaign and communicate the progress regularly.
  • If you achieve your goal, reach out to contributors, and thank them for their support and celebrate the success with them.
  • Show them on how the funds were used and how their contributions have made a difference and recognize the individuals or teams that contributed the most.
  • If you did not achieve your goal, reach out to contributors, and explain that the campaign fell short and provide an update on how the funds raised will be used or pay them back.
  • Assess why the campaign was a success or why it fell short and use what you’ve learned to iterate on the campaign or in your solution.
  •  

Benefits

  • Build awareness and reputation of your solution in the market.
  • Foster a sense of ownership and engagement by allowing users to contribute to solutions or projects that are important to them and/or the company
  • Receive directly feedback from early and highly interested users and create a community by engaging with them.
  • Find promising partners, investors, and customers, and get the money you need to create your solution.

Helpful Tips

  • Make it easy for the users to understand why they should contribute, use clear and concise messages.
  • Communicate regularly, openly, and transparently with contributors to help maintain their trust and support.
  • Provide incentives to motivate users to contribute, you can offer rewards such as merchandise, recognition, or a chance to participate in the solution or project.

Application

Additional Information

Elements to help you with your crowdfunding.

Different approaches to create your crowdfunding
  • Internal crowdfunding in a company.

Allows collaborators to contribute with money from the budget of their area to support a project, idea, or initiative within the company. Unlike external crowdfunding, which are open to the public, internal crowdfunding is restricted to collaborators or areas of the company.

  • Rewards-based crowdfunding.

The backers typically contribute small amounts of money in exchange for some sort of reward. The reward does not necessarily have to be the item being produced; it can be an initial version of the solution at a discount from what is expected to be the future retail price.

  • Donation-based crowdfunding.

Donors generally donate small amounts of often and often, the reward is non-existent except goodwill and perhaps a tax-reduction. Even though there is no significant reward, campaigners often come up with smart and valuable digital rewards to boost donations.

  • Equity-based crowdfunding.

Investors that invest money, get a (typically small) piece of equity of your company or project.

  • Debt-based crowdfunding.

Micro-loans with the expectation to get paid back the principal plus interest. It is like a bank loan with interest, but instead of one bank, there are multiple lenders.

  • Recurring crowdfunding.

Users contribute with a recurring amount of money – either on a specific time and period (for instance every week or month) or triggered by the creator making something new (for instance a song, a new album, etc.)

 

Existing platforms to place your crowdfunding
  • Kickstarter
  • Indiegogo
  • Crowdrise
  • GoFundMe
  • AngelList
  • Crowdfunder

Let’s learn and share your experience with racu