crowdfunding

Date: April 2, 2015

Name: How to successfully finance your business through crowdfunding with Mirey Faema

Presenter: Mirey Faema

Crowdfunding is an alternative and innovative way to fund businesses for entrepreneurs. Moreover, entrepreneurs can utilize crowdfunding to capture their ideal audience and demand. Jonathan Chow, the founder of Vancouver Entrepreneurs and Business Builders, invites Mirey Faema, the founder of Business Procedures Masterclass, to discuss her experience to launch a successful crowdfunding campaign. In addition, Entrepreneurs will benefit this presentation by understanding the essence of crowdfunding strategies.

Mirey Faema provides business solutions for entrepreneurs to grow their businesses. Faema is also the co-founder of CLIQ Crowdfunding. She has the passion to help businesses to implement new procedures to streamline their businesses. Moreover, Faema connects with many organizations with the concept of crowdfunding by focusing on the right message.

Faema states based on crowdfunding statistic; there is only 40% success rate to launch a successful campaign. The trend is leaning towards reward based crowdfunding, which are offer funds for the exchange of products. The market is extremely competitive and Faema must emphasizes crowdfunding is not free money and it is a method to build community around entrepreneur’s idea. The idea behind crowdfunding is to receive first and support the community.

There must be a strong philosophy behind the crowdfunding campaign. When the technology and gaming industries are booming, crowdfunding becomes the highlight of any funding method. However, when industry is over promised, people get skeptical over the idea of crowdfunding. Crowdfunding is great for product launch campaign because people can physically see the idea. Entrepreneur use crowdfunding to test their market demand.

Faema emphasizes crowdfunding is hard work because there is a lot of preparation and planning. The problem is entrepreneurs do not have the time to delicate the planning. Team is important and team is formed based on the goal of the crowdfunding. Faema suggests business should be solid before launching crowdfunding.

Faema indicates with a goal of $100,000 campaign, it needs 7 people in a team. Team can be involved with these 6 categories.

• Developing media
• Planning strategy
• Campaign design
• Branding strategy
• Video production
• Public relation

Business must be ready before crowdfunding is launched. Faema illustrates crowdfunding can change the infrastructure of a business. Business need to prepare the shift. Preplanning is important.

Aftermath of crowdfunding

Many entrepreneurs forget the procedures after crowdfunding campaign. Faema suggests entrepreneurs to provide deadlines for shipping and logistic. When crowdfunding is complete, the spreadsheet can be nightmare and entrepreneurs need to have a team to analyze the data. If the deliverable is not on time, entrepreneurs need to communicate to their community by offering incentive. The important thing is to keep up the communication.

“People can break your business if they are over promised”

Successful campaign needs a strong network on social media. Entrepreneurs need to structure their network before the launch. The idea planning period is on year and minimum 3 months. Faema suggests entrepreneurs to complete three strategies 6 months before planning.

• Build the excitement
• Build relationship
• Allow others to share

Entrepreneurs need to have minimal reward. Reward must have multiple levels, including pre-purchase. However, Faema shares crowdfunding is illegal if there is exchange for shares or ownership, even perks cannot be transferred. Entrepreneurs can use the subscribe strategy to lead people into the community.

Reward formula

Faema believes reward system should keep it as simple as possible. If entrepreneurs try to offer too much, they will break the campaign. In addition, if they offer too much service, they will dilute the focus of the campaign.

“Focus on primary service with the relevant reward”

Successful campaign requirements

Faema believes a successful campaign needs surround by a good idea. The process of crowdfunding is missing the step of feedback since crowdfunding is direct communicating to audience. Video must be simple and straight forward. The message must be easy to understand. The reward system is simple. If entrepreneurs include early bird reward level, it is important to ensure they have funding for back-end. Timing is the key. Entrepreneurs must launch it when people want it immediately and get them impulsively to buy it.

The visual must be creative. Entrepreneurs can use info-graphic to illustrate their concepts clear. Faema recommends entrepreneurs not to concentrate too much company profile in the video. The emotion can tie into the video; therefore, video should be professionally made. Humor can be a way to bring out the emotion in the video. It can resonant with the audience, relate to audience, and be creative. Overall, the video should answer the why, especially if the cause is for the greater good for the world.

“Instead of telling us why you are awesome, tell us why the service is awesome”

The target must be clear and call of action must be included in the video.

Fundraising and crowdfunding are two different type of funding methods. Crowdfunding is not by donation, it is pre-order. Moreover, crowdfunding can help business to get to the next level without any exchange of equity. Faema wants entrepreneurs to think crowdfunding as a business model. Entrepreneurs use crowdfunding to provide business and the audience will exchange for their services and products. It is important to foster the audience and convert the audience to super fan. Crowdfunding can create relationship and engagement with clients. Entrepreneurs need to ensure they thank the supporter and share or promote other similar projects.

Kickstarter versus Indiegogo

Faema describes if the campaign on Kickstarter failed, entrepreneurs will not get the funding. Therefore, entrepreneurs need to set their minimum goal and stretch the goal later by stating more objectives near the end of the deadline. Most of the time, supporters will support and push for entrepreneurs at the end if campaign is really close because they want to see them to be successful. As for Indiegogo, entrepreneurs will receive the funding no matter what.

Faema do not recommend entrepreneurs to launch two identical campaigns on both platforms. This will confuse clients and it is bad for social media publicity.

Many businesses use Kickstarter platform because even if the campaign failed, the recognition from Kickstarter will brand for the entrepreneurs to get external funding.

Campaign will fail if there is no budget. Entrepreneurs tend to spend too much on incentive. People like crowdfunding because it is open to public and not regulated by corporate traditional rules.

Faema wants entrepreneurs to understand that crowdfunding has no geographic restriction. Crowdfunding is based on creativity to get attention.

The expectation of budget for video is around $3,000 to $6,000. Many entrepreneurs underestimate the budget from holding or offline events.

“Crowdfunding is unpredictable because it takes the right person and the right time for this person to help you”

Outline for crowdfunding

Faema has created an outline for entrepreneurs to produce a successful campaign.

1. Understand the theory behind crowdfunding by searching and researching the existing product and market
2. Ensure the message is clear
3. Determine the minimum funding goal
4. Ensure business is ready for changes such as delivery and infrastructure
5. List the element of videos, such as reward based
6. Pre-launch planning and build referral, network, and branding
7. Develop campaign team and set time and support
8. Strategy to show commitment
9. Link Kickstarter and website to social media
10. Budget the campaign
11. Create campaign timeline to execute strategy
12. Develop the story with personal inspiration
13. Develop the pitch in video
14. Engage with audience
15. Provide well ongoing communication
16. Evaluate the campaign with performance measures

“Make a compelling video to allow audience’s personal feeling and experience to be a part of it”