SA Crowdfunding Blog

Wednesday, 06 June 2012 04:34

How to Use Social Networks for Crowdfunding

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A very obvious part of successful crowdfunding is making connections with like-minded people, both from among existing friends and contacts and those who are looking for what your project has to offer; this is where social networks and crowdfunding comes in.

The great part of this type of fundraiser is there are no limits to where you or your prospective benefactors live. Of course, you want to play off your local scene as much as possible, especially for campaigns that involve your particular area of South Africa.

In learning how to use social networks and crowdfunding to raise business capital, it is important to realize that social networking in regards to crowdfunding is not entirely about friends and associates. There are many individuals looking for investments they believe will do well, even if they personally have little regard for the end product or achievement. As anyone in sales will tell you, there is no way to know for certain who the next client or customer will be.

Social networking has become today's vehicle when it comes to spreading the word quickly and raising public awareness on any issue. The way that you use your networks is one of the most critical parts of a plan if you are to have success in social networks and crowdfunding. You should develop a tone for your campaign before you make any attempt at solicitation, and hold true to it for the entire fundraiser so investors feel confident with your position.

Using the Tools of FaceBook

You can't speak of social networks and crowdfunding without mentioning FaceBook. It has maintained the number one status for some time, and continues to outdistance its rivals. How you approach the promotional part of networking is a bit trickier because if it's too heavy a pitch, visitors will lose interest and leave.

Do not miss an opportunity to present your cause, but do so as you share and care about the many things that interest others. No matter what you are raising money for, there is a better than average chance that many of your contacts will not be interested in contributing. That doesn't mean that they won't be willing to pass information along to their own contacts if you generate excitement about your purpose.

All internet marketers will tell you that branding is one of your best tools, so creating a visually appealing logo to identify your product, service, or even your campaign should be at the top of your to do list. If you have a brand, it can be subtly placed in the backdrop of pictures on your wall, the same way advertisers have been doing for many years.

Place links to articles and sites that have some positive tie to your cause. You want everyone to see all the terrific attributes your idea, product, or service has to offer.

Don't Underestimate Twitter

Did you know that between Twitter and FaceBook there are a billion unique visitors each month? There is bound to be some overlap from one media to another, but that is quite impressive by any standards. The limitations of Twitter are exactly what some people like about it. The popularity of texting has created a language and style for saying much in short sentences which is what "tweets" are based on.

You can't go into detail about why you are raising money, but the idea is simply to grab attention so your constituents will want to find out more. This is similar to FaceBook, just in fewer words. Twitter's limited character entry also stops you from putting too much info into the tweets.

While every message you send by way of Twitter can reference your attempt to raise capital for your crowdfunding project, you must use discretion about how often you do if you are don't want to turn your audience off.

Pinterest - One of the Great Social Media Networks for Crowdfunding

Although it doesn't have the huge following of Twitter and FaceBook, Pinterest continues to grow because it centers on the interests of its users. What makes Pinterest so appealing is that anyone can have several objects of interest; they aren't required to stick with one topic. People become connected because they find a central issue they identify with, and this is exactly what you look for in social networks and crowdfunding.

For instance, someone who is a rocket scientist and another who is a housekeeper can both be entertained by food and new recipes. This small connection is all that is necessary to form a friendly bond.

The Pinterest basics are that users pin pictures and/or videos for others to drop by and see. Links can lead anyone wanting more information to a crowdfund site or another social media network portal. The fact that entirely unrelated people can come together based on one theme shows the power of this social networking format. That coupled with the millions of new "pins" added each week gives you many possible connections with potential investors.

Where FaceBook is a broad arena, Pinterest can be more specific and right to the point. While it is possible to mix signals on a pin board, it is highly undesirable to do so because that defeats the reason of the theme. Besides, having another interest necessitates another pin board.

Images or videos do not have to be the property of the person posting them, as long as credit is given where due. It is important to have good, clear postings to give a professional face to social networks and crowdfunding campaigns.

LinkedIn for Pooling Professional Resources

A more professional atmosphere is presented by LinkedIn as far as social networks and crowdfunding are concerned. Unlike other social media networks where fun and entertainment are the chief ingredients, LinkedIn is a place to develop profiles about people and companies, with the emphasis on career-minded individuals. Many use this platform to advance their career in their profession and to seek employment. From the standpoint of social networks and crowdfunding, it is an excellent arena to establish credibility in both you and your cause.

As a LinkedIn member, you can dedicate a page or pages that give all the details of your crowdfund, as well as provide relevant information on concepts, success stories for similar endeavors, and technical information that gives validity to the cause. Keep in mind that visitors will be more inclined to want more information on LinkedIn than other social networks because they are looking for professional sources.

Another aspect of LinkedIn is that because it appeals to those in business, it is a much better platform for finding the larger investors. FaceBook can bring in volumes of contacts, but those willing to invest in your cause are only going to amount to a small percentage, and many of those will only be willing to depart with small donations or investments.

Combining the Formats to Get the Best Results

No doubt, you have noticed that most business sites you visit on the internet have buttons for FaceBook, Twitter, LinkedIn, and other social media platforms. No one wants to miss out on the network that a potential client uses. This interconnectivity allows you to fashion your campaign to build on the strengths of all your social networks and crowdfunding.

It is very common to find FaceBook posts that announce an activity that has taken place on Pinterest, for example.

It may be mind-boggling to consider how much vested time you can spend with social media to get your message out to the public, but when you break it down, it isn't any more difficult than beating the streets to find investors for your idea. In fact, you will most likely get a better return for your effort in social networks and crowdfunding than you could ever hope for by going door to door to sell yourself and your project.

You might view the independent social networks as your "hooks" to catch prospective investors and draw them to a webpage where you make the real sales pitch. Since all social networks and crowdfunding efforts vary, you can expect to get a very diverse group coming to your sales page. Since these individuals are looking for different interests in the beginning, your bait has to be somewhat different at LinkedIn, FaceBook, Pinterest, and Twitter.

One precautionary note is to make sure no matter how you attract investors that you do not attempt to draw them in under false pretenses. Never put a come on line in your link text to make someone think they are going somewhere they are not. This is the wrong way to go about trying to garner trust from people you want to do business with.

Other Social Network Tools

There are many more media tools, some of which are regionally important to social networking and crowdfunding, but they all will mesh together to cover the necessary bases with a campaign that utilizes them. After considering the big names in social networks and crowdfunding, it is also a good idea to look to entities that pursue crowdfunding almost exclusively. These social networks have already spent the time to link with individuals ready to invest as well as other potential support groups.

Startme is one place to begin a crowdfund campaign with a base of about 10,000 possible investors. It saves time when the audience you are addressing is already looking to invest in good ideas and/or products. You may approach a million people by way of social networks and crowdfunding, but if they aren't looking to invest, you can expect little more than a single digit percentage of success.

While Startme is a South African crowdfunding platform, investors from anywhere can fund a project simply by having a PayFast account. The site is free to use, with a small percentage fee being charged only on the funds raised (4% if goals are met, 9% if not).

Regular followers of Startme want to find good projects that fall below the radar of bank financed opportunities. They realize that risk is a part of investing, but they want the opportunity to decide on where their investment dollars are to be placed. Many have watched their capital assets drop in recent history while they were being handled by professional investment advisors.

Knowing the Ropes on Investing

Investors are much more inclined to come on board at the initial phase of your social network and crowdfunding attempts when the excitement is high, or near the end, when the project is almost assured of getting started. During the middle period, it is more difficult to attract contributors. Sites that cater to both social networks and crowdfunding understand when and how to push the buttons.

Attempting to use your friends for social networks and crowdfunding without any previous experience with the system may not be satisfying for you or your investors. While the crowdfund is relatively new in South Africa, it has been used with good results in other places, and you may want to tap into the knowledge acquired by those who have carried social networks and crowdfunding from start to finish with success.

It is certain that this new form of fundraising is here to stay. The sooner you look at the ways it can best serve you, the better. In a short time, social networks and crowdfunding will be more competitive because there will be many people attempting to sell to the existing investor base, so get started early.

Read 7255 times Last modified on Wednesday, 06 June 2012 04:48

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