Getting your proposal on Startme just right will be crucial to you being successful with your fundraising campaign. Levels of contribution, attractive rewards, the logistics of creating and delivering the rewards and engaging with potential funders will all be part of this process. As with everything, preparation is first step to being successful and effective at what you are hoping to do. So let’s look at a few of the steps with some useful examples of how to prepare effectively for your first StartMe project.
Almost all the suggestions here are based on real examples of entrepreneurs who have been very successful at raising the funds they needs, in some cases raising far more than what they first intended.
Step I: Preparation
(1) Create a detailed outline for the final product; you won’t necessarily be sharing all these details at the beginning, but it will give you enough information that you will be able to answer questions and give potential funders a firm idea of where the project is headed. More importantly, this will help you decide what parts of the project (if any) are negotiable and open to input and feedback from funders.
Insider access and input are the most important things you’re selling to your funders, so give this very careful thought. You absolutely have to be up front and clear about which decisions have already been made and which are open to negotiation. The more input funders get, the more interest you’ll be able to drum up for the project — but don’t promise more than you’re willing to deliver.
(2) Figure out a reasonable production schedule, complete with benchmarks for starting and ending major phases of the project. Be warned that the more access and input your funders have, the more drawn out the schedule will become; a good rule of thumb is that any stage where they have input will take approximately twice as long as it normally would. (Seriously, my single biggest mistake was underestimating how much this could stretch out the process; the phrase “herding cats” comes to mind, especially at the earliest stages.)
Ideally, you’ll set your schedule with enough padding that you can consistently stay ahead of deadlines; if you under-promise and over-deliver, you keep your funders happy.
(3) Calculate a comprehensive budget, including fair payment for freelancers (yourself included!), printing and shipping costs, overhead for your website, etc. Once complete, figure out how much of that budget you can afford to put up yourself and how much you’ll need to raise on StartMe.
It is advisable that you plan to put up approximately half of the total costs yourself with a StartMe project; Remember that “half the total costs” might include your own unpaid labour in addition to or instead of actual up-front capital.
The reason you should plan to put up half the costs yourself is that you want the fundraising goal to be as low as possible; StartMe statistics show that 90% of projects that reach 30% of their goal are successful (i.e. reaching 100% or more by the deadline). Given this, you want to do everything possible to hit that 30% “tipping point” as early as possible, and the lower you can set the final fundraising goal, the better your odds of doing so. (Obviously, there is a trade-off here: You absolutely cannot set your fundraising goal even one cent less than you really need to complete the project as promised and on schedule.)
There is one critical component of your budget that you can’t plan with 100% accuracy ahead of time: the cost of rewards for your funders. Lets look at an example of rewards and the related funds:
Invest R100 and get - An investor only grand opening of the brewery. Free Boerewors roll. Plus a brewery tour by the brew master.
Invest R500 and get - Beer bottle opener +everything above
Invest R1000 and get - 1 large bottle of limited edition founders lager. +everything above
Invest R5000 and get Get your name on the wall of founders. +everything above
Invest R1000 and get Brew with the Brewer, do some tastings of the local beers. +everything above
Invest R25 000 and get 5 Course Brewery dinner, professionally prepared with beer pairings for you and 3 of your friends. +everything above
Invest R50 000 and get 5% share of the business... that's right, big money brings in bigger returns. You hit this point you get 10% of the company +everything above
Invest R100 000 and get Consult and name your own beer in the main, seasonal line of beer. +everything above
Invest R150 000 and get Consult and name your own beer. We'll even put your face on it. +everything above
Invest R300 000 and get Free beer for life at the brewery beer pub for yourself. +everything above
If you get 500 supporters at the R100 level, you have no real cost to deliver your rewards.
If you instead have 200 supporters at the R5000 (name on the wall) level, you’re going to have to have quite a large wall.
If you instead have 10 investors donating R50 000 in exchange for the 5% you are offering then all of a sudden you have very little of your own business left. So think carefully about these rewards.
See how that works? Depending on what reward levels people choose, your ultimate costs can fluctuate dramatically. Plan and budget for the worst-case scenario (just to be on the safe side); realistically, you’ll probably find that a very high percentage of your funders will choose the higher reward levels (whose rewards are abstract and free for you to provide), but it’s hard to predict exact levels of demand for the rewards. Always remember that you will have to deliver on these rewards in the near future.
(4) Figure out your marketing campaign to sell the idea. This needs to be every bit as developed as you would do for a finished product:
Think of what you would write on the back cover (basically a one-sentence hook that leads into a 75- to 100-word elevator pitch). Use the opening pitch to lead into a 500- to 1000-word detailed description of the project, its goals, and what a investor gets in exchange for their early contribute. Find a good place (near the top) to sell yourself as well; potential funders need to have confidence in your abilities, and highlighting your experience can help make this happen.
You’ll need a good logo and artwork to really sell the professionalism of the project. (This is one place you have to sink in some significant time and/or money ahead of time.)
On your website, you’ll also need more detailed information, a FAQ, and (ideally) message boards. Elsewhere, get all your social media stuff (Facebook fan page, Twitter, etc.) set up. You want everything in place to allow for you to actively engage with potential funders from the very beginning; early and consistent engagement is the single most important thing you can do.
Finally — and I can’t emphasize this enough — you need an introductory video. It needs to be short and to the point, and it should establish a personal connection that helps potential funders get to know you.
Step II: Establish the StartMe Project Details
(5) Decide on the start and end dates for the fundraising drive. Last year, I recall reading on the StartMe blog that projects with a duration of around 30 days seem to have the highest success rate. If you go too short, some potential funders might not be able to contribute because they don’t happen to have enough free money (and they don’t have enough time to save up for it). If you go too long, you risk the project losing momentum; discussions might fade out, people might put it off for next month and then forget about it, and so forth. A length between 30 and 45 days is probably best.
When you pick your ending date, give some thought to how much people have available at a given time of the month or day of the week. Personally, I would recommend having the project end in the second half of the month, preferably on a Friday or Saturday night. Lots of people get paid twice a month (e.g. the 1st and 15th), and the first paycheck is often earmarked for major bills such as paying the mortgage or rent. People who get paid every week or every two weeks very commonly get paid on a Friday (not all the time, but often), so you want to have the deadline come at a time when they’re more likely to have a little extra money.
I recommend setting the deadline on a Friday or Saturday night for another reason as well: You will get a lot of last-minute contributions, so you want to make sure the deadline is at a time when the majority of potential funders have the opportunity to do so (i.e. awake and not working) just before the project ends. Some don’t want to get emotionally invested in the project until they know it’s going to be successful, and some might just want to sit on the idea until the last minute.
(6) Decide on your reward levels for funders. This is a critical phase, and it’s probably the easiest to mess up; take your time to consider things as holistically as possible. (a) Your lowest-level rewards should require a contribute of no more than R200 (and preferably no more than R100). For example, a An investor only grand opening of the brewery. Free Boerewors roll.
(b) The lowest levels should have minimum contributions equal to the purchase price of pre-ordering the finished product. For example, you might have a R100 An investor only grand opening of the brewery with a Free Boerewors roll, and a R500 contribute for a Beer bottle opener. In addition, they should get some basic insider information during the project, such as frequent updates, sneak peeks. Finally, it’s nice for these early funders to get their rewards before the product goes on sale to the general public; it doesn’t have to be much earlier (e.g. maybe a week), but a little bit goes a long way toward making funders feel that they’re getting special treatment and that their early support is appreciated.
(c) The mid-level tiers should begin to focus on exclusives (e.g. a hardcover edition only for funders, autographed copies, etc.) and greater degrees of access. As you go up to higher minimum contributions, try to think of intangible rewards that are relatively easy for you to provide but that give the funders special treatment that makes it worth the extra money. For example, autographing the book is free and it’s a nice touch. Similarly, rewarding these funders with a vote on major items doesn’t cost any extra money on your part (but it does take time, so plan your schedule accordingly).
(d) The higher-level tiers should offer particularly special exclusives such as the get your name on the wall of founders and nominate ideas for their own flavours of lager. These tiers should usually be limited in number; first, you don’t want to end up with a “too many chefs in the kitchen” situation, and second, the fact that they are exclusive and limited will encourage people to make these higher contributions early. High-level rewards also have a secondary function: They provide contrast that shows how good a bargain you get at the lower- and mid-level tiers. Sometimes, all someone needs to talk themselves into making a purchase is to see a more expensive option that they can reject, allowing them to feel like they’re being frugal and not wasting money on unnecessary extravagance.
Of course, a lot of people want to feel like they’re buying the best of the best, and they don’t mind putting up a little extra in exchange for special treatment. For them, the lower-level tiers provide a nice contrast that shows how special the higher-level tiers are.
(e) Consider including at least a few ultra-high-level reward levels that are very limited in number. For example free beer for life at the brewery beer pub. There are lots of variations you can play with here. For example, one idea I saw was to have the designer personally deliver the product to the VIP investor and even run a complete adventure for the investor’s gaming group. Obviously, you have to set this contribute high enough to pay for your travel and lodging plus enough extra for it to be worth the extra time on your part, but I’m sure that this idea could sell.
(7) Do a soft launch for the project on your website and via social media at least 30 days before you start the actual StartMe project. You want to get the word out and get people interested and talking before you start the fundraising drive itself. At this stage, you’ll need to be able to tell people firm dates for the start and end of the StartMe drive, reward levels for funders, and so forth; use your own website as the central location for this because you won’t have a StartMe page to send people to until later.
Go to any message boards you frequent to post about the project (but don’ spam — if you don’t regularly post somewhere, don’t announce in that forum). Include links to the project in your message board profile and signature.
There are plenty of other websites and blogs that might be interested, so don’t be shy about getting in touch with them to tell them about the project (perhaps as a formal press release).
Get all your friends and colleagues on board; the more voices you can get talking about the project, the better your odds will be.
(8) Do frequent Google searches (or set up a Google alert) to find people talking about the project; you’d be surprised how many different places you’ll find. When you find blogs or forums discussing your project, always post a reply. Be exceedingly polite and patient in answering questions, addressing concerns, and — most importantly — being understanding and complementary toward people who don’t like the project or aren’t interested.
(9) When using social media, make sure you don’t ever come across as spamming. Facebook fan page updates shouldn’t be more than 1-2 times per day at the very most; similarly, make sure no more than 20-30% of your Twitter activity is devoted to promoting or discussing the project.
Make sure you have something new to say each time; don’t just remind people over and over again about the project. As you engage with potential funders, you’ll get some good discussions going; when this happens, use social media to get other people in on the conversation. This keeps it fresh and gets more people engaged.
The only times you should risk posting more frequently are just as the StartMe phase is starting and in the last 2-3 days before it ends. At this point, a few extra reminders about the project are understandable and expected, so your fans and followers will forgive you for the extra posts at these critical points.
(10) Based on feedback you receive during the soft launch, be prepared to tweak your sales pitch; you’ll find a lot of things that don’t quite get the idea across, and this is a good chance to make adjustments and find good material for your FAQ.
In addition, you might want to add some additional reward levels, shorten or extend your fundraising period, and so forth. A lot of these details can’t be changed once you launch the StartMe project, so this might be your last chance to make any final adjustments.
Step IV: StartMe Launch (11) Stay engaged. Continue everything you were doing during the soft launch, but make sure you direct people to the StartMe project page directly instead of sending them only to your website. The fewer clicks someone has to do to make a contribution, the higher your conversion rate will be.
(12) Add a StartMe widget to your website and any message board posts where you have announced the project. Once the project is live, this widget can be used to provide a direct link to the project along with its current status (number of contributions, funding level, % of goal achieved, and number of days remaining).
This is a very useful tool — don’t overlook it.
(13) Post frequent updates on StartMe itself, following all the same rules as for social media (i.e. make sure you have something new to say, preferably a topic or question that will get people more engaged). An update 1-2 times a week usually seems about right. You also have the option to post updates that are visible only to people that have already made a contribution; use it when needed (especially when you’re making the final push as the deadline approaches), but don’t overdo it.
Keep a close watch on comments and questions posted by potential and current funders on the StartMe project; I don’t think you automatically receive notifications of these, so you need to stay on top of it yourself.
(14) DON’T PANIC.
Seriously, don’t worry too much about the contributions (or the lack thereof) on any given day. In my experience, the fundraising breaks down into four distinct phases:
(a) During the first quarter of the fundraising period, you’ll see a nice initial burst of activity (especially in the first few days). These earliest funders will often be your most important supporters, and many of them will actively promote your project to others. Show them your gratitude in as many ways as you can.
Ideally, you’ll reach that 30% tipping point (making you 90% likely to be successful ultimately) during this stage, but don’t worry too much if you don’t.
(b) During the second and third quarters of the fundraising period, things will slow down. The early adopters have already made contributions, and during this long middle you should get a slow but steady trickle of new contributions. Your biggest challenge during this period is keeping people excited and engaged; stay active, pitch ideas, and get them talking as much as you can.
(c) During the final quarter of the fundraising period, things will pick up again. A lot of people get their last pay check before the deadline within this last week, so this is their first chance to make a contribute (and to be certain that they won’t have to back out of it). As the number of contributions increases in the final quarter, the activity will begin snowballing as people become surer that the project is going to make it to its goal.
(d) Somewhere along the way — maybe early, maybe late — you will be right on the threshold of reaching your goal. When this happens, be prepared for another surge of new contributions; it’s something of a bandwagon effect. I suspect that many people don’t want to get their hopes up for the project, and once it crosses this line (or gets very close), they’re willing to emotionally invest in it and make a contribute.
In fact, many of your earlier funders will even increase their original contributions as you get close to the goal; once it’s that close, they decide to help push it over the top because they really want to see it succeed.
(15) Once the deadline hits, you’ll be busy for a few days doing stuff like sending out information requests via StartMe (e.g. so you know where to send the final product), but make sure you take the time to thank everyone for their support. They deserve the credit for making it happen, so be humble, gracious, and thankful to them for all their hard work.
As the project goes forward, obviously, you’ll need to keep them engaged as the real work begins; try to update StartMe with the latest news every now and then. This ensures that all of your funders receive the update because not everyone will check your website regularly.
Don’t be surprised if a large number of your funders turn out to be relatively quiet during the post-fundraising period; a fairly small portion of them (maybe 20%) will turn out to be the most active and vocal, but don’t misinterpret the relative quietness of the other 80% as an indication of disinterest or disapproval. They’ll speak up when they need to, so make sure they always know how to get in touch with you when necessary (e.g. using the messaging feature on StartMe if nothing else).
These tips are all useful for you to consider when creating your first StartMe project. Once you have gone through the process and are posting your second project (for some) you may be much better prepared for what is to come. In the meantime learn from what we have experienced, make your proposal interesting and exciting and try to view the opportunity through the eyes of the in