The United States Securities and Exchange Commission (SEC) recently adopted rules to monitor small business start-ups’ use of interstate crowdfunding that provides access to small investor equity security markets, up to $1 million annually. Now startup entrepreneurs will have the option to either use nation-wide, or in several states intra-state, crowdfunding as a way of attracting new small investor capital or to continue attracting rewards-based funding from consumer platforms like Kickstarter. In an effort to mitigate some risk through investor-protection oversight, equity security crowdfunding will be limited to existing brokerage firms or new SEC registered Internet funding portals. Whether funded by investors or backers, creating crowd-attracting marketing “buzz” is still the name of the global crowdfunding game, expected to generate $34.4 billion this year.
In order to establish and maintain favorable marketing messaging that is both infectious and contagious, businesses looking for equity security or consumer-based crowdfunding, no different than individuals hoping to satisfy urgent personal financial needs through platforms like GoFundMe, must successfully execute the three following online marketing strategies well:
- Found relationships on trust. Campaigns lead by founders who are rich in industry-specific expertise directly related to the campaign’s Big Idea have found start-up advantage because these founders better understand industry dynamics, know customer needs and have valuable established network connections. Trust develops beyond experience confidence through timely and transparent campaign communication, the willingness to encourage consumer feedback and adopt positive contributions as well as the ability to deliver backer rewards on-time.
- Keep the Big Idea simple, visual and sharable. Just as new-generation What-You-See-Is-What-You Get (WYSIWYG) editors let computer users engage with design changes in real-time, What-So What (WSW) Big Idea message design builds relatable and sharable first impressions. The “What” component explains the campaign’s product or service while the “So What” explains why the message reader should care. For example, Kickstarter’s Initial 3Doodler’s $2.3 million campaign was described as “3Doodler: The World’s First 3D Printing Pen.” A Big Idea message encapsulates the campaign’s product or service through a phrase or sentence that expresses innovation, originality and ability to meet self-interest needs while igniting reader surprise, memorability and shareability-intention especially on broad social media platforms like Facebook or Twitter. The Big Idea should be the focal point of all communication efforts including an engaging, image-rich campaign landing page and campaign video.
- Help opinion leaders talk-up the Big Idea. Use email to engage your Big Idea’s target community well before your campaign launch by connecting with community opinion leaders such as well-respected journalists, publishers, bloggers or technical industry experts or other respected consumer groups that can perform early product testing evaluations. The ability to engage and build favorable opinion leader interest will generate early earned media impressions that can be reinforced by the campaign’s launch.
Thanks for reading this week! Have you become a crowdfunding backer? Tell me what was it about the campaign that sparked your interest, caused you to share the project with others or convinced you to become a supporter, in the comments below.
To read more about Online Crowdfunding Trends
Ruth Simon writes about “Small Businesses Struggle to Tap ‘Crowd’ Funds”
Chance Barnett writes about “Trends Show Crowdfunding To Surpass VC in 2016”