Crowdfunding has proven to be a popular way for entrepreneurs, particularly restaurant operators, to tap nontraditional funding sources. Maybe it’s become too popular, to the point where fund-seekers now have to figure out how to make their campaign stand out on the ever-more-crowded crowdfunding sites. No matter how cool your idea, you need a strategy if you want to have a realistic chance of getting it funded.
Keep in mind that crowdfunding sites have become an industry unto themselves. Kickstarter alone hosts roughly 5,000 campaigns per day. So many food and restaurant startups now hope to crowdfund a venture that a dedicated site, www.foodstart.com, has sprung up to handle some of the traffic.
Crowdfunding blog Crowdcrux.com has come up with a free guide that will help novice crowdfunders get started. You’ll find plenty of valuable advice in the article “Complete Crowdfunding Guide for Food-related Kickstarter Projects,” which can be found on the Crowdcrux site. It’s is a contributed article by guest poster Elena Mikhaylova, c.e.o. of Crowdfund Productions, a crowdfunding consulting service. Her advice is Kickstarter-specific, but is readily adaptable to other funding platforms.
Mikhaylova produced her guide by interviewing seven food businesses that successfully crowdfunded their idea. However, the interviewees are candid about the many mistakes they made in the process—there were some failures along the way—and are forthcoming about what they’d do the next time around.
Some of the key takeaways:
• It’s not just about the money. “Starting a Kickstarter campaign can be a great way to test the marketplace’s receptiveness to your product, attract media attention, connect with a larger community, and raise funds for a project.”
• Don’t start from absolute zero. “Kickstarter is all about momentum. You need initial backers to back you or your project will hardly be seen.”
• Seeing is buying. “ If nothing else, invest your time, energy, and money in a good video.”
There are plenty of other tips and strategies in this free guide, which takes perhaps just 15 minutes to read. Perhaps the most surprising is that, according to Mikhaylova, Kickstarter campaigns should be team efforts. “Teams are usually doing better than individual creators in attracting the crowd’s money. On one hand, they have more opportunities to prepare and promote their campaign. On another hand, potential backers feel more confident in a team’s ability to deliver a product.”
There’s plenty of good advice in this guide, most of it hard-earned via real-world Kickstarter campaigns. Give it a read if you’re thinking about ways you could grow your restaurant business without going into hock or giving up part of your precious equity.