Crowdfunding was originally used to finance cultural, creative and charitable projects. However, start-ups and SMEs have also entered the crowdfunding market in recent years. The principle is that anyone with a good idea can raise the capital required from the Internet community via a platform. Various crowdfunding platforms are available online to launch such campaigns. In return, the company or organization thanks its donors with a gift. If the self-set funding goal is achieved within the campaign period, the initiator can keep the money collected. However, if the campaign fails to raise the funding required, the donors – who are known as boosters – get their money back.
Five steps to successful crowdfunding
Crowdfunding is also becoming increasingly important as an alternative to traditional bank financing for companies and projects in Switzerland. Crowdfunding platforms also enable Swiss private persons to become investors themselves and, ideally, make a profit.
Donate, support, lend or invest – various ways of achieving your goal
A distinction is made between various types of crowdfunding:
- Crowddonating: money for nothing in return
- Crowdsupporting: money for non-financial benefits in return
- Crowdlending: money that is repaid with interest
- Crowdinvesting: money in return for shares, involvement in decision-making and profit participation
Whichever variant you opt for, there are a few things you need to bear in mind to ensure your crowdfunding campaign gets off to a flying start. These universally applicable pointers will help you to successfully raise funds for your project.
Five tips for successful crowdfunding
- Select the right kind of crowdfunding and a good platform. There are lots of crowdfunding platforms with various functions and creative options. You could also set up your own online platform and integrate it into your website.
- Getting off to a solid start is extremely important with crowdfunding. Experience shows that investors prefer to fund projects that have already found donors. That’s why it’s important for you to convince a lot of people to support your idea right from the outset. As a rule of thumb, funding should be secured for around 30% of the project before the start of the campaign. This means you should firstly try to generate interest amongst your personal circle so that you can then attract external investors at a later stage.
- Crowdfunding is a bit like gift-giving: the packaging also matters. Even the best of ideas won’t go far unless they’re presented in the right way. Present the idea for your project or company as an exciting story. That also involves briefly introducing yourself. Who are you? How did you come up with your idea? What added value does your project offer? Why do you want to implement it? Also important: what are the specific details of your planning? The more information you provide potential investors with, the greater the chance of winning them over and encouraging them to make a contribution.
- Also think carefully about how you tell your story. After all, visual impact is very important. Many platforms provide the option of incorporating images and videos into your crowdfunding campaign. Making extensive use of such media is well advised.
- Don’t forget to thank your investors. And not with a standard thank-you card. Instead, take a bit of time to come up with a surprising and appealing way of expressing your gratitude. For example, send samples of your product or a gift that’s related to it.
Swiss people enjoy success with crowdfunding
Crowdfunding can be an attractive alternative to traditional financing to raise capital for an idea. It’s not just the concept, but also the presentation of the project that’ll decide whether the initiative is a success or failure. Crowdfunding has proven extremely successful in Switzerland. Around 60% of people organizing campaigns achieve their fundraising goals on the two Swiss websites Wemakeit.ch and 100-Days.ch.