A book that clearly defines what should be done, and what should not be done, when running a crowdfunding campaign.
Entrepreneurs find the American TV program Shark Tank very popular, yet many will never face the scrutiny of Barbara Cochran, Daymond John, or Mark Cuban. Instead, they’ll face a larger and potentially tougher audience – the general public who support crowdsourcing new ventures.
Moreover, crowdsourcing can be fraught with problems when milestones are not completed. In fact, the Washington State Attorney General recently filed a consumer protection lawsuit on a crowdfunding scam, the first such filing on a crowdfunding campaign in the United States.
To be a truly worthwhile success, consider the words of Sally Outlaw (@soutlaw), author of the book Cash From The Crowd: How to Crowdfund Your Ideas and Gain Fans for Your Success. A serial entrepreneur, she is the Founder of Peerbackers and Crowdfunding Academy. She has crafted a solid book meant to address the new way of business financing.
The Truth Behind The Cash Raised
If you suspect there’s more to a successful crowdfunding campaign than setting up a video online, this book will answer those hunches and then some. The nuances that can arise with a crowdfunding campaign launch are covered with thoughtful detail.
Outlaw has done some interesting homework, too. Did you know publisher Joseph Pulitzer used crowdfunding to complete the pedestal of the Statue of Liberty?
Outlaw notes this and other instances to assure readers that crowdfunding, while more technological today due to the Internet, has business fundamentals that should be heeded to be successful. If you’ve read recent posts regarding actor Lavar Burton raising $1 million in less than a day to restart his “Reading Rainbow“ show, you’ll find this note in the introduction sobering:
“Out of the 100,000 plus projects posted on Kickstarter, less than 50 as of this writing have hit $1,000,000 or more. The average raised throughout the entire platform – Kickstarter included – is just over $7,000.”
Cash From The Crowd frames what should be done – and what to avoid. Chapter 2 explains the various platforms available, and also includes a comparison chart. There’s also a great media checklist, an innovative suggestion on how 3D printing can aid a campaign, and a crowdfunding tool kit that appears at the end of the book.
Moreover, Outlaw’s experience shines through as she instruct readers on determining if crowdfunding is a good fit. Here’s a quote that helps fundraisers think more critically of the investor audience they are courting:
“…while communicating with them may be your priority, rarely are you one of theirs…whether you raise the funds you need is completely dependent on you. How creatively you pitch, how persistently you promote, and how hard you work to devise valuable and compelling rewards for your campaign.”
The perspective Outlaw brings leads to great lessons in running a business beyond the ask. I was especially pleased with the chapter segments Keeping Your Backers Happy and Equity Offers. Each offers insights meant to support a relationship lasting longer than the day a campaign is fully funded. When Outlaw outlines the JOBS act, for example, she gives some great detail that can help you weigh your capability against the framework for equity funding. Here a sample:
“The good news is entrepreneurs will be allowed to sell up to $1 million in securities through this new crowdfunding method. The bad news is there are numerous requirements, restrictions, and liabilities….an issuer – the entrepreneur offering the securities – including its officers, directors, or partners, can be liable for any material misstatements or omissions.”
Who Would Benefit Most From This Book
Clearly entrepreneurs with an idea and a dream are the beneficiaries, but so are marketers who have to develop a sound marketing strategy to bring awareness to a campaign. I also found the tips helpful for those who are interested in unique projects that have traditionally been difficult to fund, such as artists and specialty science projects.
For funding a business, you may want to compare this with other inspired finance books, such as The Crowdfunding Revolution, which focuses more on VC-backed resources and Locavesting, which takes a look at community resources that may also be available to you. Vet all to see what avenue makes sense for your plans.
But for the best in crowdsourcing campaigns, read Cash From The Crowd for a winning hand in making your crowdfunding effort a true success.