Most businesses know they need to raise funds and making the decision to fund your startup by crowdfunding is made after careful analysis. As you gear up for a Kickstarter (rewards based) or WeFunder (equity based), crowdfunding campaign and consider hiring a crowdfunding consultant, you might be wondering how to go about hiring one that is right for you? As you’re vetting crowdfunding strategists and crowdfunding marketing agencies, it’s important to ask the right questions. The right team will ask the right questions of you and help you reach decisions based on actual analysis and data.
Below are guidelines that you can follow to find the right team that you can trust to do everything possible to help you surpass your crowdfunding goal and successfully bring your startup/product to market.
What is their track record?
When evaluating a crowdfunding marketing consultants track record, consider three different aspects:
- How many projects have they done?
- Generally, the more projects the consultant or marketing agency has worked with, the better. Experience and types of projects they’ve worked with counts more if it is a niche marketing agency or consultant.
- What is their success rate?
- How many were successful out of all the projects they took on? Inquire about rewards based and equity fundraisers.
- How much have they raised?
- A consultant that has carved out a niche for themselves will have a different success rate and amount raised than others. If you are raising a million and they have never raised that, it might be worth considering someone who has done that before.
Remember, a specialized agency, or crowdfunding team can benefit your business more than one that looks good on paper but can’t help you long-term. For example: If you are raising money based on your monthly burn rate of 10,000 and are only 40,000, it might be the wrong amount for your business. A specialized team like ours at Idiya Consulting helps you build your pro forma (through our CFO services) to determine exactly what you should be raising.
Who is on the team?
Before you begin, make sure you know what types of crowdfunding marketing help you need. Knowing whether you need campaign management soups to nuts or just marketing and PR. Be an informed buyer! Use the free consultation most agencies and strategists offer o interview them on what they think your needs are and their willingness skill sets as they relate to your startup/project.
If you are interested in a full-service crowdfunding marketing team, you’ll want to make sure they have the following:
- Public Relations:Responsible for writing and circulating press releases, reaching out to journalists and securing media coverage. Some crowdfunding agencies have partnerships in place with pay to perform PR agencies that specialize in working with small businesses.
- Facebook and Google ads: Someone to write copy, create ads and manage your budget to generate leads and drive people to your page while achieving a high ROI.
- Social media and Email Marketing:This person will work with the Facebook ads person to manage all organic social media. Having a marketing strategist on board helps build and manage your crowd of backers.
- Copywriting: Someone to write copy for the crowdfunding page, in addition to any thought leadership content.
- Financial Services: If you using equity crowdfunding, you want to make sure the team can get the necessary documents together for you to be listed on an equity platform.
Note that in many cases, crowdfunding teams don’t need four different people to handle these tasks. A team of two can handle the tasks listed above. Your role as an informed buyer is to ensure those skill sets are present within the team you hire.
How much is this going to cost?
There is a plethora of combinations on how crowdfunding agencies and consultants charge fees. There is no right answer as you should choose what you can afford and are comfortable with, however, beware of the consultant that asks for 20% equity in your startup (that’s frowned upon and rather unethical).
Consider how much you want to raise, what your profit margins are, how much you’ll owe to the platform after the campaign is over and how much work you’ll receive in exchange for payment. A pro forma, knowing your burn rate and having a business plan will make your investor ready whether you do rewards, equity or traditional angel /VC fundraising.
There are no guarantees in crowdfunding. Read it again…no guarantees. If the services, price or guarantee they are offering seems too good to be true, listen to your mother and steer clear of them. At Idiya Consulting, we work with startups and small business so we offer flexible pricing based on your budget. We offer CFO services and put together financial documents and we have mutually beneficial transparency that allows everyone to understand the numbers involved in each campaign. We are bias, but no matter where you go, have your financials in order; data doesn’t lie.
Also, don’t be afraid to ask for references. Hiring someone to help with crowdfunding is an investment in your future, so verify their references, and make sure they are a good fit for your team/project.
If you’re gearing up for a crowdfunding campaign and need some help sorting through your options, contact us today, and don’t forget to subscribe to our newsletter.