Crowdfunding is quickly becoming a permanent part of the world’s financial ecosystem, and an increasing number of people are welcoming crowdfunding as an alternative to traditional funding.
Crowdfunding has seen a particular surge of female-led companies and woman are standing out for their successes. As an illustration, 47% of campaigns on Indiegogo that reach their funding goals are run by woman, this number is nearly 4 times higher than the number of female-owned businesses that receive venture capital.
A recent study by UC Berkeley Haas School of Business demonstrates that woman are outperforming men in online fundraising campaigns, mostly due to the language they use. According to the study, woman are better at telling a story that resonates with potential crowdfunding investors.
The paper, “The Narrative Advantage: Gender and the Language of Crowdfunding,” authored by Laura Nelson of Northwestern University’s Kellogg School of Management, highlights the fact crowdfunding pitches rely heavily on the written word in opposition to other types of business pitches.
According to the study, woman do a better job at online fundraising partly because there are less focused on business language, money and finance. Overall, woman express more emotion and write more about their personal stories, a style that is more successful than typical male writing at persuading online readers to fund their projects.
If you are a female entrepreneur looking to start a crowdfunding campaign, here are few tips to help build a really strong and successful campaign:
- Research – research and look at successful and non-successful campaigns to get insights for what has worked and what hasn’t, to help you avoid mistakes made by less successful campaigns. The more prepared you are, the more likely it is that you will have a successful campaign.
- Timing – the campaign needs to be planned from day one, the more detailed the plan the more likely it is for your campaign to succeed. For instance, campaigns should start at the beginning of the week and end on a workday, instead of a Saturday.
- Create a great and compelling story – your pitch needs to answer any question or concern a potential backer might have, that would keep them from supporting your cause. The more you open and the clearly you explain your objectives – from FAQs to stretch goals – the better the audience can visualize where their money will go, which builds trust.
- Carefully select the language you use in your pitch - according to the above research, language plays a key role in a campaign’s success; backers are more likely to support your campaign if you express positive emotions, vividness and inclusiveness. Use a personal approach and engage readers with your story, avoiding business language, and remember that the copy should be concise and easily digestible.
- Get your video right – the most successful videos run 2-3 minutes in length and work first and foremost by catching your attention. Save most of the technical talk for your copy. From our experience at Indiegogo, campaigns that have a video raise on average 370% more than campaigns without. Keep it to less than 3 minutes and focus on the WHY - people fund people not projects.
- Perks – campaigns that offer perks raise 143% more money than those that don’t – they have the power to make or break a campaign more than you’d think. Perks are products or offerings in return for donations, and the most common advice from experienced campaigners is to make sure your perks strategy is airtight. The many variables at play (fulfilment, shipping, and feasibility) are almost certainly more complex than they first appear.For example, a campaign page can feature up to 20 perks at a time, though if campaigners offer too many that differ in cost and description only slightly, they may confuse a potential funder to the point that they decide not giving money is the easiest option. You want your campaign to be as easy to support as possible.
If you are a budding female entrepreneur planning to go through the crowdfunding route like I did in the past, just follow my tips and advice and you are set for success.The real beauty of crowdfunding is that you can go from having an idea in the morning to raising funds from complete strangers around the globe that afternoon, provided your pitch is compelling enough.
Crowdfunding removes bias from the funding equation by creating an equal opportunity platform where all ideas are welcome, and where all ideas succeed based on their merit and market. By putting the power back into the hands of the people to decide which ideas should come to life by voting with their pounds. There are no reasons to be scared, just go for it.
By Kelly Angood, UK Design, Technology and Hardware Manager at Indiegogo