The Definitive Guide to Crowdfunding: How-to's and Examples

The Definitive Guide to Crowdfunding: How-to's and Examples

From Stylo Butt

Got a great business idea but don’t know where to start? This guide will walk you through all the steps you have to make.

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Many entrepreneurs of the past didn’t have the luxury of asking perfect strangers to fund their projects. It was either their own hard earned cash or the money of the people they knew.

With the advent of the Internet, you have this option. In fact, crowdfunding has gotten so big over the recent years that competition for public funding is huge.

This definitive guide will walk you through the stages of a successful project - from its beginning and up to the very end.

Why Use Crowdfunding?

While public funded charity efforts are nothing new now, it was quite a rarity back in the old days. It stayed like that for millennia. So, why did we come up with this way of collecting funds?

Crowdfunding provides the backer and the seller with a number of benefits. Thanks to it, the backer gets early access to a new product. That can be something that was never tried before or something totally unique.

The team behind the product gets access to significant funding in the early stages of the project. But that’s not the main thing that attracts inventors on Kickstarter and Indiegogo.

You can’t just offer a product based solely on an idea - it’ll take investing a lot of time and money. So, the price of a startup is not exactly close to zero.

Crowdfunding shows entrepreneurs whether their product is wanted. And that’s what makes this method of raising money unique. No focus group or market research can compete with real user interaction in terms of determining whether a product will catch on or not.

So, by starting a crowdfunding campaign, you don’t just save a lot of money. You understand whether people like your product enough to risk their money to get it. You can validate ideas.

If that’s something you’re interested in, here’s how to do it.

Work on the Project

If you’ve just had an amazing idea that may make it to Kickstarter, you have a long way ahead of you. It’s not just about planning a campaign, though. It’s about vetting and developing an idea into a project.

Your business idea can be fascinating to you, but you have to be honest with yourself. Once the initial excitement subsides, you should start looking up similar startups.

More often than not, even the brightest ideas are not unique. You may either face direct competitors or compete with similar products. Does this mean you have to give up?

As a last mile solution, hoverboards were up against stiff competition from skates and scooters, but they took off. Your company can, too.

Not even the best companies can have it all. Even Amazon only has half of the ecommerce market. This means there’s room for more companies to challenge the status quo.

Your product may have a better design, superior performance, or appeal to a small niche. Whatever the benefit that makes your product better than others is, you have to figure it out early. If it doesn’t exist yet, it’s about time you created it.

No man can do this sort of thing on their own. While it is tempting to think you can pull it off, a wise leader always needs a great team to flourish.

At the very minimum, you need people who are expert at these things.

  • Crowdfunding

  • The niche you’re entering

  • Finance

  • Marketing

You can be one of those people. If your project is art, software, or anything else that a team of people can create, you have to be even more careful when hiring.

You have to take on people who are as passionate about what you’re doing as you are. The kind of people who don’t back down when they face difficulties. Or you have to be ready to compensate them for their time.

Most crowdfunding projects end up with a product rather than a service. If it’s a hip desk lamp, you need a company to make those. If it’s a comic book, you need someone to print them.

What this means is that unless you are working on a software project, or own a manufacturing facility, you should think about this aspect of the business before you start.

Many crowdfunded projects ended up failing to deliver because of the problem with manufacturing. CST-01 gathered a $1 million but went bankrupt because the technology they were hoping would work failed.

If you don’t want to become one of those businesses, you should prepare early on. Put in your own time and money to see what works and what doesn’t.

Not all ideas are destined to make it to Kickstarter. If the idea you came up with is not unique, if you don’t have the right people to work with, and if you have no clue how to make it work, you should probably scrap it.

Don’t treat your ideas too well. Otherwise, you can lead yourself to a failure you could have avoided.

If your idea is well developed, you have a team, a prototype, and only lack funds to start, you should consider choosing a crowd marketing platform.

Choose the Platform

There are dozens of crowd marketing platforms out there. You’d be better off using some of the best. There’s nothing wrong with less known platforms, but the more people know about it, the better.

These top four platforms have what it takes to fund your project.

Kickstarter is one of those websites that is synonymous with crowdfunding. While there are a lot of categories for almost anything you can think of, there are two things that sell the most on Kickstarter.

The first thing is gadgets. Are you trying to sell a pair of wireless earbuds or a cool looking backpack for tech? Kickstarter is your best choice.

The other thing that sells well here is art. Stories, comic books, movies, video games – all these projects belong to Kickstarter. However, comic books do slightly better than movies.


You’ll have to pay a 5% fee on the funds and won’t take anything if the campaign fails.

Indiegogo has a lot more to offer than Kickstarter. However, if you look at the staff picks, it’s hard to find a single entry that isn’t about tech.

That said, if your project is not about technology or art, you’d be better off with Indiegogo. That’s especially useful if you only need to raise a small amount of money. You can keep what you get and work with that.

If these two websites are best for funding tech startups, Go Fund Me is a great place for charity. This is what an average charity page on Indiegogo looks like.


Here’s what Go Fund Me looks like.


If you want to raise money for a humanitarian cause, this is the place to go.

What if you don’t have the next technological breakthrough in mind? What if your idea was to start a small company where college students come to ask “Please, edit my paper for me?”

You still have an option. Head straight to Fundable, and you may be funded by one or many backers. You’ll have to compose an excellent business plan to sell your project, however.

Build a Community

Now that you’ve chosen a platform, it’s time to start promoting your project. It would be best if you started out long before you launch the actual campaign.

The best way to start small is by building a community around the product you’re selling. Talk to influencers on Twitter about some problems your product solves. Get your idea out there and talk to people who like it. If you’re making an art project, gather a focus group to discuss the key points.

In other words, make sure there are some people who are hyped about your crowdfunding campaign before it goes online.

Present Your Project

Presentation is what sells the product. If it’s great and you fail to tell people about it, you’ll end up with no backers. Here’s what you should focus on.

Most people don’t have much time to read about your project. A detailed and lengthy description is crucial, but a short explanation trumps it by a wide margin.

Try to describe your project in one sentence. Don’t make it too fancy to the point where it’s so bland you could say it about anything. Anything too specific would be too long to fit into one sentence.

Take a look at how Light Phone manages this.


It’s definitely not all there is to their phone, but the most essential things are present. It also makes you wonder what it is and read on.

Because of the lack of time, most people won’t read the description of your project. They will scroll through the page and look at the photos. Some will watch your video.

This is why investing in great imagery is the key to the success of any crowdfunding campaign.

This means great typography like in this campaign.


This also means great photos like in this project:


The main perk of most campaigns is having early access to a product. In some cases, it’s about having the only chance to get it.

Make sure to plan and price your perks well, and make them appealing. For art projects consider offering something unique for large donations. This can be a signed version of the product or artwork the backer requests.

Offering discounts on more products is always a great strategy.

Stretch goals is what keeps people investing in your project well after you’ve raised the sum you’ve originally planned for. Include the nice little things that would make the project better but are not essential to your product.

For instance, here’s what a tabletop game on Kickstarter adds to their stretch goals. These are nice to have but experiencing the game is possible without them.


Your project is a business, after all. Make sure to describe the legal risks your backers will face, provide them with the timeline of your project, and let them know how their funds will be used. Very few people will invest in you if you don’t do that.

If you want your backers to believe you, you shouldn’t make your predictions too optimistic. Go for a moderate estimate instead.

It would be best if your timeline showed that you’ve done a lot of work before and this campaign is just the last step.


Promote the Project

Now comes the hardest part. If your project didn’t get noticed by the staff or didn’t gain a huge following overnight, you’ll have to work really hard to promote it.

Offer your project to influencers who might like it. If you’re selling cosmetics, try enlisting the help of a famous Instagram beautician. If you’re making an indie game, you should consider spreading the word about it via some geeky YouTube channel.

If you can get someone famous to promote your project, you’re even better off. Surge 3D got the founding member of N.W.A. to pose with their headphones, and that increased the number of backers big time.


Posing in Facebook groups and commenting on Reddit are also great ways to promote your product if you’re not extra salesy.

Take Care of a Business Side

You shouldn’t stop and relax after you’ve reached your goal. This is one of the most challenging parts of the whole endeavor so far.

You now have to seamlessly execute all the things you’ve promised and deliver the perks to your backers.


Once all your backers are satisfied, you can consider expanding your project. Use the revenue you received from your successful campaign to boost your sales, ask for private investment, or create another product and another crowdfunding campaign to establish yourself as a company.

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