Crowdfunding

If you want to finance your initiative or project, there are several options available. For example, you might be able to apply for a grant or fund, you can try to secure sponsorship, and you can generate revenue from your audience. There are several ways to do the latter. One option that has been popular for a number of years—and has become increasingly easier with the advent of the internet—is crowdfunding.

What is crowdfunding?

Crowdfunding is also known as “public financing.” The idea is that you present your project to “the crowd” (often through a crowdfunding platform). Individual investors can then fund a portion of the project in exchange for a reward, which they pay immediately or once you’ve secured 100% of the required amount. Before you start crowdfunding, it’s important to keep two things in mind:

1 - In most cases, it requires a significant investment of time.

You’ll need to come up with a good pitch and, for example, create a fun “video” to present your project. It also takes time to thank backers, and you’ll need to keep (potential) backers informed about your project’s progress. Throughout the fundraising period, it’s a good idea to keep coming up with new ways to encourage your donors to become ambassadors for you. That way, you can create a snowball effect where your small circle of friends and acquaintances helps you reach a large group of people who also want to contribute.

2 - Think of crowdfunding as a marketing tool

Crowdfunding—as strange as it may sound—isn’t actually a way to raise money, but a way to sell your product. So it’s a marketing tool and also a great way and opportunity to build a loyal following. Just like with traditional marketing, you need to know who your target audiences are and have a plan for how to reach them. Ideally, you don’t want donations to come only from, say, your grandmother or your neighbors. Developing a good campaign takes time (and expertise).

How does crowdfunding work?

Step 1

When financing the initiative or project, you decide what portion you want to raise through crowdfunding, in addition to other forms of financing (if any).

Step 2

Next, consider what rewards you can offer. Keep in mind that people’s wallets aren’t always very full. Crowdfunding can involve borrowing money, with the person helping you offering a good interest rate. However, it’s more fun and eye-catching when you also offer creative rewards. On most crowdfunding platforms, you can offer multiple rewards, varying in price. These could include, for example, a ticket or a copy of the book. For a slightly higher contribution, the ticket might be delivered in a deluxe box, or the book might include a personal note from the author. Other possibilities include a dinner with the cast, a role in the film you’re making, or VIP treatment at your event. The possibilities are endless. You can also ask for a contribution without offering anything in return. There are always people who know how hard you’re working and who simply want to support you.

Step 3

Set up your crowdfunding campaign using one of the many platforms that are now available. That’s simply the easiest way. You can also choose to do it yourself through your own website or social media.

Step 4

Promote your crowdfunding campaign, because otherwise no one will know about it, and you’ll be less likely to succeed. It’s a good idea to let a few people in your circle know about it before you even launch the campaign online. If they pledge an amount in the first few days (not all at once), it’ll be easier for others to follow their example. You can do this through your social media or by reaching out to partners and colleagues. In some cases, your initiative or project—or a reward you’re offering—might be so successful that it even makes the news. So be sure to send out a press release if you think there’s a chance of that happening. Also, keep sharing updates—not only for those who’ve already pledged but also for potential new donors.

Crowdfunding platforms

There are quite a few websites and platforms online that can help you launch a crowdfunding campaign. Both internationally and in the Netherlands, these platforms have come a long way in their development. They make it very easy for you to set up a crowdfunding campaign. Often, they already have an existing following to whom they promote initiatives or projects. This can help you reach new target audiences. In general, these platforms charge a fee in the form of a percentage and/or a fixed amount. This varies by platform. They also collect the funds from contributors. They often disburse the funds once 100% of the goal is reached and refund the money if the goal isn’t met, though this can also vary by platform. We’ve listed some of the best-known crowdfunding platforms for you, so you can easily compare them.

If, from your expertise, you yourself have knowledge that would fit this topic, or if you see opportunities to improve this text, we look forward to receiving your message at info@cultuuracademy.nl.