One of the great advantages of being an activist entrepreneur is that you have many more options to raise money and promote your cause.
“But I don’t have any money to start a business!”
The idea of having to raise capital to fund a new venture can be a daunting prospect for anyone! The task can seem even more overwhelming when you’re not seeking support for a ‘traditional’ business venture.
Economics dictate that finding investors willing to put their money into a business that generates financial returns is a sure thing. But, how do you find those willing to provide financial support to a venture that has a primary goal of promoting social change rather than simply securing profit?
Thankfully there has Never been a better time to be a facing such a challenge.
As a social entrepreneur you already have a propensity to embrace new ideas, and to look for creative solutions to today’s often complex multi faceted problems. Your attempt to secure the capital to get your venture launched should be approached in the same way.
As Banks and Traditional lenders may be unwilling to provide start up capital for non traditional enterprises, seek alternate sources.
While Traditional Lenders have never the only game in town, in recent years it is Crowdfunding websites have completely changed the playing field for today’s entrepreneurs.
These websites offer previously unheard of opportunities that are explored further below.
What is Crowdfunding?
Historically, setting up a business involved asking a few well placed people for big sums of money. Which often also involved turning over a stake in the business in return for their capital investment.
Crowdfunding is turning this idea on its head!
By using the internet Crowdfunding websites can provide YOU a platform to talk to thousands – if not millions – of potential sponsors / investors that each contribute a small amount. And this is done without expectation of a financial return or any stake in the venture once launched.
Instead their reward comes purely from a sense of altruism when a project comes to fruition.
These are people that through their personal economic decision making (spending) are consciously trying to support positive change!
Kickstarter / Go Fund me / You Care all offer a previously unheard of platform for connecting with these ‘ethical investors / Social Sponsors’.
Equally they allow the same individuals to proactively seek out causes which resonate with them and to provide their support by way of financial contributors.
How does it work?
The premise is quite simple! Research the various crowd funding websites available and choose which would be best for pitching your idea. Then sign up!
Its as easy as that to get going. And the cost is free!
While crowdfunding platforms offer a viable means by which to raise capital you will still need to have determined what your requirements are ahead of time.
1. Share your story.
Let potential sponsors know who you are and the social goals you are looking to achieve with their support.
Remember activism is a form of fundraising like no other. You are not pitching to a bank or a traditional investor here. Instead you are sharing your idea for improving the world.
Your story while being well ordered and articulated does not have to close with the promise of a return on an investment or repayment of a loan.
This is your opportunity to reach out to people and to present your vision of a better world, one that they can play an important part in creating!
Do not state the amount of money you hope to raise at the outset. While you will want to clearly state your fundraising goal it should be at the close of your pitch.
Let your vision and your passion lead!
If your idea is strong, and your proposal realistic, people will want to support you and your cause whether your financial needs are large or small.
2. Set a Funding Goal.
You have put forth your story. Your vision and drive has captured the imagination of the masses!
It is time to state your funding goal. It is important to be realistic in setting your targets. It is also very import to be aware of differences between fundraising websites in terms of their funding models.
Kickstarter for example has an ‘all or nothing’ fund model. Simply put, if you achieve or exceed your target you receive the money that was pledged to your cause. However, fail to reach your target and you will receive nothing!
Other sites operate slightly different models. Some may allow you to receive anything pledged whether or not you hit your target. This again highlights the importance of researching fundraising website in detail to determine exactly which will be best for you!
3. Promote your campaign
As widely and as publicly as possible! Get the word out there!
Here are some simple tips to help you get started:
- Generate Interest – use social media and email to help people learn about your project.
- Turn Interest into backing – use the right content to turn interest into financial backing.
4. Update your backers as your project progresses.
You need to keep your project backers in the loop as you move forward with your campaign. If you don’t share regular updates with them, you could lose their interest and you may not be able to attract as many pledgers as you would like.
Equally by keeping backers informed they can become Ambassadors for your cause and may attract others to it!
Fortunately, crowdfunding platforms generally have built-in tools that allow you to update your project backers and send messages out to them. Take advantage of these tools and keep everyone in the loop.
Hype is unnecessary. Be honest and regular with your updates. If things aren’t going exactly as you hoped they would, be transparent. Backers want to know that you can actually deliver on your projects.
5. Fulfill your promise.
Crowdfunding campaigns aren’t over if and when you reach your funding goals. They’re over when the creator has fulfilled their promises. This means completing your project. This means delivering, and making sure that you’re communicating with supporters every step of the way.
Only when fulfillment is complete can you truly say that you had a successful crowdfunding campaign. Until then, there are still a lot of things up in the air, both for you and for your backers.