I’m embedding this presentation I gave a few months ago at Sam Ash in New York City. It’s available on Slideshare too!
Don’t Bet Against Yourself
I had lunch with a friend yesterday and we were discussing marketing strategies and tactics. I told him about a strategy that I wanted to pursue that involved approaching a much bigger company to potentially partner. I said “I’ve always wanted to talk to them but I know they won’t have time for me.” My friend shot right back, “Don’t bet against yourself! You’ll never know if they’ll work with you until you approach them and the worst thing that will happen is they’ll say ‘no’.” This was great advice and I’m planning on setting up a call with the potential partner today.
The same advice can apply to crowdfunding. Don’t bet against yourself by thinking you’ll never hit your target goal so why bother. You’ll never know until you try. On TuneFund you keep what you raise so the worst thing that would happen is you don’t hit your goal but you raise some funds you can apply towards your project and you learned a lot about crowdfunding and will be more successful the next time you try.
The “U” Curve of a Typical Crowdfunding Campaign
Campaigns typically have a big spike at the beginning then dip down as time goes on. There is typically another big spike at the end of the campaign as the campaign owner cranks up the marketing to close the campaign.
Avoid the dip with regular updates on your campaign page and social media. Constantly work your network! Send reminders on a regular frequency to your friends and family to post to their networks on your behalf.
Conquer the Fear of Asking for Money!
Most people are predisposed to hating to ask for a handout. Shame, embarrassment, ego – these are all forces working against us when we launch a fund raising campaign because that moment will come when you send the first email to your network announcing your campaign and you’ll have to go for the close and ask for the money. Don’t get hung up in the clutch. Here are some tips to get you over the fear of asking for money:
- Don’t be shy!
- Accept that you are asking people close to you for focused financial assistance (for your career) and be comfortable with it.
- “This is business. Not personal.”
- This effort is for a predetermined amount of time e.g. the length of your campaign. Don’t freak out.
4 Key Steps to Creating a Successful Crowdfunding Video
“Success rates of projects without a video are much lower than those with. Video is the best opportunity to make an emotional connection with potential backers.”
– Yancey Strickler, Kickstarter Co-Founder
Key concept: “Emotional Connection”. Video allows you to make that connection and is the most powerful fundraising tool at your disposal. Here are 4 things to keep in mind when shooting your video…
- Don’t sweat production values, a basic point-and-shoot digital camera (or iPhone camera!) then edited in iMovie is how most pitch videos are made.
- Make it creative, fun and most of all entertaining!
- Keep it short – 3 minutes MAX!
- Describe your band and/or music, your project, how much you need to raise and how the money will be used. Be transparent.
Crowdfunding Campaign Update Schedule
Once you launch your campaign you have to be diligent about updating it regularly. Its good to create a schedule for updates, like an editorial calendar, ahead of time. If possible you should divide the labor too so no one person gets burned out. Also be sure to update everything – campaign page, facebook, twitter, tumblr, youtube, myspace, etc. Be sure to do regular email blasts as well with progress updates and be sure to do a launch, mid-point and final days email blast to goose contributors.
17 Crowdfunding Reward Ideas
Crowdfunding rewards are limited only by your imagination and your budget. Below are several simple tried and true ideas from successful crowdfunding musicians. If you have any other ideas please share in the comments!
- Pre-release CD or download
- Signed CD (DVD, etc.)
- Signed promotional still
- Show tickets
- Handwritten lyric sheets
- Email / Phone interview
- Skype conversation / concert
- Mix tape
- Custom song or cover song request
- Signed instrument
- “One of a kind” gift (clothes, art, etc.)
- Backstage visit
- House concert
- Cameo in video
- Credit (Executive Producer, etc.)
- Music lessons
- Dinner or drinks with the band
Are Crowdfunding Campaigns Taxable?
Funds raised with crowdfunding are typically considered income and are not tax deductible unless you have 501(c)(3) status. Be sure to speak to your accountant to determine the best way to handle the funds raised for that tax year.
How Do I Create Crowdfunding Rewards?
The most common question we’re asked by musicians raising money on TuneFund is How do I create rewards for my contributors? Below is a simple guide that will help you get started creating rewards for your campaign. The most important thing to remember is be creative and have fun. Easier said than done for some but well worth the effort!
- Have a wide range of contribution levels within these parameters: small ($20 – $100) • medium ($150 – $500) • large ($600 – $1000) • over $1000
- 80 / 20 rule: 80% of your contributions will be in the
- < $25 – $50 range while 20% will be big contributions
- Every contribution is matched with a reward that should be commensurate in value with the contribution e.g. a reward for a contribution of $50 is a tee shirt that cost you $12 to make
- Rewards should provide the contributor with a sense of inclusion or shared experience – it’s why they’re funding you!
- Study your network to determine the overall “wealth curve” and set contribution levels accordingly
- Have FUN creating your rewards
How to Set a Crowdfunding Goal
Musicians are discovering what a an excellent career boost crowdfunding provides are flocking to crowdfunding sites to launch a campaign. However many musicians fail, at least initially, to consider why they are raising e.g. what is the project and how much do they need to raise e.g. how much does this project cost to complete.
Here are some important factors and steps to consider when creating a funding goal:
- Create a budget for your project
- Determine all costs involved. Get as granular as possible.
- Itemize in a spreadsheet (or whatever works).
- Add at least 10% contingency.
- Factor in the cost of rewards e.g. tee shirts, publicity stills, Dinners with the band, etc
- Factor in the crowdfunding site’s fee and the credit card processing fee.
If you follow these simple steps you’ll be able to quickly determine the goal for your crowdfunding campaign.