Business crowdfunding is probably as close to an act of mass altruism as we will get in this age.
Although it is essentially a business transaction, crowdfunding creates a way that people can offer a creative entrepreneur a realistic chance of success – and in turn, creative vision can come to life for those people who want and appreciate it.
Many emerging designers are turning to business crowdfunding – a great post-recession fundraiser – to create a product that they love and know their target consumers will also love, and buy.
One can directly gauge the interest that a specific community has in a product and furthermore seek the validation required, and with many crowdfunding platforms you retain the ownership of your product.
Crowdfunding can also be the ultimate referee and garnish for a CV and portfolio, if sales figures and information on the demographics of the consumer audience are included. It can also be the part-time job that partially finances your fashion business.
It’s a hard task to encourage people to part with their cash – and give it to someone they may never have heard of. Here are some tips for your success.
Use the Right Business Crowdfunding Platform
Before the Label and Luevo are examples of fashion-based business crowdfunding platforms with a mission to serve the fashion industry. Make sure that you are on the correct platform for your product. Research, in-depth knowledge of your product, and knowing where you want your business to head, will direct you to where you should be.
Kickstarter is very well known and is exclusively directed at creatives. Since their launch in 2009, 7.8m people have pledged $2bn to 77,000 projects. Of that, $51m was pledged to fashion, and 2,437 were successfully funded fashion projects.
Read our tips for successfully launching a Kickstarter business crowdfunding campaign here.
You should also look into what kind of funding the platform provides: either ‘all or nothing’ or ‘keep it all.’ Examine the benefits of both and apply to your current and expected needs. For example, with ‘all or nothing’ funding, you will not have the responsibility to produce something if the full amount of funding required is not raised.
Be Persuasive, Not Pushy
Translate the passion behind your career choice into your delivery of why people should help you achieve your dream and expose your talent. Money is of huge value to people and so they only spend it when they really want to, or really need to. Make them want to need your designs.
Using business crowdfunding sites is largely about persuading people that your idea or product is worthy. You need to tell your story in such a way that people want a piece of your brand as much as the product. Think of the ‘please don’t fire me’ speeches from The Apprentice candidates, but with fewer tears, metaphors and analogies.
Will Your ‘Passion For Fashion’ Attract Funding?
Be honest, creative and proud. Honesty will go a long way with funders and they will feel like they are ‘in’ on everything. Think about the language that you use, be positive and weave in the buzzwords that will sell your particular product: handmade, the material(s) used, ethical, just for example.
People love to feel good and be excited, so make them feel this way about your product in a way that they can’t when they make a banal transaction in the mass fashion market.
A good idea is to ‘advertise’ your story via video, and it can have a great impact if you give it a personal edge. Face-to-face communication is so important, especially in business, and your video will allow the audience to bond with you. Tell them about everything that you’ve done to lead you to this platform, and why your product is so worthy.
The video is an advertisement of yourself and what you want to do, so be thorough about timelines, budget/costs and potential risks and challenges. Make the video your e-business plan and proposal. Most of all, show your genuine passion – if it has been the catalyst for your journey, it will be the catalyst to get people backing you.
A good example of a fashion brand that got funding through using a good story is that of Harry Keen of the FOXA branded sweatshirt.
Don’t forget that the responsibility lies with you as a designer, for your product to succeed.
Use social media to create a dialogue with your target audience and to spread the word about what you’re doing and the platform that you are using. The more people that know about it, the better. Remember the keyword in ‘crowdfunding’ is crowd!
It’s also a good idea to think beyond one project, as if that one goes well, it could lead to a boom for your fashion business. So, if your ‘reward’ for funders is in the form of the product that you’ve designed, ensure it can go on to ‘sell itself’ to anyone that sees it.
Have Enough Cash
Money is a tough and touchy subject, we know. But it is even harder when you realise too late that you are in financial difficulty, so make sure that you’ve thought about all the costs involved in your project before you start your business crowdfunding campaign.
Evaluate the different components that go into making your product and account for them. Don’t forget to factor in any fees that the platform charges, delivery costs, and any taxes that you’ll be responsible for.