How do you figure out what your funding goal should be?
Crowdfunding costs money, and most crowdfunding campaigns that launch will fail. Figuring out a funding goal and how you much need to raise can help your campaign to not to fail.
While there are a number of reasons why crowdfunding campaigns fail – from category fatigue to not investing in marketing – sometimes there are simpler reasons; like not setting the right funding goal for your idea.
Many campaign runners think the goal they need to raise should be the expected total amount for their product. But it can also be something totally different.
Finding a Minimum Viable Funding Goal
While there is a real desire to set your funding goal as the real dollar value you need to scale your business to market, it may be better to go for a smaller goal to better influence the mentality of crowdfunding backers. Afterall, they are the ones who will launch you to market successfully.
As an example, you maybe launching a photography kit with a total budget for the first batch of production being $35,000.
You have $10,000 as the initial capital you raised in your efforts before you launch your campaign (investors, sponsors, family and friends), so you’d think you’d only need an additional $25,000 through crowdfunding.
However, if your real goal is to produce and penetrate the market with your product and brand, your may have a different goal, perhaps ranging up to $50,000
In this case, your minimum viable funding goal is $35,000, even if you actually need $50,000 to achieve your long term plans.
Backers Support Winners
Backers want to ensure they are supporting a winning product. They want to know their choice is the right one. They will back a project which is close to reaching its goal or has already surpassed it over a project which is barely close to reaching its goal.
People enjoy supporting things which are trendy and popular. This means a smaller funding goal is easier to reach and fund than a larger one, reaching that point of successfully funded.
Once your initial amount is funded, you will have an easier time drawing in new backers, because they will see a product which is already successful and will want to jump on the train before it reaches the market.
Long Term Goals Vs. Minimum Viable Goals
While your real goal maybe to raise $50,000 for any crowdfunding platform your set goal should be the minimum viable goal.
A lower goal is a way easier target to reach. And most campaigns hit their stride and raise more capital AFTER their initial goals are met.
This doesn’t mean you should lie to your backers about your goals, but you should aim to be transparent about your real goal and your crowdfunding goals.
An easy way to do this is with a stretch goal chart. It is a way to inform backers how you plan to spend any extra funds you raise above your funding goal. This is a way to create a project which will raise your minimum goal as well as a create a pathway towards your real goal.
You can find more crowdfunding tips, deals on the best crowdfunding campaigns, and more at BackerLand.