How to Prepare Your NZ Startup for Crowdsourced Funding

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Table of Contents

• Understanding Crowdsourced Funding Platforms
• Create a Compelling Story
• Set Realistic Funding Goals
• Build a Strong Online Presence
• Develop a Comprehensive Marketing Strategy
• Offer an Incentive
• Build a Network of Supporters
• Create a Detailed Project Plan
• Key Takeaways
• Frequently Asked Questions

Crowdsourced funding has emerged as a popular financing option for startups worldwide in their early stages, including in NZ. Commonly referred to as crowdfunding, this innovative approach allows entrepreneurs to raise capital from many individuals willing to contribute financially to their startup. However, preparing for a successful crowdsourced funding campaign requires careful planning and execution. This article will take you through the key steps you need to take to prepare your New Zealand startup for crowdsourced funding.

Understanding Crowdsourced Funding Platforms

It is essential that business owners first familiarise themselves with the various crowdsourced funding platforms available in New Zealand. This includes researching popular platforms such as PledgeMe, Snowball Effect and Kickstarter to understand their specific requirements, features, and success stories. In addition, you should consider the suitability of these platforms as it relates to your startup’s goals and industry. 

Create a Compelling Story

One of the most critical aspects of a successful crowdsourced funding campaign is telling a compelling story that resonates with your target audience. You should start by clearly defining your startup’s mission and the problem your product or service aims to solve. This will ensure that you can successfully highlight your startup venture’s unique value and separate it from established businesses. You should also try to connect with potential investors through this story.

Set Realistic Funding Goals

Setting realistic funding goals is critical to the success of your crowdsourced funding campaign. You should determine the amount of capital required to achieve significant milestones and drive your startup forward. You must strike a balance between ambitious targets and attainable goals. This is because setting your funding goal too high may discourage potential backers. On the other hand, setting your goals too low could undermine your startup’s perceived value and potential.

Build a Strong Online Presence

Establishing a strong online presence is vital for building credibility and attracting potential backers to your crowdsourced funding campaign. This might include creating a professional website that showcases your startup’s story, product or service details and any media attention you have received. In addition, you should utilise platforms like LinkedIn to interact with your target audience, share updates about your campaign and build a community around your venture.

Develop a Comprehensive Marketing Strategy

A well-planned marketing strategy is critical for driving traffic to your crowdsourced funding campaign. This requires you to identify your target audience and tailor your campaigns accordingly. You should consider utilising various marketing platforms to interact with your audience, including:

• email marketing;
• social media; and 
• search engine optimisation. 

Offer an Incentive

Offering an incentive or reward is another way to draw potential investors to your crowdsourced funding campaign. You may wish to offer exclusive discounts, merchandise or access to products of events to entice donations. You might wish to offer such an incentive in tiers, providing more benefits where the contribution is higher. It is important to ensure that these rewards are unique to you and align with your startup’s mission. 

Build a Network of Supporters

You should aim to build a network of supporters and potential backers well in advance of launching your crowdsourced funding campaign. This will require you to:

• attend industry events;
• join entrepreneurship networks; and 
• engage with potential partners or customers.

By cultivating a network of supporters, you can gain valuable insights and increase your campaign reach. This will ultimately increase the chances of meeting your funding goals.

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Create a Detailed Project Plan

It is important to remember that there is a detailed business plan behind every successful crowdsourced funding campaign. A well-structured project plan ensures that you stay organised and on track throughout the process. To develop your own project plan, you must:

• outline the timeline for your campaign, including the launch date, duration, and specific milestones;
• identify the key tasks, responsibilities and resources required to execute your plan effectively; and
• set clear objectives for each phase of your campaign, including your pre-launch, launch and post-campaign activities.

Key Takeaways

Preparing your New Zealand startup for crowdsourced funding requires careful planning and execution. The best way to prepare for your crowdsourced funding campaign is to:

• understand crowdsourced funding platforms;
• create a compelling story;
• set realistic funding goals;
• build a strong online presence;
• develop a comprehensive marketing strategy;
• offer an incentive;
• build a network of supporters; and
• create a detailed project plan.

If you are seeking investment and need assistance preparing for your New Zealand startup’s crowdsourced funding campaign, you can contact our experienced business lawyers to assist as part of our LegalVision membership. You will have unlimited access to lawyers who can answer your questions and draft and review your documents for a low monthly fee. Call us today at 0800 005 570 or visit our membership page. 

Frequently Asked Questions