The Scientific Approach to Crowdfunding, part 7/8: The Back Up Plan


Plan


Today, Symbid presents the seventh part of an 8-week online series on how to crowdfund your idea. What's so special? It's based on scientific research by Laurs, Leeuwen & Loggies from the Erasmus University of Rotterdam (The Netherlands).



Today we present part 7 (out of 8): "The Back Up Plan".


When the previous lessons have convinced you that crowdfunding is the way to go for your project and you eventually decide to launch your crowdfunding campaign, make sure you have evaluated several alternatives in terms of failure. Of course you start a crowdfunding campaign with the aim to become very successful, however, in the end it might not run as smoothly as predicted. Even though you are 100% focused on the crowdfunding campaign, you must be realistic and create a back-up plan for the unfortunate situation where the target capital will not be reached within the time range.



Robert de Waal from Biogolf and Tetsuro Miyazaki from KRNWTR, were both willing to chip in the remaining amount of money if needed. Another solution, as proposed by Robert de Waal, might be to ask your direct relations to invest the final amount of money or to make the rewards you offer more appealing. For example, increasing the return on investment might be a way to make it more appealing for investors. Robin Slakhorst from Symbid suggests that in some scenarios an entrepreneur can decide to extend the time period. However, on the other hand he argues that if the campaign does not succeed within the given amount of time, it will probably never succeed after all.



It can occur that even your back-up plan is one step too far, and that you are better off terminating the campaign. It is key to be realistic and be honest to yourself. Tetsuro Miyazaki from KRNWTR made realistic decisions before the launch of his crowdfunding campaign regarding a potential failure. “A lack of investors would have implied that our project [KRNWTR App] was not viable. There for we would not have launched our app”. In order to maintain the trust of your investors, it might be wise to pull the plug.



To contradict Tetsuro Miyazaki, you can decide to start over. This could be in terms of a new, differently executed crowdfunding campaign, or by the means of other financing alternatives. Whatever your back-up plan will be, make it a vial part of your whole master plan. And speaking about making a master plan, the ins and outs of it will be explained in the final lesson next week, the bonus lesson

Posted about 6 years ago