How to win over the funding crowd

Got a business idea you think will change the world, but no money to launch it?

Crowdfunding websites enable entrepreneurs to showcase their products - and supporters to invest in ideas from the ground up.

Post your idea and your funding target, promote it, hit the target and the funding is yours. Don't and the promised investors don't pay.

Consider Kickstarter, Indiegogo or the most popular Australian fundraising site Pozible. An equity crowdfunding website, VentureCrowd, is due to be launched this month.

But before you consider showcasing your great idea, make sure you have a few things in order.

You may want to ensure you have a website, established social media accounts, a 'look at me' video that introduces your product, good images and buy-in opportunities for those who wish to invest. The more prepared you are the better the chances of raising your requested amount.

Crowdfunding relies on giving your investors something they can't get anywhere else: an exclusive package that involves boasting rights and first-in privileges.

Anyone looking to start a crowdfunding campaign would do well to visit website Drop-kicker, which analyses and reviews the successes and failures of current campaigns.

Not everyone is going to experience the immediate crowdfunded success of the Pebble watch, which puts the technology of a smartphone on your wrist.

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The US company behind the watch began with a crowdfunding target of $100,000 on Kickstarter and ended the campaign a month later with more than $10 million from almost 70,000 people.

Established creatives are also utilising crowdfunding to make their film and album dreams come true. Hollywood actor Zach Braff raised more than $3 million on Kickstarter for his Wish I Was Here film project. Australian artist, Perth-based Sam Buckingham, used Pozible to raise $10,000 to record an album.

“This was my fourth release and, in the past, I'd funded recordings in different ways," says Buckingham. "At one point I had a private investor, but I felt uncomfortable taking a large chunk of money from one person."

She says funding her own work began to feel unsustainable as she tried to juggle two jobs and her personal and creative life suffered.

"Crowdfunding made sense - a little bit from each person with a tangible benefit to them. And, the financial pressure was off for me to put up a bigger amount at the beginning," she says.

By the time her deadline arrived, she'd raised $11,515 from supporters by offering packages such as an afternoon of songwriting for those that pledged $300.

Nicole Brownlee came up with her idea for Story Box Library, a membership-driven website offering storytelling for Australian children, while visiting her children's school that used interactive multi media whiteboards to help with teaching in the classroom. The kids were watching an American actor narrate in a visual story book video.

“I thought 'how can we use this in the classroom more with Australian voices?' and I wanted it to facilitate education, not just be used as a babysitter,” explains Brownlee.

She's since asked Missy Higgins, Claire Bowditch and Nick Cave to lend their voices to the project that utilises video and picture stories for three to 12-year-olds.

“We started with a $12,000 goal ... we really needed double but I didn't want to get greedy and lose out," says Brownlee.

"With crowdfunding I have seen great products that have fallen flat because they have asked for too much we decided that it was better to have $12,000 than not being successful and asking for $20,000.

"We have used the Pozible money to pay our website developers because that is our primary product. We are fortunate that we have had a lot of in-kind support. The combination of Pozible and in-kind support got us to the point to be able to launch the site to get paid members and I have funded the rest myself.”

Sound easy? Think again. Crowdfunding is a big job, not just an easy lottery ticket to financial success. And not everyone succeeds.

“I thought you could just create the campaign and sit back,” says Brownlee, who admits to a lot of sleepless nights through the process.

“You have to follow through, you have to make sure people are hearing you and know that funding is being sought and campaign. It is frightening because it is a proof of concept and you are throwing something out to be liked and accepted.

"Then you'd think 'no it is never going to work' so you really have to steel yourself to do it. You are starting your marketing campaign off the bat."