Why Use Perks for Your Equity Crowdfunding Campaign
Many crowdfunding campaigns include perks as a way of saying “thank you” to those who donate and support the company. Ranging from a social media shout out to a red carpet premiere, these perks are traditionally a part of reward-based crowdfunding on platforms such as Indiegogo and Kickstarter.
That said, as crowdfunding has grown to include equity crowdfunding via the JOBS Act, perks can still be a valuable tool for capturing investors’ attention.
Indiegogo has found that (non-equity) campaigns that offer perks raise 143% more money than those that do not because of their ability to attract a larger audience, help spread the word about your campaign, and make people feel more valued for their contributions. On average, Indiegogo campaigns have typically offered four perks, but campaigns that hit their goals have typically offered seven perks. Perks accompanying a campaign donation of $100 have also been found to raise the most money, often making up 30% of total funds raised.
According to Forbes, while your goal with all crowdfunding – equity crowdfunding included – is to raise what you need for your company, the more you can focus on your investors, the more likely you are to create perks that help you meet your funding goals. By creating perks that are useful or particularly appealing to your audience, you’re more likely to compel those viewing your campaign into investing.
From different types of perks – like material (your product, a t-shirt, or other item), personal (a customized thank you or other interaction between investor and founder), or experiential (a meet and greet, tasting, or other experience) – to different perk pricing, there are many ways to influence urgency, accessibility, and interest. For material perks, you should set expectations for delivery, as well, to create the best customer experience possible.
All your perks should be priced with your shipping costs, manufacturing, and time in mind to be sure you aren’t losing money while intriguing potential investors. What’s more, if you can create exclusive perks or a limited number of perks available at a certain price point, you can potentially drive early investments.
Want more advice on structuring your perk pricing or brainstorming what perks to use for your campaign? Download “Perfecting Your Perk Strategy” from our First Democracy VC partner Indiegogo. Not a MicroVentures investor? Sign up today.
This content was originally published here.