Backing a crowdfunding campaign offers a world of excitement and opportunity, but not every campaign delivers on its promises. Those who do their homework before taking the leap are more likely to get the most out of their crowdfunding dollars. We advise a methodical research process to determine whether or not a particular Kickstarter or Indiegogo campaign is a good investment before you back it.
Are you able to make a long-term investing in a crowdfunding project?
The crowdfunding project research process starts with you. Every campaign requires you to make your investment months – or sometimes even years – before you get anything in return. Are you ready to take the gamble that you may not get anything in return? As with any investment, only use money you can afford to lose.
Does the Kickstarter campaign page answers all of your questions?
First, you should read the entire Kickstarter or Indiegogo page, especially the “Risks and Challenges” section of the page. The campaign copy should provide responses to most of your preliminary questions. Look for comments from other backers, as well. Pay close attention to the questions people are asking in the comments section, but also look for backers who have backed previous projects. People who back a project by the same company or person more than once are usually satisfied with them.
Is the company behind the Kickstarter project trustworthy?
Like an investigative reporter, you want to know the who, how, what and when of the opportunity before handing over your hard-earned money. Hit the web for additional information and insights about the company and its people. Who is seeking backers and what can the internet tell you about them?
At this stage, you are looking for information about any earlier campaigns this company or individual may have launched, as well as any information about who they are as a company. If you find information on related campaigns or businesses, look for information on how successful they were. Did they raise the capital they were seeking? Did the product ship on time? Is it still successful? What kind of feedback did they receive?
Check out the principal players behind the offer, too. Have these people been successful in other areas of their work or career? Those with a proven track record offer less risk than those who are not as well established.
You also want to discern how the company responds to backers. Do they issue regular updates on the development and manufacturing process? Are they transparent with their timelines, processes or decision-making? Any communications they have issued – or failed to issue – regarding any aspect of their company are a good indication of how they will act towards their backers in the future.
Does the Kickstarter project seem feasible?
Look for details about the proposed product itself. Some campaigns are launched before the team has any idea how they will execute on the product. Does it actually respond to a current consumer need or demand? Is its production process clearly defined? Is there a timeline for its release, either in preliminary or final form? Is it actually scientifically feasible? Is there a working prototype in existence?
Each backer is different, and some might find the risks of any given campaign to be too high, while others are more comfortable taking on more significant risks. Finding the right campaign to back – or starting one yourself – can be challenging. At Art of the Kickstart, we provide the advice and insights you need to research a campaign well or to become a crowdfunding artist in your own right. Check us out today by subscribing to our podcast.