What are the secrets and science behind the most successful crowdfunding campaigns, and what separates them from the thousands which fail?
Crowdfunding continues to soar in popularity, especially for commercial real estate investment. It not only trumps partial interest investments, which the CCIM Institute recently called “real estate’s most difficult sale”, as well as avoids the hassles and high, yield crippling fees of borrowing, but can be far more rewarding in other ways too.
Of course while the media often likes to highlight the hype and effortless speedy success of some crowdfunding ventures, not everyone sees the traction they hoped for. According to Forbes and PC World only 56% of campaigns actually reach their funding goals. This are pretty good odds, but for most commercial real estate investors and those with a hot retail property deal, a contract inked and deposit money on the line these odds are still too big of a risk to stomach.
Fortunately, there are ways to dramatically increase the odds of success. This includes both monitoring and modeling winning campaigns and taking advantage of the metrics provided by platforms like Kickstarter and Indiegogo.
Here are 15 factors that can make your commercial real estate crowdfunding efforts better:
- Test, and drive interest for your project on social networks before going live
- Drive social interaction and sharing throughout by encouraging shares as a form of contribution for those not prepared to give financially
- Email everyone in your contact list with a direct message
- Distribute your own press release to garner international attention
- Gather support from local real estate professionals (who can eventually profit from the project in one way or another)
- Indiegogo suggests listing multiple team members dramatically increase funding results
- Create attractive perks and use discounts and giveaways from retail tenants to make contributing more attractive
- Break funding into multiple stages for example; deposit, acquisition, improvements
- Use video to make your campaign standout
- Highlight the positive impact the project can have on the local community
- Advise potential contributors what happens if you don’t get fully funded; will you stil proceed or will they get their money back?
- Use a professional copywriter to explain the benefits of what are they getting to be a part of – cool, social good, valuable perks, a legacy project
- Layout a timeline with short and long term milestones versus a far off completion date
- Post regular updates to keep donors engaged and sharing
- Recruit and list the professional, third party, full service retail property management firm you will be using in order to instill confidence