This seems to be the hottest business right now and everyone wants to be connected to a reputable company that can help them raise money for ther business. Here are a few tips from Entrepeneur magazine contributor, Kendall Almerico, that you should think about before hiring a consultant for your crowdfunding efforts:
1. Find a consultant with a multidisciplinary team of marketers.
Many crowdfunding consultants are just marketing people or PR firms who will send out an online press release for your campaign. This does little to no good by itself. You not only need someone great with public relations skills, but a consultant with experience with social media and digital marketing. A good consultant understands the crowdfunding landscape, including who to reach out to and how to target media and donors depending on what industry your campaign falls into.
2. Ask to see their track record and check references.
“Anybody can say they are a crowdfunding expert,” Morejon says. “Very few can back it up with consistent success and references that will vouch for their value.”
Ask to see the last 10 campaigns the consultant worked on, whether they were successful or not. Pay close attention to the success rate. On Kickstarter, only about 40 percent of all crowdfunding campaigns are successful. On other platforms such as Indiegogo and GoFundMe, the success rate is reportedly only 10 percent.
A crowdfunding consultant should be able to show a higher success rate to justify their fees. Command Partners, for example, has an 85 percent success rate of campaigns reaching their goal.
Related: The Year in Startup Funding (Infographic)
3. Make sure they are well connected to the media.
Nothing makes a crowdfunding campaign go viral faster than media coverage. When Morejon consulted on the Trunkster Kickstarter campaign that raised nearly $1.4 million, a big boost came from an appearance on Good Morning America, as well as a story in Travel+Leisure.
Nearly every crowdfunding consultant will offer press releases as part of their package, but access to actual media contacts and proof that the consultant’s media pitches consistently work is the key. Don’t believe someone who promises to “get you on the Today Show” unless they can show you a track record of other crowdfunding clients sitting next to Matt Lauer.
4. Ask about their fees.
Fees vary from consultant to consultant, with some charging flat fees up front, others charging a percentage of the money raised, and others a combination of the two. This is a good place to remember the old adage: You get what you pay for.
Don’t expect someone you pay a one-time fee of $500 to work tirelessly for 30 to 60 days to get your campaign rocking and rolling. Also, as an attorney, I offer one more bit of advice: Get their fee structure in writing, and sign a contract detailing their services if possible, so there are no surprises at any point.
For those trying to crowdfund $1,500 to pay for your dream vacation or a few hundred to get a new set of sub-woofers for your car, a crowdfunding consultant is not for you. But for those who need to raise serious money to start a business or get a product manufactured and to market, a good crowdfunding consultant can be invaluable.
But finding a good consultant is not easy. You need someone with creativity and who is willing to think outside the box of normal marketing practices, and who also has a track record of success. Follow these tips, do your homework, and pick someone that will justify the cost of bringing them onto your crowdfunding team.