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Bringing Sexy Back to Crowdfunding
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Bringing Sexy Back to Crowdfunding

Editor's Note: The following comes to us from Shay Stewart, a business owner and entrepreneur who is currently raising money for a gelato shop called Leilani & Kalani on the crowdfunding platform ProHatch. Stewart is writing a series of pieces for detailing his crowdfunding journey and giving advice on how to create a solid business plan, an engaging campaign, and an appealing video to help draw the crowd to the campaign page. In this second part of the series, Stewart discusses how to prepare for the campaign, focusing on writing the business plan and choosing the appropriate funding platform. 

Yeah, we know. At this year’s Finance Ball, private equity is the charming belle, venture capital is the ambitious hussy, and crowdfunding got stuck in traffic on the way there.

Yet for some reason, venture capital just isn’t sexy to me. But crowdfunding certainly is, no matter how late it arrives onto the global business scene.

- Igniting the Crowd: How to Turn Up the Heat on Crowdfunding

The creation of a blog, attractive rewards, and filming on location (even in your backyard) has a certain “je ne sais quoi” written all over it -- just like graffiti in a Paris city park. This new dynamic in crowdsourcing and finance is suddenly, dare I say, hot.

The current state of crowdfunding is booming and crowdfunding platforms helped companies and individuals raise $2.7 billion across 308 platforms and fund more than one million campaigns in 2012, an 81% increase on the previous year, reports Massolution (a sister firm - ed.). It predicts that global crowdfunding will exceed $5.1 billion in 2013, almost double from the previous year. That’s hot.

Designing a campaign, building an early community of backers, fulfilling rewards and using funding as promised is what’s required. The moment has arrived, and it’s time to get in the game to turbocharge your crowdfunding campaign. Before designing your campaign, you must first build a rewards program that captures the full excitement of what you’re doing: your passion has to translate into inspirational rewards that are both tangible, and something that backers can see value in. Don’t go over the top and offer a reward that includes a week’s long vacation on a private yacht in the Mediterranean (as this is one of the reasons why former French President Nicolas Sarkozy was eventually kicked out of office), as you want something that is fair and consistent that simply says “thank you for your generous support in backing this endeavor.” When that’s all done, this game is so on.

Entrepreneurs should consider the power in approaching equity or lending following a donation/reward campaign that proves concept, customers and revenue without sacrificing ownership. By starting with a rewards campaign, entrepreneurs can create a loyal funding community whose continuing participation will shorten any traditional capital round from years, to just months. There is no surefire formula for building a successful campaign, but you need to attract the right kind of backers nonetheless.

Grudgingly, you have to become the world’s leading purveyor on all things that you want to do; basically, you have to be obsessed with your project idea and its launch (the research and writing of your business plan should cover you here). I have found that crowdfunding is not for the faint of heart, as it takes hard work to prepare your campaign. To optimize the value of my campaign, I focused on designing a campaign that builds upon the business plan (which includes the marketing, revenue model, and our unique strategy for a sustainable community) -- which are basic foundations for running a successful business.

Leilani & Kalani is a startup that aspires to be a maker of artisan gelato that stands for all natural and uncomplicated ingredients in the Hawaiian Islands, and one of the many challenges in creating a rewards program for my campaign is that we’re not operational as of yet, so sending pints of gelato in the mail just isn’t feasible. I had to become original and deliver “a little piece of Hawaii” directly to project donors, and the best way to capture the spirit of the Hawaiian Islands is to create rewards that Hawaii is famous for: swaying palms, lush tropical rainforests, and its reef-studded ocean that is colored with infinite shades of turquoise and electric blue.

The crowdfunding campaign rewards consist of a "Honolulu Summer Box 2013" which includes fun products for the sun, surf and sand: sunblock, tanning oil, clear facial zinc, organic shampoo & conditioner, hand cream and a chic Honolulu city guide (where to eat, what to do, where to sleep, the best neighborhoods and shops to see), to go along with a Paradise, Hawaiian Style reward. Other rewards inside the summer box includes a gourmet package of honey roasted macadamia nuts, pineapple hard candy, and a ticket to our launch party event in Honolulu where backers can meet the Leilani & Kalani team, socialize with other contributors while hors d'oeuvres are prepared by chefs using local dishes.

The great thing about Hawaii as a selling point for the crowd is that it’s surrounded by green volcanic mountains and is a “bikini destination” that has 280 days of sunshine a year, with an average daily temperature of 85F. It’s home to new restaurants, independent boutiques, and is fast becoming the stylish capital of Polynesia. Over eight million tourists visit Honolulu each year and this urban beach is packed towel-to-towel -- sunburned honeymooners, barefoot hunks carrying surfboards, swimmers with multicolored inflatables and bikinis, they all rub shoulders. With these elements combined, Honolulu definitely “brings sexy back” to the crowd.

Once the rewards program is completed, the online video presentation can commence. Not being a video pro, let alone not even owning a video camera, I went to ProHatch and they advised me to reach people on a personal level and to grab their attention within the first ten seconds of the video. ProHatch proved instrumental for my campaign as they instructed me to compel my audience to purchase rewards, fund, and share my project.

The Leilani & Kalani campaign is focused on sustainability, which runs deep, as our fundamental ethic blends business growth with the conservation of natural resources. Having a near-zero impact on the local environment is the main theme within our crowdfunding video since 70% of American consumers prefer to eat ice cream in a cup, rather than on a cone. Leilani & Kalani ups the game by only using 100% biodegradable container cups that we’ll serve to customers, spoons and napkins included.

With 2013 on track to be the breakout year for crowdfunding, many projects have already seen extraordinary campaigning results -- Veronica Mars, Pebble Watch, and others have fundraised millions beyond their original goals because they inspired the crowd with their proposals, products, and plans. Even without the “big wins”, thousands of start-up and SMEs have raised the funds they need to fuel their businesses with a crowdfunding campaign, and created loyal funding communities of brand ambassadors...and remember, a business and brand that represent who you are at your core, is very sexy.

Prior to starting Leilani & Kalani, Shay Stewart worked on the the foreign exchange market, which is by far the world’s most liquid financial market that trades $4 trillion a day and represents the largest asset class globally. Before working in the foreign exchange markets, Shay specialized in writing business plans for small-to-medium sized enterprises needing $1-10 million in financing; once completed, he would raise the capital needed for the enterprise to become a thriving success.

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