Events cost a lot of money to organize, particularly if the primary source of revenue is dependent on ticket sales. It can be tough to put together the cash in time to pay off venue contracts and vendors.
If you’re having a difficult time funding the conference, concert or party you want to put on next, then you might think about crowdfunding. Many prominent businesses have raised capital through crowdfunding. There is no real reason why you should not take a look at it to finance your next successful event.
You do need to take into count some of the good and bad associated with financing your next event this way.
Think about it, if you were successful raising the money for your event, then this is going to help establish a nice email list with people who have already shown that they support your organization. Why not utilize these lists in order to gather funds for future events? In addition, you can also promote other items, services, opportunities and of course, more events!
The good about using crowdfunding to finance your next event:
In trying to raise money there’s going to be an investment of time, energy and money associated with it. It often costs money to raise money. What we are really talking about is risk. Crowdfunding takes away a fair portion of the risk. You generally do not have to pay anything out of pocket or you will pay very little.
Hitting your target and then surpassing it will obviously do quite a bit of good for your event.
Crowdfunding can be the perfect way to experiment with just how in-demand an event idea might be. If you use crowdfunding and it fails miserably, then you might want to think strongly about what this means for that event idea. If the campaign is super successful, then this is a good indicator that there’s plenty of demand. This can help reduce worry as you get close in on your event date.
You can create intrigue before the event even begins.
With crowdfunding, you are reaching out to people with funds who will also have the ability to look at the promotions associated with it. There is a very real chance your event can go viral. You can make use of interesting pictures and videos that call attention to events you’ve held in the past in order to create excitement for your next event.
The bad about using crowdfunding to try and finance your events:
Your idea can get hijacked by someone with more capital (read money), than you.
Using a crowdfunding campaign puts you at risk of having your idea “borrowed” by someone who likes it, sees its’ potential and has the money right now to get it going. At first glance, it may seem like a good thing. It means you have a good event idea. However, the goal was not to establish yourself as the innovator of the event idea. You goal was to find funding for the event idea.
Campaigns that really work require a lot of time, energy and money.
If you just launch a campaign through Kickstarter or Indiegogo and hope it will be a hit, then you’re setting yourself up to fail. In order for a campaign to be successful, it’s going to require a lot of time. Strong copy will be needed, rewards will be required at different stages and you’ll need to make videos and pictures to promote the campaign. A respectable amount of money will be required just to get the campaign started.
Many platforms, such as Kickstarter or Indiegogo take a percentage of the funds raised, in the form of a service charge. That amount is above and beyond the monies that credit card processors charge. Most processors have a transaction fee of $.25-$.30 on each transaction plus the regular credit card charges which vary depending on the card used.
It doesn’t really matter which platform you choose to launch a crowdfunding campaign, the platform is going to take a generous cut of whatever you raise. All of this requires you to be even more successful than you might expect in order to offset these costs.
Keep in mind that the odds aren’t always on your side.
Unfortunately, the majority of crowdfunding campaigns are not successful. The numbers can be as high as 90%. As you can see this is quite a large amount of failures and should serve as a warning as to just how tough things can be. Decent amounts of time, energy and money can be used to get something started only to have the campaign fail.
You need to carefully weigh the good versus the bad. Crowdfunding an event is good if you already have a strong social media following or are just good at promotion in general. Short answer? Do your homework. You never want to behind in your fundraising before you barely have started.