Paul Bender, Washington University alum and CEO of Greater Than Games hosted the first-ever Skandalaris Startup Webinar. Bender provided an introduction and overview of crowdfunding campaigns, and useful tips and tricks for successfully utilizing Kickstarter and other platforms to fund your idea. Bender is an expert, having raised $7 million through multiple crowd funding efforts.

For those unfamiliar with crowdfunding, it is a platform for projects that do not exist yet. Entrepreneurs present their idea and provide different pledging levels, or amounts of money that supporters, also known as backers, can pledge. Once the project reaches its funding goal, the entrepreneur is responsible for making the product and sending it, along with any other promised incentives out to the backers. It is a great way to raise money for a product and gauge market interest. Although it is an easy, accessible way to fundraise, Bender acknowledges that this can pose a problem as well. He says that when inexperienced producers use crowdfunding platforms, they need to be sure to have as much information as possible in order to price their product accurately.

Paul Bender also set out some basic things to know before starting your initial campaign. He says the most successful products usually fall within a $20-$100 price range and are tangible items. Bender notes that psychologically, the upper-middle class, millennial, and gen-z audience on crowdfunding platforms tend to be more lenient when spending money on something within this price range. Additionally, backers are more likely to support a project when they receive a real, tangible object, because it provides more gratification.

While crowdfunding can be beneficial for a business, Bender also acknowledges its risks. As mentioned before, inexperience can be a disadvantage for businesses, but cost inflation and confusion about shipping and all of the requirements that come with it, can also cause some unforeseen headaches and pricing issues. In order to avoid these pitfalls, the CEO provided some tips:

• Get as far along as you can on your own before turning to crowdfunding. Developing an impressive prototype, creating a network, and generating buzz about your product will make it easier for you to find backers when you’re ready to start your campaign.
• Look into 3rd party shipping fulfillment to get more accurate shipping costs and logistical assistance.
• “Gamify your crowdfund page”. Create structured incentives or stretch goals to incentivize backers to pledge more money in exchange for more goodies.
• Invest in a 3rd party software to manage your data and orders, especially if you’ve provided different levels of incentives for each customer.

Whether you’ve got a great idea, or you’re just starting to develop your product, crowdfunding may be a viable option for you to secure capital for your business. Many entrepreneurial success stories have started on platforms like Kickstarter and Indiegogo, and yours could be next. If you have any questions about crowdfunding, stop into the Skandalaris Center, or reach out to WashU alum and Skandalaris Center Expert on Call Paul Bender for help!