Kickstarter hacks: 3 rules to help you raise the most money from crowdfunding, according to research
You've got big dreams of changing the world, but you need cash to make them them happen. For a long time, the traditional playbook has been to put together a pitch or a prototype, and hit up powerful venture capitalists with money to spare for a seed investment in your project.
But if you're not well-connected, or if your great idea is more about addressing a social ill than turning a profit — that process leaves a lot to be desired. That's why a growing number of aspiring do-gooders have turned to crowdfunding sites like Kickstarter, which has helped raise more than $3 billion to date across both commercial and social projects.
Alas, only about 36% of Kickstarter projects actually reach their funding goals, and raising money from the masses can be competitive and challenging. Luckily, there are a few smart moves you can make to maximize the money you drum up, according to a new study out of the University of Illinois at Chicago.
The main takeaway from the research? It turns out that your "linguistic style" — aka the way you write — might be almost as important as what you're trying to say. To arrive at their findings, the researchers surveyed 656 crowdfunding campaigns listed on Kickstarter, including 411 commercial and 245 social ventures. The authors defined social ventures as projects and products that also served some sort of social good, like eco-friendly framed eye charts.
What they found was that successful social ventures had to be described in different language from commercial enterprises: A venture capitalist listening to a pitch is generally profit-focused, whereas the people crowdfunding social ventures are looking for more complexity and nuance.
"They have to master both content and style," Annaleena Parhankangas, the study's lead author, said in an email. "Their pitches need to be informative, precise and concrete, but also create an emotional connection to their audience. It is not either or."
So how can you hit all the right notes? Parhankasgas and her team identified three linguistic devices that the most successful Kickstart campaigns used, with success defined as hitting their funding goal. Here they are.
1. Precision is more important than variety
One of the main findings was that it's more important for social entrepreneurs to use precise language. This is a common dilemma for founders, who must tread the line between making their idea seem new and ground-breaking but accessible at the same time. If you're pitching some sort of device, for example, the authors note that you should describe it as a "device" throughout your pitch as opposed to subbing in synonyms.
Similarly, resist the urge to use gimmicky language, even if it sounds more clean and concise to your ear. For example, instead of saying "Purchasing is simple: you connect, select and sign-out,” the authors write that you should actually spell everything out and avoid modifiers: "Purchasing happens by connecting through the company's website or a Facebook page to a customized event page and a shopping cart, pre-purchasing the items from the selection provided and signing out from the event page."
2. Turn statements into questions
Another thing you can do? The authors recommend making your pitch feel more interactive through the use of questions and invitations for feedback. For example, instead of describing your product's sleek design, the researchers write that you should phrase the sentence as a question: "Don't you like the sleek design of our product?"
Using this style signals to the reader that you're receptive and sensitive to their needs, or are at least trying to be. For social ventures, as opposed to more strictly commercial ones, this is particularly important, the authors suggest.
3. Keep it personal and use the first-person
Don't be shy about using the first person. When we write using the third person, we're using something called "psychological distancing" to create the sense of being objective, the authors wrote.
In situations when you're appealing to an expert, psychological distancing is really important; it shows that you did your homework, and that you're not just speaking anecdotally or off the cuff. But when you're crowdfunding, you're not pitching experts. You're pitching everyday people, often people who are scrolling through social media feeds looking for something interesting to click on. For that reason, too much psychological distance could actually backfire.
If you're pitching a medical device, for example, the authors wrote that you should talk about your medical background, and how it taught you of the importance of helping people alleviate pain. In other words, keep it personal, as opposed to trying to prove your point exclusively with facts and figures.
Now, there are a few caveats to the research. The authors didn't study how social entrepreneurs should pitch professional investors, for example. The researchers also didn't measure and compare amounts of money raised or how ambitious goals were — just whether or not funding goals were reached.
Additionally, more research might be needed to figure out if this is a temporary phenomonenon or not: "We would expect that once social entrepreneurship matures as a field, it will be easier for social entrepreneurs to attract backers by focusing on content in their crowdfunding pitches," Parhankangas said. "In other words, it is possible that the importance of linguistic style becomes less important (but not insignificant)."
Finally, remember crowdfunding will only get you so far. If your idea takes off, you'll have to start dealing with people directly, including new colleagues, investors or customers. In other words, to get ready for long-term success as a social entrepeneur, you'll need to brush up on key communication skills like remembering names, projecting confidence and active listening.
Sign up for The Payoff — your weekly crash course on how to live your best financial life. Additionally, for all your burning money questions, check out Mic's credit, savings, career, investing and health care hubs for more information — that pays off.