Should you consider hiring a crowdfunding consultant?Nov 14, 2016
Crowdfunding might seem like a difficult task when you have never done it before. There are so many things to research, plan and execute. How can you possibly succeed if you don’t have any experience?
Sure, there are many online resources available that can help you throughout your campaign. You have people around you who know people who’ve done it and are happy to offer you their advice. But, should you listen to them?
Finally, there are also crowdfunding consultants who, for a fee, advise you on launching, running and promoting your campaign. Some of those consultants are very good and can provide valuable help, especially for campaigns trying to raise more than £100,000.
Others are completely useless, self-made “experts” who will take anyone’s money just to repeat things that they’ve learned from reading crowdfunding articles online.
So how do you know who to trust?
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.
Below, we are listing the most important things to consider when on a hunt for a good crowdfunding consultant:
Look for somebody with relevant experience
Many crowdfunding consultants are just marketing or PR firms with no real crowdfunding knowledge or experience who are trying to expand their services to this new, lucrative market sector. Sure, they will use their expertise and contacts and send out an online press release for your campaign, but will this really help in promoting your campaign? PR and marketing knowledge is not all that you need to succeed with crowdfunding. Seek out a consultant with social media and digital marketing knowledge and, above all, with start-up and previous crowdfunding experience. A good consultant understands the crowdfunding landscape, including who to reach out to and how to target media and potential investors depending on what industry your campaign falls into.
Look for success stories
Ask your potential consultant to provide you with some numbers. Ask them how many successful campaigns they’ve helped to plan and execute? How much money did they help to raise? What types of startups they’ve worked with and how many in each sector? Did they ever fail to reach their goals and why?
Check their references
Anybody who helped to execute a successful crowdfunding campaign can claim themselves as a crowdfunding expert, but very few would be able to back it up with consistent success stories and references that will vouch for their value. Ask for a list of at last 10 campaigns the consultant worked on, whether they were successful or not. In measuring the success rate, a good consultant should be able to have an 85% success rate or higher to justify their fees. Try contacting some of the startups the consultant has worked with and see if they would be keen to recommend them.
Ask for their fees and payment structure
Fees will vary from one consultant to another. Some will charge flat fees up front, others will ask for a percentage of the money you’ve raised, and others a combination of both. Think who would be more incentivized to work tirelessly for 30 to 60 days to get your campaign rocking and rolling. Also, get the fee structure in writing and sign a contract detailing their services if possible, so there are no unpleasant surprises at the end.