Having spent the early part of May getting a head start on summer activities, I suddenly found my inbox flooded with business plans and proposals from others asking for my support and/or funding for their startup and charitable pursuits. Throughout the past couple years as a philanthropist promoting social causes and helping entrepreneurs promote their startups, I’ve read countless articles that provide tips on how to attract investors, how to build social media platforms, etc.
However, I’ve very rarely ran across articles which depict from an investor’s perspective various criteria a crowdfunding initiative should have to make an investor want to invest.
As an investor it’s crucial to have a set standard to insure one’s resources whether it’s time or money will be efficiently used to help. Otherwise, an investor runs the risk of spreading one’s self too thin and not making an effective impact as an investor.
So what are my top 3 essentials?
Established Social Media Following
This is a crucial one. Especially in day and age where social media is so prevalent and is how most people connect. According to the Global NGO Online Technology Report, 72% of Millennials donate funds to organizations through social media.
As an investor it is crucial to see an organization well past the initial ground-building stage of a social media following. An organization should not only have social media platforms across Facebook, Twitter, Google+, websites, but at least 100k in followers as well as considerable engagement amongst them before reaching out to investors. Press mentions don’t hurt either!
Measurable Return on Investment (ROI)
While philanthropists enjoy giving selflessly to an organization in need, it’s equally important that there is some ‘bang for one’s buck’. Whether it’s a timely monetary ROI for providing startup capital during their initial ‘pre-planning’ phase or a seat on that organization’s board where one can have a considerable influence on shaping that organization’s goals.
Notice I did not mention a free t-shirt with each $500 donated to your Kickstarter campaign.
Credible ‘Back Office’
When one announces that they are a philanthropist on social media, through networking events, etc. I know from experience you are going to receive the good with the bad. Suddenly everyone wants to donate to orphans in Africa, suddenly someone has an idea on how their business can sell lemonade to those running a mile, etc.
One of the most important criteria for investing in a campaign is for that organization to have a considerable and reputable track record. Some scams you can smell a mile away while others you’ll need to use your judgment on. See my article on How to Spot Crowdfunding Scams
I think it’s very important for an organization looking to attract investors to represent themselves well and to be able to provide substance to an investor.