Rewards based crowdfunding is probably the most popular type of crowdsourcing available today, given that there are no limits on who can invest and who can apply for funds. The perks available with reward-based crowdfunding may not add up to a financial return equal to the investment, but they provide incentive that is motivating. These types of crowdfunding rewards might include many possibilities, listed in the next section.
Types of Rewards Based Crowdfunding
Insider information crowdfunding rewards
Offers from the person you will be investing in of insider updates and information. For example, if you are providing rewards crowdfunding for a film, you might get updates about the actors who have been booked, the plot twists no one else knows, or other aspects of production. If you are providing funding for a product you might get discounts on that product or on other products the company provides. And of course in person “behind the scenes” visits offered to investors are always quite popular
Continued crowdfunding rewards
Updates and Information after the fact. There may be an interest in knowing how everything turned out long after the funding stopped. Whether the rewards based crowdfunding was for a product, and artist, a group of artists, or a new small business, the updates do not need to stop after the funding does. In fact, a person who is involved in crowdfunding may get a wide variety of updates for a very long time, allowing her or him to really follow the long-term meaningful effect of the investment. Those who received the money are often quite glad to provide these updates for a couple of reasons. First it makes their own journey more meaningful and personal, and second there could be a time when they need additional capital and keeping potential investors up to date is always a good thing.
Rewards based crowdfunding for discounts
Discounts and products. One great thing about rewards based crowdfunding for small business or new product is that you might be able to be the first person to receive certain products and you may get permanent discounts in the product or service. For those providing investments in areas where they have natural interests or for products they have taken a liking to, this perk can be quite meaningful and enjoyable. For the person receiving the investment this perk has its advantages and disadvantages. On the positive side the crowdfunding investor becomes an ambassador for the product – a marketer for free to his or friends and colleagues. On the negative this perk can bring a variety of advice and feedback that can get confusing and intrusive.
Other Crowdfunding Rewards
Those looking for rewards based crowdfunding will often be guided by the crowdfunding site in what perks to offer and how to make them meaningful. However, savvy investors may know how to ask for additional perks, or perhaps things that the person may not have thought of. This whole process can make the experience more meaningful on both sides, and can engage the investor in a stronger way that traditional investments offer. Once again the difference between this type of investment and traditional funding is clear and there often can be mutual benefits, but there is no equity exchanged or loan repayment. Here are some examples of possible other crowdfunding reward ideas:
- Meet and greets are great crowdfunding rewards, especially when the fundraising is for an artist or musician (or group of either) that funders may want to meet. These types of meet and greets could include getting autographs or other memorabilia.
- Learning opportunities can be excellent parts of rewards-based crowdfunding, such as when a promising or prominent business person is being funded and the crowd wants to meet him or her and learn something.
- Get togethers are also possibilities when it comes to crowdfunding rewards. This allows funders to meet and be with people who have similar interests. These get togethers can be fun and can lead to lasting relationships.
- Early demonstrations and performances can often be had by those who initially fund an artistic or musical project, or an invention of some type. These rewards can be particularly fun for gamers who fund the development of a new game or funders of plays and musicals.
The above are just a few examples of crowdfunding reward ideas. If you are looking for this type of funding you need to assess both your project and your potential funding group and decide which types of crowdfunding rewards they might like. A focus group is one way to do that, as is following or researching a similar crowdfunding pitch.
Reward Based Crowdfunding Method
If you are looking for reward-based crowdfunding, what process should you follow to get what you need. We break things down into three steps:
Look for a good rewards based crowdfunding platform
There are many options for crowdfunding sites for rewards. Look for those that seem to match what you are proposing as far as style, the types of investors they seem to attract, and the success of those who had similar pitches. Once you have narrowed things down, make sure that you compare fees, customer service, and features at each site.