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Division of Small Business

Workshop covers the basics of crowdfunding your business


Karen Igou has run several successful crowdfunding campaigns to grow her business.

She shared the secrets of a winning campaign Wednesday as part of the Small Business Assistance workshop series presented by Delaware Libraries.

When people donate to your crowdfunding campaign it’s because they believe in you and your idea and not necessarily because of the perk you’re offering, said Igou, owner of Honey Bee Seasonal Kitchen & Market in Wilmington.

In crowdfunding, a small business owner raises money from other people to fund starting or expanding a business. Contributors are rewarded with some sort of perk.

Igou’s most recent crowdfunding campaign, in spring 2015, raised more than $26,000 in 45 days on the online crowdfunding site indiegogo. Igou used the proceeds to renovate Honey Bee’s retail space in Trolley Square.

Some of the people who contributed didn’t claim the perks they were entitled, she said. They were longtime customers who wanted to support the business and its mission of offering locally sourced foods, all of which comes from within a one-hour radius of Wilmington.

Still, selecting perks is an important aspect of running a crowdfunding campaign, a lesson Igou learned from her first crowdfunding effort when she was running the food-buying club that eventually grew into the kitchen and grocery store.

Making the perks too generous can eat into the proceeds.

In Igoe’s first crowdfunding campaign, contributors received 110 percent of the amount of their contribution in store credit, an amount she said was too expensive.

In Igou’s most recent campaign, she offered a variety of perks including the chance to participate in exclusive events, such as tours of a local farm, or a kombucha-making class.

Business owners might also consider offering perks that don’t cost anything, Igou said, such as the chance to select the paint color of a store, or name a new ice cream flavor.

Regardless of what the perks are, it’s important to send them to contributors as soon as the fundraising campaign is over, she said.

Here are some other takeaways from Wednesday’s session:

  • In running a crowdfunding campaign, don’t ask for more money than you actually need.
  • Keep in mind that friends and family are your most likely contributors so make sure to include them.
  • Contributors want to know how you’ll use the money so include an item-by-item explanation in your fundraising pitch along with the price of each item.
  • Make sure to include photos and, if possible, video, in our online pitch, such as a photo of the retail space you’re seeking money to renovate.
  • Consider adding new perks during the course of your crowdfunding campaign, such as after 20 days and 30 days. Most campaigns last between 40 and 45 days.

Delaware Libraries will offer more four Small Business Assistance workshops in March:

March 6: Manage Your Digital Business Information

March 13: Incorporating a Business: The Why, What and How of Formation

March 20: Find Your Customers and Competitors Using Census Data

March 27: The 5C’s of Credit: the impact on your financial success

The programs are presented simultaneously at the Bear, Dover, Georgetown, Milton and Wilmington public libraries.

For details, check out the calendar.

The Division of Small Business wants to help you start and grow your business in Delaware.

Contact us to see how we can help you.

 

 

 

 

 

 


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