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Five tips to raising money on Kickstarter

Need some funding for a new project you're launching?

Available now for free, The Crowdfunding Bible is a comprehensive guide to raising money online through "crowdfunding" platforms, including the popular Kickstarter, as well as IndieGogo, RocketHub, PeerBackers, and others.

For the uninitiated, crowdfunding refers to platforms used to raise money among a large group of people, usually online, to support the launch of a new product or service.

For example, Waterloo, Ont.-based Allerta has raised more than $10 million dollars for its upcoming Pebble: E-Paper Watch — the largest amount ever raised via Kickstarter. (I discussed it on CNN last Saturday, but can be viewed again here for those interested).

In fact, the creator of the Pebble smart watch, Eric Migicovsky, has written the forward to this free digital book.

Penned by seasoned tech writer and consultant Scott Steinberg, along with Rusel DeMaria, this book could also be purchased in paper form for $13.99.

I caught up with Steinberg, who revealed his top five tips to successful crowdfunding.

Do your research up-front

Study successful and failed campaigns to see which projects, marketing strategies and rewards connected with fans, why, and to what extent. Consider the breakdown of rewards they offer (i.e. physical goods vs. exclusive experiences), cost structure, and promotional vehicles used to spread the word about these projects (social vs. traditional media, video endorsements by noted personalities, etc.). Likewise, budget conservatively up-front, including factoring in all costs for reward fulfillment, leaving yourself a 20 to 30 percent cushion for hidden expenses — then ask for the minimum funds needed to complete your project to make goals seem more attainable to backers.

Be prepared

Understand who your target audience is, where they live online, and how to reach them. Know what tools you have to get their attention, and prepare all supporting assets (videos, screenshots, social media accounts, etc.) in advance. Practice and refine your pitch until you can summarize your project in less than 20 seconds. Then build a running promotional campaign that incorporates an ongoing series of marketing activities to run throughout your project's entire duration.

Build effective rewards

Use a combination of merchandise, once-in-a-lifetime opportunities and personalized gifts (e.g. giving backers a bit part in your next book or video game) to generate cash and awareness. Offer attention-getting gifts at all reward levels, including impulse-buy levels, and don't leave too many gaps between pricing tiers, so everyone has a chance to contribute regardless of personal budget.

Keep pitches short and sweet

Presentation is everything: Don't skimp on production values, and quickly convey what your project is, why it matters, what qualifies you to make it happen, and how it benefits readers/viewers. With a picture worth a thousand words, use video and screens to communicate where possible, and focus on one to three unique sales points, which should be reinforced in all messaging.

Build buzz — then keep it echoing

Creating a running dialogue with backers, fans and media is vital — to succeed with crowdfunding, you need to stay top of mind. Social media services like Twitter can be even more effective than articles and interviews here, as can staying in running contact with backers (your most ardent evangelists) through ongoing updates. A mix of promotional activities should be used to generate chatter, and on a consistent basis — remember, crowdfunding is a marathon, not a sprint.