Crowdfunding 101: Everything You Need to Know Before Launching Your Project

What Is Crowdfunding?

Crowdfunding (crowd + funding), true to the meaning of the words, is a way to raise capital from the public to fund the creation of products or services.

With more crowdfunding platforms emerging and gaining popularity, a big opportunity has opened up for founders with limited capital. In this post, we’ll cover the following:

1. Major crowdfunding platforms
2. Popular project categories on crowdfunding platforms
3. Key factors to consider for a successful crowdfunding campaign

1. Major Crowdfunding Platforms (Tumblebug, Wadiz, etc.)

Tumblebug: A Reward-Based Crowdfunding Platform

Tumblebug is a platform created to open up possibilities for individual founders and creators and to foster public affection for creators, with a focus on cultural content. On Tumblebug, anyone can post a project for their creation and ask for support, and in return, backers receive commemorative items and rewards when the project is completed.

Packative is currently an official partner of Tumblebug, so if you’re planning a crowdfunding campaign, come work with Packative! We’re also planning special benefits for Tumblebug creators soon, so don’t forget to stay updated with Packative.

If you’re 고민ing about package production, be sure to read: Package Design Color Guide: A to Z for Non-Designers

Wadiz: A Crowdfunding Platform Offering Both Securities-Based (Investment) and Reward-Based Models

Wadiz’s business areas are broadly divided into two categories. The first is similar to Tumblebug: projects that raise funds to provide products or services that have not yet been launched. It is especially useful for entrepreneurs planning innovative products and services that target early adopters by introducing something new that does not yet exist in the market.

The second is Wadiz investment, where the public invests in startups or cultural content and receives bonds or shares in return. Unlike traditional investment methods, investors can invest directly without going through a financial institution.

If you’re interested in starting a business, this is a must-read! The Packaging Secret Behind Higher Repeat Purchase Rates for Successful Online Store Founders

Crowdy: A Crowdfunding Platform That Discovers Emerging Startups Through Screening

Crowdy is the only platform in the crowdfunding industry that discovers startups through strict screening, which is why securities-based funding performs better there than reward-based funding.

In addition, Crowdy focuses on sponsorship-style funding that allows students to raise money. With a mission to let not only college students but also middle and high school students experience funding culture in advance through education, it offers virtual experiences such as mock funding. Startups with confidence in their products, or students who want to take on crowdfunding for the first time, can also receive investment-based funding on Crowdy.

A must-read for a successful crowdfunding campaign: 9 Reasons Package Design Matters

2. Popular Crowdfunding Services/Products for Reward-Based Funding feat. Tumblebug

Independent Cultural Content Creation: Indie Films, Independent Publishing, Indie Games, and More

Homeward Bound (2016)

Did you know that the film Homeward Bound, which drew 3.5 million viewers, was actually produced through crowdfunding?

Because it told the true story of comfort women victims during the Japanese colonial period, Homeward Bound moved the Korean public and secured support through news funding, YouCanFund, text-message donations, and more, receiving contributions from over 70,000 people. As news of crowdfunding spread, it also became publicity in itself, making it a landmark success story for crowdfunding films.

In addition, independent publications across a wide range of genres often succeed on creator-focused crowdfunding platforms like Tumblebug. In 2018 alone, 687 publishing projects were successfully funded on Tumblebug.

If any of you are artists looking to start a new creative business, we recommend using crowdfunding platforms to connect with the public, secure support, and create the conditions to focus on your work so you can build a more sustainable cultural content business.

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Fashion Launches: From Wallets to Handmade Shoes to Coats

New fashion brands often faced a dilemma: they lacked the budget to produce high-cost items, but increasing production to lower unit costs created inventory risk.

Crowdfunding helped solve that problem by letting brands gauge demand first, reducing inventory worries and raising funds in advance, which allowed more creators to launch brands! Many emerging brands also built strong bonds with backers by making quality products and clearly communicating brand purpose and messaging that could not be fully expressed in ordinary commerce.

If you’re interested in starting a business, this is a must-read: Subscription Services: An Excellent Customer-Centric Business Opportunity

Lifestyle: From What We Eat to What We Use

From vegan bakeries, traditional liquors, and flavored teas to smart scales and silicone straws, many ideas closely tied to everyday life are also being brought to life through crowdfunding.

Still not sure what this looks like? Then think of Lalasweet. The low-calorie ice cream brand you can now easily find at E-Mart and 7-Eleven was also first produced through crowdfunding. Many backers were moved by Lalasweet’s vision of offering “healthy sweetness” to people who want something sweet but worry about health and weight, and that support helped create the dessert brand that is now on the rise.

If you’re interested in package production, be sure to read: Unboxing – A Surprisingly New Marketing Trend of Our Time!

3. To Succeed at Crowdfunding:

No matter the field—independent creative works, food, fashion accessories, and more—successful crowdfunding projects shared one major trait. They had a clear answer to the question: What message is this project trying to convey?

Storytelling – Build Affection for the Creator!

Projects ranging from environmentally friendly products and publications about upcycling to ideas that think about the planet were launched to make the world we live in a little cleaner. Projects aimed at improving awareness and empathy around beloved pets also struck a chord. Many projects focused on human rights, such as refugees, feminism, and LGBT+, also found success.

If you’re working on package design, 참고: How Brand Storytelling on Packaging Influences Consumers’ Purchase Decisions

So does that mean you should aim for ethical consumption? Let’s look a little deeper. Consider the independently developed font Dalssulche, which carries a traditional Korean feel; publications introducing Korea’s traditional colors; and the album Kim Yelim of Mystic released as Lim Kim after breaking her hiatus.

The essence of crowdfunding success is capturing the creator’s own heart and goals and making it possible for backers to empathize with them. If you can go beyond empathy and create natural conversations on social media like Instagram and Twitter, that would be even better.

Rewards – Give Backers Benefits They’ll Find Attractive

You need to give investors a reason to allocate money to this project right now. A simple example would be offering early-bird perks or other price-based promotions that encourage them to click and back the project immediately.

But even more important is designing the actual rewards to be appealing, right? No matter how low the price is, if the reward is something no one would want to waste a single penny on, no one will want the benefit. So how can you make your rewards even more desirable? The easiest example is to create beautiful packaging!

Take, for example, the Geunjeongjeon design tape project on Tumblebug, which recently reached 2,804% of its funding goal. It first won over Korean backers by conveying the message of embracing our cultural heritage from a new perspective through Korean-inspired patterns on tape. It then designed an attractive reward by incorporating the patterns found in Geunjeongjeon into masking tape.

But what tied it all together was the tape box shaped like Geunjeongjeon itself!

If the packaging for the tape had just been a plain white box, could it really have become that popular? You need to understand that a well-designed box is not merely a container for the product, but part of the value consumers want to get when they make a purchase.

Source | Studio SADRAC²

So if you’re planning a reward-based crowdfunding campaign, create rewards and packaging that match your brand with Packative, win over backers, and build a brand image that keeps their attention for longer!