What are the five biggest mistakes inventors make when crowdfunding?

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We advise on this & offer top tips for product inventors to raise investment by crowdfunding.


1. IP Protection

You have an inspirational idea and need cash to take the development forward. Crowdfunding looks a great solution to raise the capital but before you go public with your idea, make sure it’s protected to avoid others copying. There are several options for protection including patents, registered design, trademarks and copyright. Knowing what, when and where to start can be confusing. For more in-depth advice take a look at IDC’s free Inventors Guide.

2. Planning

Crowdfunders want to invest with confidence and a clear proposal can provide assurance that you know what you're doing, are decisive and on track for success. Can you answer these questions:

  • Is your invention unique?
  • Who would use it?
  • Why will people buy it?
  • What are the risks?
  • What is the cost of development?
  • How will you test and prototype?
  • Do you know the target product cost and profit margin, what is the potential return on investment?
  • How will you reward investors?
If you’re looking to attract high quality investors you should be able to answer all these questions. Transparency about costs and risks will also earn trust from your backers. If you’re unsure where to start with planning, it may be best to seek the advice of a product design consultancy - many offer low cost support and will help get your idea protected in the best possible way. IDC offers an inventors consultation for just £300, refundable against future development work.

3. Publicity

It’s early days, surely you won’t need to be armed with a marketing campaign before you’ve even developed the product? Think again. Even at this early stage you need to be ready to promote your campaign - not necessarily for end sales, but to encourage investors to buy in to your development. Look at all possible channels to promote your campaign and get this in place a few months before you launch the campaign. Don’t forget about your network of family and friends, and take advantage of online resources; from a website, to all forms of social media and bloggers with interest in your area. Explore traditional media, from consumer and trade press to local papers, TV and radio. If you can develop the right angle, you may even get national press involved too. This is a time consuming activity and if you have any spare budget you could get the support of a marketing agency which specialises in publicity for crowdfunding. Make sure you have your public image and pitch in place before you start, which leads to the next point…

4. Visuals

Communicate your idea in the most appealing way - use visual aids and video to demonstrate your pitch and avoid lengthy use of text. Keep it clear and concise. Seek the opinions of people who aren’t linked to the project to be sure you are communicating concepts effectively; making a case for success and motivating viewers to invest. Generate excitement in your (IP protected) product by including concept sketches, CAD designs and eye-catching graphics to show the development process. Video can be especially useful and may be an opportunity to sell yourself as well as your idea. Create a compelling video profile of your past work experience and passion for the project. You should aim to be personable as well as technical to engage your audience.

5. Prototypes

A good prototype can be the key to investment success, and for some crowdfunding platforms like Kickstarter, it's a requirement to include a prototype which demonstrates where you are in the product development process. This could be through a high quality visual model which sells the concept of your invention, or if your engineering and design are further along, a functional model can be really helpful in proving your product technically and creating some excitement. Whatever the stage of development, it's well worth getting a high quality prototype made and this doesn't have to cost the earth. Rapid prototyping technologies have opened up a host of new options for models. Check out IDC Models’ instant online quote system for an idea of the cost of a 3D printed model: www.idcmodels.com.

Good Luck!

These tips will stand you in good stead for your crowdfunding campaign. Make sure you explore all crowdfunding options; as well as traditional crowdfunding platforms where investors expect returns in the form of special perks and rewards, consider the use of relatively new platforms for equity crowdfunding where backers invest their money in return for financial gain or shares. Remember that crowdfunding isn’t for everyone - think about your project funding goals for all stages of the development and review the terms and conditions of each crowdfunding platform before you commit.

1 March 2016