What Happens If A GoFundMe Doesn’t Reach Its Goal?
GoFundMe is one of the largest donation sites in the US. Thousands of individuals use the platform to raise funds for personal needs, business development, and charity. Many start-ups consider crowdfunding, adding whether or not to go this route to their list of questions to ask a startup advisor. It’s an easy opportunity to raise money for what startups use funding for—at almost no cost to the business. Not only does GoFundMe help raise financial capital, but it helps promote the brand to the market as friends and strangers circulate the campaign among their circles.
Setting up a campaign is simple. You set a goal, tell your story,and then share a link with others. From there, people can begin donating money. You keep every donation you receive (minus the fees) even if you don’t reach your target amount.
How Does GoFundMe Work?
Anyone can run a GoFundMe campaign. After signing up on the platform, you can tell your story (i.e. why you’re raising funds) and set a goal. You can then personalize your fundraiser and share the link to your donation site with others.
The online campaign can be active for however long you like, even after you’ve already met your target. Even if you don’t reach your goal, you can withdraw every cent, minus the transaction fees. This is unlike other donation platforms that take an all-or-nothing approach, meaning you can only receive the donations if you reach your target.
It’s free to sign up and start a campaign on GoFundMe. However, the platform does take 2.9% plus $0.30 on every donation as a transaction fee, which is subtracted from the total amount received by the beneficiary.
Can You Use GoFundMe to Finance a Start-up?
Many start-ups have used GoFundMe as a way to raise funds and promote their product. They explain their vision, talk about their product, and appeal to people to donate to help them bring their business to life. This usually starts with a network of friends and family, but support can come from people all over the world.
How to Run a Successful GoFundMe for a Start-up
You can’t just start a GoFundMe and expect it to raise money passively. You have to convince people to donate to your cause, and you have to make an effort to circulate the campaign. Think of it like a sales pitch blended with some marketing.
Here are some tips to running a successful GoFundMe:
Set a Realistic Goal
Though you don’t need to reach a goal to withdraw funds from GoFundMe, don’t set a target amount that's too high, especially if you can’t back it up with information on how donations will be spent. Break down how much you need to start or sustain operations, while taking into account other sources of funding. It would even be helpful to disclose this information to potential donors.
If you need more funds later on, you can always adjust the goal amount at a later date.
Tell a Good Story
Design your GoFundMe page so that it shows the value of your start-up, taking care to answer all questions you may encounter. Show people how passionate you are about your idea, and give them a picture of how you’re planning to achieve your business goals so that they can better relate to the concept.
It helps to look at other similar successful GoFundMe stories to see what works.
Update Your Fundraiser Regularly
Be accountable and update your donors about how their money is being spent. Bring your supporters along for the journey with stories, pictures and videos through connected channels such as social media, YouTube, and emails.
Share, Share, Share
Share your campaign with everyone—starting with your own network. Share it with family and friends, and encourage them to pass the campaign along to help get it to a larger network of potential donors. If you can, get it to larger channels or even the press.
Final Thoughts
GoFundMe is a great platform to raise money for various causes, and it’s a viable option for start-ups needing to acquire funds to reach their business goals. It’s easy-to-use and costs almost nothing to set up and sustain, but it does require a bit of work to make it successful. That said, don’t worry about having to reach your target goal—it’s adjustable. And you get every donation (minus the fees) regardless of whether or not you hit your goal!