Just about all crowdfunding platforms require you to disclose the risks of backing a crowdfunding campaign should it meet or exceed the goal. All ambitious ideas are just ideas and as good as these ideas look on paper, the harsh reality is that the execution could be tricky. Even if you think you have everything all figured out down to the numbers on a spreadsheet you worked on for weeks, there is always that possibility for something to go wrong. But at the same time, you don’t want to say too much to the point that potential backers will shy away from your campaign. Here’s how you can be honest about the whole thing while making the crowdfunding campaign professional and still attractive.
Only Disclose the Risks in the Appropriate Section
The main bulk of your crowdfunding page should be all about goals, ambitions, positive stuff and possibly a little bit of hype. You want to raise thousands of dollars on something in a matter of weeks or months so you need to pull out all the stops in drumming up support. Don’t kill the mood by adding ways the project can fail in the presentation video or right after your killer advertising pitch. Avoid putting “if” statements in parenthesis such as “If the manufacturers do their part, you will get a ______.” Risks belong on the very bottom of the crowdfunding page. Anybody who reads this part should know how cool your crowdfunding pitch is. Readers will interpret the risks posted on the bottom as a sign of honesty and not a lack of confidence.
Identify the Key Areas that Have a Chance of Failing and could Jeopardize the Entire Project
A lot can go on from the start of a fully funded project to its first release to backers. To make everything easier to digest, make a flowchart highlighting each phase and analyze these phases one by one. Come up with positive outcomes of each phase along with an estimated percentage. If there is a huge chance something unfavorable will surface, analyze that scenario further and see if it will affect the project as a whole. These are the risks you should disclose first so you can be excused from that liability should it ever happen. For instance, if a phase of creating a mobile app for a project involves hiring a lead programmer, you should disclose the possibility of delays or cancellation if issues arise with the lead programmer. You don’t have to address this if you have an in-house programmer or if you are an experienced programmer.
If you are uncertain on how you should properly present these risks, feel free to check out the most successful crowdfunding campaigns and see how they present them.