Probably the most successful donations crowdfunding campaign is the ALS Ice Bucket Challenge (#ChallengeALS). It was as simple as pouring ice water on your head, recording and challenging your friends to do the same and it becomes very successful.

If you would like to setup your own crowdfunding campaign based on equity, it maybe interesting to analyze the Ice Bucket Challenge. At first what is the difference between donations- and equity crowdfunding? A crowdfunding campaign based on donations means that the backers don’t expect anything back. In case of equity crowdfunding, the backers will get equity for example in the form of a share or more practical with convertible notes.

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The ALS Ice Bucket Challenge raised money over $100 million for amyotrophic lateral sclerosis (ALS), the lethal neurodegenerative disorder also known as Lou Gehrig’s disease, the ALS Association. (source: ibtimes.com)

Probably you didn’t even recognize it, as you didn’t need Kickstarter or another crowdfunding platform for it but the ALS Ice Bucket Challenge is a crowdfunding/crowd-sourcing initiative.

Something as simple as pouring ice water on your head, recording and challenging your friends to do the same has turned into a viral, word-of-mouth sensation. The ALS ice bucket challenge encourages creativity, altruism, and awareness. Sure, there is comedic relief in watching friends, family and celebrities pour ice water on their heads, but the real success is in raising awareness for Lou Gehrig’s disease and encouraging participants to donate money.

Why is this chilling phenomena so successful, and how do companies create similar, successful crowdfunding(sourcing) initiatives?

Social Proof (viral)
Social influence drives social epidemics. People assume the actions of others in an attempt to exhibit the correct behavior for certain situations. As more celebrities, friends and family participate in the challenge, so too does the next challenger, and the next challenger, and so on, conforming to the behavior of the crowd.

And can we get our Equity Crowdfunding, Social proof?
You can challenge backers for example to ask them to contribute with idea’s to solve a certain problem. If you challenge them you can ask the backers to invite more likeminded and generate idea’s for a solution together. This is actually crowd-sourcing.

Transfer of Control.
Each donor and participant in the challenge holds the power. They have the ability to choose who they want to challenge and the challenger has the option to choose if they want to accept the challenge, donate, and who they want to pass it on to. The power is in the crowd and the crowd is more powerful than any brand.

How we can we use Transfer of Control in Equity Crowdfunding?
This may be difficult. On one side it should be voluntary but there should be a drive or an offer you can’t refuse. Besides of that a contract is required as the donation needs to be transformed to equity which makes it more difficult.

Share Experiences.
There is no clicking a button, donating $100 and never looking back. The Ice Bucket Challenge is a refreshing, chilling experience to share with friends and family. Post it on Twitter or Facebook and then your entire social network can share in on the experience as well. Sharing memories and experience is a powerful force, as human capital drives influence.
Source: arise.com

How to create a refreshing, chilling experience to share in Equity Crowdfunding?
This requires creativity and is probably often not really possible. Besides operating without any platform (only credit card or bank account needed) makes it even more challenging. Running crowdfunding without a platform is nice but not needed. Using existing crowdfunding platforms, is re-using experiences and a way to simplify the process.

Then about the content of the campaign. The content is very important in crowdfunding campaigns. In the Ice Bucket Challenge the backers created their own content, which is an ideally situation. Let’s see how the Ice Bucket Challenge made their content contagious. See also my previous posts:
How to make travel content contagious? with help from @BrianKSullivan and Jonah Berger and Contagious content: Kim Kardashian #BreakTheInternet.

1. Social Currency
If you are famous it would be hard not to join Ice Bucket Challenge. It is almost obligated. If you are not famous you are “hot” if you join all these famous people and donate money.

2. Triggers
If you are famous, undoubtedly you will be challenged. As soon as you are challenged you don’t have choice. For less famous people there is the same trigger but probably less social pressure.

3. Emotion
You help people with the ALS disease. You even experience what ALS patients experiences every day. It is all about awe (combination of surprise and fear). Probably you may be surprised how ALS people are living but you would never like to get the disease yourself. Awe is the most viral emotion.

4. Public
The world population is the public. If famous people all over the world join the challenge, the public becomes very wide.

5. Practical Value
Donation to ALS foundation is very practical. Besides that you help people with ALS disease, you help yourself in case you will get ALS.

6. Stories
The challenge becomes a story as it is so extreme viral. The story creates more virality.

Now back to equity crowdfunding. How can we ‘translate’ there learning’s for equity crowdfunding maybe in relation with crowd-sourcing. Getting practical value is the easiest to make the content of a crowdfunding campaign contagious. The public will be probably much smaller so you need to think where, how and when to reach them.

Social currency will also go back to currency, as the backers will see it also as an investment. But still Social currency is very important because the campaign contains triggers to make it share worthy or #BeShareWorthy (see also Coca cola content marketing: linked & liquid). Probably combine it with crowd-sourcing, so creating the product or service together would make it more viral.

And last but not least, stories. To make a story, like give a picture of the problem and its consequences will not be difficult, but if it needs to be cached up by social media and public relation channels the social currency and triggers need to be working.

What to learn from the ALS Ice Bucket Challenge for equity #Crowdfunding?
Solving a problem, a certain audience (public) experience and involve this audience in the solution, so actually combine crowdfunding with crowd-sourcing. This way there is more change make the campaign social proof and transfer somehow the control to the backers.

To make content contagious crowd-sourcing may be a good solution. You need to focus on the right audience (public). Create besides currency in equity, social currency by solving a problem together with a trigger to share with backers who may like or really need to help solving the problem. This will make the campaign viral.

The challenge will be to create a refreshing, chilling experience for the backers. From content perspective you need to make it emotional (like the altruism in the Ice Bucket Challenge). If it works you get the stories itselves. But here it needs a lot of your creativity.

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