SlideShare a Scribd company logo

Why The Majority Of Crowdfunding Campaigns Fails

More than half of Kickstarter campaigns fail to reach their crowdfunding goal. The presentation examines the reasons for that and suggest the steps to be taken to improve your chances to succeed.

1 of 22
Download to read offline
Elena Mikhaylova 
Davinci Institute 
September, 2014
Current Success Rate on Kickstarter 
is below 44%. 
For the majority of other platforms it is even lower. 
Most campaigns fail 
Even before they go live on a crowdfunding 
platform 
The main reason – 
lack of preparation
How long does it take to get ready?
It Depends: 
 On your funding goal 
 On the size of your social network 
 On your expertise 
 On your resources (time, team, money) 
Six weeks to six months
Why Crowdfund 
 Marketing 
 Beta-Testing, Crowdsourcing 
 Pre-Sales, Customer Engagement 
 Market Validation for the Next Funding Round
4 Types of Crowdfunding 
 Donations – money is provided for worthy causes, non-profits or people in need. 
There is no expectation for return. 
 Rewards – money is given in exchange for “perks”. The most popular one is the 
copy of the product to be created as a result of the CF campaign. 
 Equity - funds are invested in exchange for the company’s shares or participation in 
the future profits. 
 Debt (P2P and P2B) – funds are provided in return for interest payments.

Recommended

Kickstarter and its alternatives: How to choose the right platform for YOUR c...
Kickstarter and its alternatives: How to choose the right platform for YOUR c...Kickstarter and its alternatives: How to choose the right platform for YOUR c...
Kickstarter and its alternatives: How to choose the right platform for YOUR c...Elena Mikhaylova
 
The ultimate guide to crowdfunding for creative ideas
The ultimate guide to crowdfunding for creative ideasThe ultimate guide to crowdfunding for creative ideas
The ultimate guide to crowdfunding for creative ideasDream Wallets
 
Crowdfunding
CrowdfundingCrowdfunding
CrowdfundingLinhLe388
 
Reward Based Crowdfunding
Reward Based CrowdfundingReward Based Crowdfunding
Reward Based CrowdfundingDream Wallets
 
Social Media as Focus Group: Tapping Into a Vast Resource, Privately
Social Media as Focus Group: Tapping Into a Vast Resource, PrivatelySocial Media as Focus Group: Tapping Into a Vast Resource, Privately
Social Media as Focus Group: Tapping Into a Vast Resource, PrivatelyVivastream
 
DC Fundraising Summit
DC Fundraising SummitDC Fundraising Summit
DC Fundraising SummitAshley Donald
 
Maitland Recommendation Letter
Maitland Recommendation LetterMaitland Recommendation Letter
Maitland Recommendation LetterAnnelies Bos
 

More Related Content

Similar to Why The Majority Of Crowdfunding Campaigns Fails

Kickstarter and its alternatives (other crowdfunding platforms and DIY crowd ...
Kickstarter and its alternatives (other crowdfunding platforms and DIY crowd ...Kickstarter and its alternatives (other crowdfunding platforms and DIY crowd ...
Kickstarter and its alternatives (other crowdfunding platforms and DIY crowd ...Crowdfund Productions, LLC
 
Crowdfunding 101
Crowdfunding 101Crowdfunding 101
Crowdfunding 101ktulusan
 
Introduction to Crowd funding
Introduction to Crowd funding  Introduction to Crowd funding
Introduction to Crowd funding Isru
 
5 dg corporate pres version 1.01.02
5 dg corporate pres version 1.01.025 dg corporate pres version 1.01.02
5 dg corporate pres version 1.01.02Sanjay Bhardwaj
 
Crowdfunding
CrowdfundingCrowdfunding
CrowdfundingHome
 
Crowdfunding: Grandma’s not the only one with the checkbook.
Crowdfunding: Grandma’s not the only one with the checkbook.Crowdfunding: Grandma’s not the only one with the checkbook.
Crowdfunding: Grandma’s not the only one with the checkbook.Cheryl Lawson
 
NACCDO Crowdfunding Cincotti-Eller
NACCDO Crowdfunding Cincotti-EllerNACCDO Crowdfunding Cincotti-Eller
NACCDO Crowdfunding Cincotti-EllerPAN - NACCDO
 
Crowdfunding Your Fundraising: Growing Your Donor Pipeline
Crowdfunding Your Fundraising: Growing Your Donor PipelineCrowdfunding Your Fundraising: Growing Your Donor Pipeline
Crowdfunding Your Fundraising: Growing Your Donor PipelineMcCabe Callahan
 
crowd funding document for workshops sep 2016
crowd funding document for workshops sep 2016crowd funding document for workshops sep 2016
crowd funding document for workshops sep 2016Karen Melonie Gould
 
A brief introduction to online crowdfunding - presentation by Becky Pickin
A brief introduction to online crowdfunding - presentation by Becky PickinA brief introduction to online crowdfunding - presentation by Becky Pickin
A brief introduction to online crowdfunding - presentation by Becky PickinDudleyCVS
 
Making the Crowdfunding Experiment Work for Your Organization
Making the Crowdfunding Experiment Work for Your OrganizationMaking the Crowdfunding Experiment Work for Your Organization
Making the Crowdfunding Experiment Work for Your OrganizationGOODcorps
 
EIA2018Italy - Alberto Giusti - Crowdchain: The New Species of Fundraising
EIA2018Italy - Alberto Giusti - Crowdchain: The New Species of FundraisingEIA2018Italy - Alberto Giusti - Crowdchain: The New Species of Fundraising
EIA2018Italy - Alberto Giusti - Crowdchain: The New Species of FundraisingEuropean Innovation Academy
 
Ncfa Craig Asano Jan 8 equity and funding presentation
Ncfa Craig Asano Jan 8 equity and funding presentationNcfa Craig Asano Jan 8 equity and funding presentation
Ncfa Craig Asano Jan 8 equity and funding presentationCraig Asano
 
CSI_HiveWire_Crowdfunding_Guide 2015
CSI_HiveWire_Crowdfunding_Guide 2015CSI_HiveWire_Crowdfunding_Guide 2015
CSI_HiveWire_Crowdfunding_Guide 2015Felix Whitton
 
Intro to crowdfunding
Intro to crowdfundingIntro to crowdfunding
Intro to crowdfundingLisa Colton
 

Similar to Why The Majority Of Crowdfunding Campaigns Fails (20)

Kickstarter and its alternatives (other crowdfunding platforms and DIY crowd ...
Kickstarter and its alternatives (other crowdfunding platforms and DIY crowd ...Kickstarter and its alternatives (other crowdfunding platforms and DIY crowd ...
Kickstarter and its alternatives (other crowdfunding platforms and DIY crowd ...
 
Crowdfunding 101
Crowdfunding 101Crowdfunding 101
Crowdfunding 101
 
Oomi crowdfunding
Oomi crowdfundingOomi crowdfunding
Oomi crowdfunding
 
Introduction to Crowd funding
Introduction to Crowd funding  Introduction to Crowd funding
Introduction to Crowd funding
 
5 dg corporate pres version 1.01.02
5 dg corporate pres version 1.01.025 dg corporate pres version 1.01.02
5 dg corporate pres version 1.01.02
 
Crowdfunding
CrowdfundingCrowdfunding
Crowdfunding
 
Crowdfunding: Grandma’s not the only one with the checkbook.
Crowdfunding: Grandma’s not the only one with the checkbook.Crowdfunding: Grandma’s not the only one with the checkbook.
Crowdfunding: Grandma’s not the only one with the checkbook.
 
9 finding the money
9   finding the money9   finding the money
9 finding the money
 
Crowd funding
Crowd fundingCrowd funding
Crowd funding
 
NACCDO Crowdfunding Cincotti-Eller
NACCDO Crowdfunding Cincotti-EllerNACCDO Crowdfunding Cincotti-Eller
NACCDO Crowdfunding Cincotti-Eller
 
Crowdfunding 2015 UNIDO Conference
Crowdfunding 2015 UNIDO ConferenceCrowdfunding 2015 UNIDO Conference
Crowdfunding 2015 UNIDO Conference
 
Crowdfunding Your Fundraising: Growing Your Donor Pipeline
Crowdfunding Your Fundraising: Growing Your Donor PipelineCrowdfunding Your Fundraising: Growing Your Donor Pipeline
Crowdfunding Your Fundraising: Growing Your Donor Pipeline
 
crowd funding document for workshops sep 2016
crowd funding document for workshops sep 2016crowd funding document for workshops sep 2016
crowd funding document for workshops sep 2016
 
A brief introduction to online crowdfunding - presentation by Becky Pickin
A brief introduction to online crowdfunding - presentation by Becky PickinA brief introduction to online crowdfunding - presentation by Becky Pickin
A brief introduction to online crowdfunding - presentation by Becky Pickin
 
Making the Crowdfunding Experiment Work for Your Organization
Making the Crowdfunding Experiment Work for Your OrganizationMaking the Crowdfunding Experiment Work for Your Organization
Making the Crowdfunding Experiment Work for Your Organization
 
EIA2018Italy - Alberto Giusti - Crowdchain: The New Species of Fundraising
EIA2018Italy - Alberto Giusti - Crowdchain: The New Species of FundraisingEIA2018Italy - Alberto Giusti - Crowdchain: The New Species of Fundraising
EIA2018Italy - Alberto Giusti - Crowdchain: The New Species of Fundraising
 
Ncfa Craig Asano Jan 8 equity and funding presentation
Ncfa Craig Asano Jan 8 equity and funding presentationNcfa Craig Asano Jan 8 equity and funding presentation
Ncfa Craig Asano Jan 8 equity and funding presentation
 
Funding v2
Funding v2Funding v2
Funding v2
 
CSI_HiveWire_Crowdfunding_Guide 2015
CSI_HiveWire_Crowdfunding_Guide 2015CSI_HiveWire_Crowdfunding_Guide 2015
CSI_HiveWire_Crowdfunding_Guide 2015
 
Intro to crowdfunding
Intro to crowdfundingIntro to crowdfunding
Intro to crowdfunding
 

More from Crowdfund Productions, LLC

Gender in Crowdfunding (Based on Kickstarter Data)
Gender in Crowdfunding (Based on Kickstarter Data)Gender in Crowdfunding (Based on Kickstarter Data)
Gender in Crowdfunding (Based on Kickstarter Data)Crowdfund Productions, LLC
 
Crowdfunding Wearable Technologies on Kickstarter and Indiegogo
Crowdfunding Wearable Technologies on Kickstarter and IndiegogoCrowdfunding Wearable Technologies on Kickstarter and Indiegogo
Crowdfunding Wearable Technologies on Kickstarter and IndiegogoCrowdfund Productions, LLC
 
Crowdfunding Platform OurCrowd - General Electric Partnership
Crowdfunding Platform OurCrowd - General Electric PartnershipCrowdfunding Platform OurCrowd - General Electric Partnership
Crowdfunding Platform OurCrowd - General Electric PartnershipCrowdfund Productions, LLC
 
Crowdfunding for Large Corporations and Professional Investors
Crowdfunding for Large Corporations and Professional InvestorsCrowdfunding for Large Corporations and Professional Investors
Crowdfunding for Large Corporations and Professional InvestorsCrowdfund Productions, LLC
 

More from Crowdfund Productions, LLC (16)

Use Crowdfunding to Grow Your Blog Influence
Use Crowdfunding to Grow Your Blog InfluenceUse Crowdfunding to Grow Your Blog Influence
Use Crowdfunding to Grow Your Blog Influence
 
Virtual Reality In Healthcare
Virtual Reality In HealthcareVirtual Reality In Healthcare
Virtual Reality In Healthcare
 
Asian Technology Projects on Kickstarter
Asian Technology Projects on KickstarterAsian Technology Projects on Kickstarter
Asian Technology Projects on Kickstarter
 
Kickstarter Crowdfunding Community
Kickstarter Crowdfunding CommunityKickstarter Crowdfunding Community
Kickstarter Crowdfunding Community
 
Kickstarter 2015
Kickstarter 2015Kickstarter 2015
Kickstarter 2015
 
Gender in Crowdfunding (Based on Kickstarter Data)
Gender in Crowdfunding (Based on Kickstarter Data)Gender in Crowdfunding (Based on Kickstarter Data)
Gender in Crowdfunding (Based on Kickstarter Data)
 
Crowdfunding Wearable Technologies on Kickstarter and Indiegogo
Crowdfunding Wearable Technologies on Kickstarter and IndiegogoCrowdfunding Wearable Technologies on Kickstarter and Indiegogo
Crowdfunding Wearable Technologies on Kickstarter and Indiegogo
 
Kickstarter Code 2014
Kickstarter Code 2014Kickstarter Code 2014
Kickstarter Code 2014
 
Crowdfunding Options for Entrepreneurs
Crowdfunding Options for EntrepreneursCrowdfunding Options for Entrepreneurs
Crowdfunding Options for Entrepreneurs
 
Crowdfunding Platform OurCrowd - General Electric Partnership
Crowdfunding Platform OurCrowd - General Electric PartnershipCrowdfunding Platform OurCrowd - General Electric Partnership
Crowdfunding Platform OurCrowd - General Electric Partnership
 
Crowdfunding Campaign Tools and Resources
Crowdfunding Campaign Tools and ResourcesCrowdfunding Campaign Tools and Resources
Crowdfunding Campaign Tools and Resources
 
Crowdfunding for Large Corporations and Professional Investors
Crowdfunding for Large Corporations and Professional InvestorsCrowdfunding for Large Corporations and Professional Investors
Crowdfunding for Large Corporations and Professional Investors
 
Crowdfunding with self directed IRA
Crowdfunding with self directed IRACrowdfunding with self directed IRA
Crowdfunding with self directed IRA
 
Ron Suber - Prosper
Ron Suber - ProsperRon Suber - Prosper
Ron Suber - Prosper
 
Brian Korn - Equity Crowdfunding Legal Aspect
Brian Korn - Equity Crowdfunding Legal AspectBrian Korn - Equity Crowdfunding Legal Aspect
Brian Korn - Equity Crowdfunding Legal Aspect
 
Crowdfunding developments by Daryl Montgomery
Crowdfunding developments by Daryl MontgomeryCrowdfunding developments by Daryl Montgomery
Crowdfunding developments by Daryl Montgomery
 

Recently uploaded

墨尔本大学毕业证制作流程unimelb毕业证文凭学历学位认证
墨尔本大学毕业证制作流程unimelb毕业证文凭学历学位认证墨尔本大学毕业证制作流程unimelb毕业证文凭学历学位认证
墨尔本大学毕业证制作流程unimelb毕业证文凭学历学位认证8cuw8kc0
 
VENTURE CAPITAL FINANCING - CONCEPT, PURPOSE AND SCHEMES. pptx
VENTURE CAPITAL FINANCING - CONCEPT, PURPOSE AND SCHEMES. pptxVENTURE CAPITAL FINANCING - CONCEPT, PURPOSE AND SCHEMES. pptx
VENTURE CAPITAL FINANCING - CONCEPT, PURPOSE AND SCHEMES. pptxVISHALI SELVAM
 
宾州州立大学毕业证制作流程PSU毕业证文凭学历学位认证
宾州州立大学毕业证制作流程PSU毕业证文凭学历学位认证宾州州立大学毕业证制作流程PSU毕业证文凭学历学位认证
宾州州立大学毕业证制作流程PSU毕业证文凭学历学位认证8cuw8kc0
 
Small startups can be big too by Adrian Marin
Small startups can be big too by Adrian MarinSmall startups can be big too by Adrian Marin
Small startups can be big too by Adrian MarinAdrianMarin52
 
Cell C Dream Team Training Doc 2024.pdf
Cell C Dream Team Training Doc 2024.pdfCell C Dream Team Training Doc 2024.pdf
Cell C Dream Team Training Doc 2024.pdfAnga Jubase
 
INNOVATION - PRINCIPLES OF INNOVATION .pptx
INNOVATION - PRINCIPLES OF INNOVATION .pptxINNOVATION - PRINCIPLES OF INNOVATION .pptx
INNOVATION - PRINCIPLES OF INNOVATION .pptxVISHALI SELVAM
 

Recently uploaded (6)

墨尔本大学毕业证制作流程unimelb毕业证文凭学历学位认证
墨尔本大学毕业证制作流程unimelb毕业证文凭学历学位认证墨尔本大学毕业证制作流程unimelb毕业证文凭学历学位认证
墨尔本大学毕业证制作流程unimelb毕业证文凭学历学位认证
 
VENTURE CAPITAL FINANCING - CONCEPT, PURPOSE AND SCHEMES. pptx
VENTURE CAPITAL FINANCING - CONCEPT, PURPOSE AND SCHEMES. pptxVENTURE CAPITAL FINANCING - CONCEPT, PURPOSE AND SCHEMES. pptx
VENTURE CAPITAL FINANCING - CONCEPT, PURPOSE AND SCHEMES. pptx
 
宾州州立大学毕业证制作流程PSU毕业证文凭学历学位认证
宾州州立大学毕业证制作流程PSU毕业证文凭学历学位认证宾州州立大学毕业证制作流程PSU毕业证文凭学历学位认证
宾州州立大学毕业证制作流程PSU毕业证文凭学历学位认证
 
Small startups can be big too by Adrian Marin
Small startups can be big too by Adrian MarinSmall startups can be big too by Adrian Marin
Small startups can be big too by Adrian Marin
 
Cell C Dream Team Training Doc 2024.pdf
Cell C Dream Team Training Doc 2024.pdfCell C Dream Team Training Doc 2024.pdf
Cell C Dream Team Training Doc 2024.pdf
 
INNOVATION - PRINCIPLES OF INNOVATION .pptx
INNOVATION - PRINCIPLES OF INNOVATION .pptxINNOVATION - PRINCIPLES OF INNOVATION .pptx
INNOVATION - PRINCIPLES OF INNOVATION .pptx
 

Why The Majority Of Crowdfunding Campaigns Fails

  • 1. Elena Mikhaylova Davinci Institute September, 2014
  • 2. Current Success Rate on Kickstarter is below 44%. For the majority of other platforms it is even lower. Most campaigns fail Even before they go live on a crowdfunding platform The main reason – lack of preparation
  • 3. How long does it take to get ready?
  • 4. It Depends:  On your funding goal  On the size of your social network  On your expertise  On your resources (time, team, money) Six weeks to six months
  • 5. Why Crowdfund  Marketing  Beta-Testing, Crowdsourcing  Pre-Sales, Customer Engagement  Market Validation for the Next Funding Round
  • 6. 4 Types of Crowdfunding  Donations – money is provided for worthy causes, non-profits or people in need. There is no expectation for return.  Rewards – money is given in exchange for “perks”. The most popular one is the copy of the product to be created as a result of the CF campaign.  Equity - funds are invested in exchange for the company’s shares or participation in the future profits.  Debt (P2P and P2B) – funds are provided in return for interest payments.
  • 8. Is your project a good match for rewards crowdfunding?  B2C  Reasonably affordable for general public  Easy to understand value for large groups of people  Can create strong emotions/connection/”cool” image  Can build a community around the project
  • 9. Planning What: how lucrative is your product/project? When: season, how much time do you need to get ready, how long is the live campaign? Who: your target group/groups – demographics, geography, lifestyle How: marketing channels, influencers
  • 10. these websites provide free or inexpensive solutions for independent fundraisers: SelfStarter – free open source software to build your own crowdfunding website. The latest famous project, Tile, raised $2.6M in July from almost 50,000 backers, CrowdHoster – an application hosted by CrowdTilt; currently. The most famous success story – Soylent.me campaign which has raised over $1M, CrowdfundingSite.net – license plans start from $129 or $328 per year, IgnitionDeck –WordPress framework, starting from $79 for unlimited websites, Mimoona – Plug&Fund app, three monthly payment plans, ITPrism.com – crowdfunding open source software for Joomla; free and PRO versions Celery – platform to accept and manage pre-orders on Wordpress, Tumbrl, Shopify and other websites; 2% per transaction plus PayPal fees. http://www.crowdfundproductions.com/kickstarter-alternatives/
  • 11. Top Mistakes  Not doing your homework: research other projects, their perks, video, media, comments, etc.  Not building your crowd in advance: nothing can be more miserable than a creator launching the project and waiting for the crowd to rush with the money. Fake fans/followers/pledges  Not preparing your media outreach, spamming your network  Not having three plans  Not making a budget and sticking to it. Decide if your goal is mostly fundraising or marketing.  Not getting feedback for your perks in advance
  • 12. Planning - Perks  Importance of small perks  Most popular  Depends on your target group - amount  Depends on your target group – lifestyle  Geography – shipping costs, taxes
  • 13. Planning - Budget  An Avg. Successful Project on Kickstarter – below $10,000  Necessary Minimum/Stages  How much can you REALISTICALLY raise? - 30% Rule  How much do you need to raise (on top of your project costs): platform fee (4%-9%), payment processor fee (3.9% -5%), cost of production, packaging and shipment for your perks, marketing costs, canceled pledges, returns, taxes
  • 14. Kickstarter • Founded in 2009 in New York City • Available for US, UK, Canada, Australia, New Zealand and Netherlands residents, • Creative projects in 15 categories • All-or-Nothing Funding • Almost 7M Backers • 80 projects – raised over $1,000,000 • Most successful project – Coolest Cooler– over $13M
  • 15. Kickstarter (cont.) • Approval process • Projects only • Prohibited uses (including causes or personal needs) • Fees: 5% Kickstarter plus Amazon payments (US) or Credit Card fees -3-5%. Zero, if the project failed. • Must have rewards • Donations between $1 and $10,000 (in the US) • If a project succeeded, the money usually is available in 2-3 weeks after the end of the campaign
  • 17. Live Campaign: Common Mistakes  Video – too long, not to the point, doesn’t tell a story  Description – too long, not enough visuals, doesn’t create trust (timeline, budget)  Talking about yourself instead of the benefits for potential backers and partners  No plan for stretch goals  Lack of updates, communications with the backers  No plan for keeping a momentum  Spamming
  • 18. What do you need to say? • This is our product • This is how you are going to benefit from it • Call to action • This is our story (how/why we came up with the idea) • This is how it works • This is how we are going to use the funds • This is the timeline • This is our team http://www.crowdcrux.com/red-flags-to-avoid-crowdfunding-scams-and-con-artists/
  • 19. Not monitoring and adjusting your action plan Outsourcing, dropping off your communications with the backers after the end of your campaign Not understanding campaign dynamics. Strong start by your own connections - the Kickstarter community -media coverage - strangers. The more backers you bring – the stronger will be support from the crowdfunding platform itself.
  • 20. Money raised: strangers vs your own connections More than 80% of all Kickstarter campaigns raise below $10,000 The smaller the amount you are raising, the more you depend on your own network  Up to $5,000 – 80-90% from your connections  $30,000-$50,000 – 20-40% from your connections  $100,000+ - 10-15% from your own connections
  • 21. Post Campaign Campaign and Data Analysis Communications with backers and media Perks fulfillment Your Campaign Hasn’t Succeeded Until You Deliver The Perks To Every Backer
  • 22. Contact me Website: www.CrowdfundProductions.com Email: info@crowdfundproductions.com LinkedIn: www.linkedin.com/in/elenamikhaylova1/ Skype: Alive_Digital Twitter: @Alive_Digital