What Do Crowdfunders Look For

Although crowdfunding can potentially be a competitor to Fund-House, in many cases, we recommend to clients that they use crowdfunding for seed money to kick-start their business.

Crowdfunding has been increasing. According to data from Pew Research, in 2015, total funds generated through crowdfunding campaigns totaled over $34 billion - and its grown from there. However, with this growth, it has become more difficult to make sure that your campaign stands-out among the thousands of others vying for funds. To ensure success, or at least, improve your chances, here are several things to do:

PLEDGING

The average pledge amount is approx. $403. What this says is that people are willing to back that amount if they find your 'pitch' has value. So, if possible, center your pledge rewards in the $200-450 range. This will afford you a higher chance of exceeding your funding goal.

Pew Research also found that although large donations are not uncommon, with 21% of funders contributing $51-100 and another giving $101-500 to a single campaign, the vast majority, roughly 49%, contributed a lower amount, $11-50.

The key is to show your value proposition. You must get creative with your reward tiers. Finding the dollar amount that hits the right price point.

HITTING THE RIGHT DEMOGRAPHIC

Male funders far exceeds female backers - about 85% to 15%. Therefore skewing your campaign to men greatly improves your odds of getting the funding you desire. This doesn't mean that the product or service you are pitching must be for men only as a female oriented product will do well if it is viable and compelling. What is does tell you is that in the community of crowdfunding male funders dominate.

Additionally, Pew found that 30% of funders are in the 18-29 age group, with another 27% in the 30-49 group.

RECAP

Getting it right the first time is requisite in crowdfunding. Make sure you are hitting the right demographic, are pledging for the right amounts, and are addressing a male audience - and don't forget about the shipping logistics.

Stay in touch
Jim Lavoarot