Crowdfunding has been one of the best things ever to happen to artists and entrepreneurs.
Every year since 2010 artists have received more funds from crowdfunding than they have from the National Endowment of Arts. Meanwhile, it’s propelled new businesses, like Oculus Rift, which raised $2.4 million dollars on Kickstarter before being acquired by Facebook for $2 billion; and Pebble, one of the early trendsetters in smartwatches.
This “pennies from many” model allows many more people to pursue their creative and entrepreneurial visions. For prospective entrepreneurs, crowdfunding is an exciting way to generate attention, validate an idea, and perhaps most importantly, raise capital without going into debt.
But running a successful campaign is no walk in the park. That’s why we’ve put together The Ultimate Guide to Crowdfunding as well as Crowdfunding 101, an infographic that gives you an overview of the two major crowdfunding platforms and the characteristics of successful campaigns. You’ll find in these two pieces everything you need to know about the right sort of product to crowdfund and how to transition to an enduring campaign afterwards, with data-driven advice on optimizing your campaign page.
In addition to up-to-date and novel advice, this guide includes in-depth interviews with four entrepreneurs who got their start with successful campaigns. These include interviews with Canary Home Securities, which raised $2 million to become Indiegogo’s most-funded hardware project; and Catan Boards, which raised 1,400% of its funding goal.
Today, we present The Ultimate Guide to Crowdfunding, as well as Crowdfunding 101, an infographic with the data analysis of 400,000 campaigns. Take a look.
Crowdfunding 101 Infographic
Here’s a sampling of some surprising insights.
- When it comes to raising money, women may be better off going to the crowd: 37% of successful campaigns are run by female founders, while only 5% of VC investments go to female founders.
- Though New York City is the top city for crowdfunding pledges, San Francisco punches way above its weight, raising nearly 600% more per capita than NYC.
- Successful campaigns have videos with an average length of 3-minutes-and-4-seconds, offer 9 levels of rewards, and last for 35 days.
- Campaigns on Kickstarter that ask for less than $1,000 have a very high success rate of of 61%.
- As might be expected given Kickstarter’s stricter curation process, much fewer of Indiegogo’s campaigns reach their funding goal. 9.8% of Indiegogo campaigns reach that goal, compared to 43.4% of Kickstarter campaigns. Note also that Indiegogo allows both flexible and fixed funding goals, and in an apples-to-apples comparison of all-or-nothing campaigns, Indiegogo’s success rate is slightly higher at 17.1%.
This is an analysis of all campaigns on Kickstarter and Indiegogo completed by August 7th, 2014. The data is prepared by HiveWire, a crowdfunding solutions company based in Toronto. Take a look at its methodology for how it collected this data.
(Click on the image for a full view.)
The Ultimate Guide to Crowdfunding
The guide is broken up into six sections:
- Where and why to crowdfund, which discusses the benefits of crowdfunding and the characteristics of a product that people will back.
- Setting up your campaign and how to prepare for your launch. Find in this section a downloadable checklist of things to do before you launch. Want to know how to write a good pitch to reporters? Check out the template we wrote and our advice for reaching out.
- Comparison of the major platforms, Kickstarter and Indiegogo, as well as a handy table laying out the features of five different platforms.
- Optimizing every aspect of your campaign backed by data and expert advice: Come find the formula of good crowdfunding videos, and then check out data on a sampling of the most successful campaigns.
- Case studies, with our freewheeling interviews of the founders behind four incredibly successful campaigns: Catan Boards, Hickies, NOMAD, and Canary Home Security. You’ll appreciate the advice of these experts.
- Additional resources, including the infographic presented above.
We hope to reach our goal of helping to launch many more successful campaigns.
Read the Full Guide.
About The Author
Dan Wang is a Shopify Content Specialist studying economics and philosophy at the University of Rochester. Talk to Dan on Twitter.