The Truth About Crowdfunding

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Those looking to crowdfund the development of their projects, products, or ideas may want to go in another direction, as most crowdfunding campaigns do not meet their fundraising goals.

In fact, between 69 and 89 percent of projects -- depending on the platform -- fail to reach their targets, according to a new reportfrom London-based market research firm The Crowdfunding Centre.

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The study analyzed data for campaigns from five of the largest U.S., U.K. and Canada-based crowdfunding platforms in 2015. Kickstarter, the most noteworthy name in crowdfunding these days, saw just 31 percent of its campaigns reach their fundraising goals in 2015, according to the report. And that was the highest success rate among the five crowdfunding platforms included in the study. 

Twenty-six percent of crowdfunding campaigns on FundRazr met their goals in 2015, and 19 percent of Crowdfunder campaigns meet goals. Indiegogo only had a 13 percent fully-funded success rate and at RocketHub, just 11 percent of campaigns on its platform met their goals.

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Showbox 02-10-2016 10:55 PM

Typically, a Crowdfunding campaign on the model of Do It Yourself (DIY) is an attempt to avoid the platform fee. However, this approach involves considerable risk. Many believe that the DIY model that brings less money and requires more effort. Of course, placing the project on a famous platform facilitates better campaign. But those who are DIY challenged-an approach that ignores the fact that the project placed on their own, often needs independence to develop. In any case, for those who are not interested in DIY Crowdfunding, an alternative exists.

DrewP 02-12-2016 1:30 PM

I strongly believe this is due, to horrible marketing on the campaigns behalf. I slightly follow a music crowdfunding site: PledgeMusic and have purchased a CD or two from bands looking for funding. Many high-end bands that I know, I'll miss half the time because there are getting no marketing, by the time I do see them the funding is done and many do not meet their goal. It just seems like all these people, businesses, etc think all they have to do is place it on these sites and that's all they need to do. Or maybe they are hiring inept marketing teams, I'm not sure! I've thought about offering these types of groups assistance, just not sure if they would have the capital to put forward for my services.

SebastianK 02-12-2016 3:12 PM

Slowly in recent years we are seeing a slight increase in the number of campaigns being funded successfully. However the rates of failing to achieve goals are quite high. Most people that enter crowdfunding think that a campaign can be put together in a matter of few days. In reality it cannot unless it's some kind of revolutionary idea that everyone will go for. A lot of of time needs to be invested in the proccess of structuring the campaign and building out a network of support. Then finally to maintain the momentun, to keep working hard throughout the campaign. If the project creator cannot handle the workload, it is best to outsource to someone else.

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