12 Crowdfunding Facts You Never Thought You Needed To Know

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Crowdfunding is a great tool that helps startups as well as small and medium-sized enterprises.It helps them to get the money they need to get started with a business idea. It also helps those in the non-profit sector to raise funding for specific projects they have to help other people. There are also social causes and issues that benefits from the platform by giving people something to rally behind on.

But as you now consider crowdfunding, here are a few interesting facts you never thought you needed to know about crowdfunding.

Not all platforms employ a “go-hard or go-home” scheme

Most people believe that crowdfunding platforms are set on stone when it comes to how project initiators get the money. Most people think that when they fail to put the money together from investors, they do not get to see any of it. Although this holds true for some of the big and well known platforms, there are those that will still release the money to project initiators even if they do not reach their target amount but is usually has a higher fee.

People are your biggest promoters

In rewards-based crowdfunding platforms, about 70% of backers are more than happy to impart non-financial support for a project they believe in. They usually help a campaign out by promoting it to their own network which can include their own family and set of friends.

A run can be divided into three stages

A typical crowdfunding campaign can be divided into initial excitement as soon as you start the project. It can then be followed by a lull in the middle which is then capped off by a rapid activity towards the end. It would be great to note that there are backers that look at long campaigns to lack confidence in getting things done.

Crowdfunding espouses global business

The platform presents small startups to a global community who will decide whether they will pitch in or not. This particular mechanics of the platform exponentially increases the chances of project initiators in gathering the support they need.

Early traction is closer to home

But the global aspect of crowdfunding starts with a much needed traction closer to home. Family and friends, as well as the local community, can give you your much needed boost. This also paints a better picture when backers talk about early votes of confidence on a project.

Over 50 gets 95

It is interesting to note that for most crowdfunding projects, they have a 95% chance of reaching their target goal once they reach past their halfway mark.

Spelling matters

You should have paid closer attention to your English teachers because spelling mistakes in a crowdfunding campaign could account to a 13% reduction in success rate much like the inability of giving updates to investors. It would be interesting to note that you have a 26% less chance of reaching your goal as well if you do not include a video in your crowdfunding project.

Equity crowdfunding kings

When you look at equity crowdfunding, UK leads the race with 40 platforms followed by the US with 20. The rest of the world, including Southeast Asia has 17 but rapidly increasing due to consumer education and government support.

Time is an important resource

Donation-based crowdfunding platforms know very well the importance of volunteerism among their backers. This is why 34% of them have enjoyed an increase in the number of people giving their time and skill for their campaigns.

Crowd trumps experts

There are times when the collective mindset of the crowd is far better than what the experts will say. If you still remember the game show “Who Wants to Be a Millionaire?” – the crowd got the question right 95% of the time as against 65% from experts.

Paradigm shift in finance

Crowdfunding democratizes the funding world because it turns everything upside down. The people are now the ones deciding which ideas move on to the next stage and not just traditional lenders.

China loves crowdsourcing

One of the largest agencies in China has over eight million members. This is bigger than some well-known cities or even double the number of workers from some of the most famous food chains in the world.

 

 

This article is written by the Crowdfunders Editorial Team. In Asia, Crowdfunders.Asia is a leading portal on providing news related to crowdfunding, start-up, property and business. It is operated by CoAssets.com. CoAssets is South East Asia’s first listed and largest real estate crowdfunding platform. If you have any Crowdfunding news or stories to share, please email [email protected]

 

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