Only 15% of crowdfunding projects actually get funded, according to a recent TechCrunch article. It goes on to say that once the project reaches 35%, it’s almost 100% guaranteed that they will be funded. “What this data shows—and it’s corroborated by loads of anecdotal evidence we’ve received—is that crowdfunding works best when the entrepreneur works hard to market the campaign and drive investors from his or her extended networks.” To the naked eye it seems like crowdfunding is a numbers game, where hustling your network and digital hacks are the ticket to getting funded. To the trained eye, there’s way more to it than that, so we’re going to train your eye for a second.
As it stands our success rate in crowdfunding is 70% for the projects we’ve ran, consulted on, and advised. That’s almost five times the TechCrunch number. In light of this the question we ask ourselves is why are the projects we collaborate on so successful?
Is it because we only pick “sure things”? No, because crowdfunding is never a sure thing.
Is it because they have rich family and friends? Rich? No. Passionate? Definitely a contributing factor.
Is it because we’re magicians? Maybe, but there is one thing we know for sure: we pick projects based on the integrity of the founder and their willingness to take the plunge, leaving the fate of their company in the hands of the crowd. Anyone who’s willing to put that much faith in their project and in us is someone we are willing to help make their dream a reality.
Along with the integrity of the founder, we’ve also found six consistent characteristics of campaigns that beat the odds:
A Realistic Goal. You want to make sure it’s a number that you can actually achieve given your network and reach. Since family & friend pledges on average make up 30% of your raise, use the enthusiasm from that group as your barometer for choosing the right funding goal.
An Authentic Story. Stories are a very human way to connect people, and the crowd wants to feel connected to you and your project. You need to put your story out there loud and proud in the most authentic form possible. People can smell BS from a mile away, so if your story is disingenuous or just a guise to make a quick buck, people are going to notice the stink.
A Legit Strategy. From the story they tell to the people they reach out to, successful campaigns have thought of it all well in advance. They have planned for everything, from the inevitable to the unexpected, and are ready to push or pivot depending on how things evolve. To quote Dwight Eisenhower, “Plans are nothing. Planning is Everything.”
A Dedicated Army. You can’t go it alone. We’ve talked about this before, and it’s especially relevant in crowdfunding. You need to get your army behind you to do your bidding, from friends, family, team members and evangelists. The goal is to lock and load your army before launch so that your frontline is ready and rarin’ to go.
A Willingness to Go Down with the Ship. When you’re launching a crowdfunding project you are literally throwing yourself to the wolves, who will either accept you into their pack or rip you to shreds. Any founder and team that is willing to do that is an inspiration, and people take notice. You may need to scramble all the way to the end with the uncertainty of whether or not you’ll make it, but the willingness to scramble shows your team, your community, and your investors just how much you’re willing to fight for what you believe in. And that’s always a plus.
A Thing People Actually Want. This relates to anything from tangible products to high-level ideas. If people don’t want it, you won’t sell it. Period.