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Elena Mikhaylova 
Davinci Institute 
September, 2014
Current Success Rate on Kickstarter 
is below 44%. 
For the majority of other platforms it is even lower. 
Most campaigns ...
How long does it take to get ready?
It Depends: 
 On your funding goal 
 On the size of your social network 
 On your expertise 
 On your resources (time,...
Why Crowdfund 
 Marketing 
 Beta-Testing, Crowdsourcing 
 Pre-Sales, Customer Engagement 
 Market Validation for the N...
4 Types of Crowdfunding 
 Donations – money is provided for worthy causes, non-profits or people in need. 
There is no ex...
Is your project a good match for rewards 
crowdfunding? 
 B2C 
 Reasonably affordable for general public 
 Easy to unde...
Planning 
What: how lucrative is your product/project? 
When: season, how much time do you need to get 
ready, how long ...
these websites provide free or inexpensive solutions for independent 
fundraisers: 
SelfStarter – free open source softwa...
Top Mistakes 
 Not doing your homework: research other projects, their 
perks, video, media, comments, etc. 
 Not buildi...
Planning - Perks 
 Importance of small perks 
 Most popular 
 Depends on your target group - amount 
 Depends on your ...
Planning - Budget 
 An Avg. Successful Project on Kickstarter – below 
$10,000 
 Necessary Minimum/Stages 
 How much ca...
Kickstarter 
• Founded in 2009 in New York City 
• Available for US, UK, Canada, Australia, New Zealand 
and Netherlands r...
Kickstarter (cont.) 
• Approval process 
• Projects only 
• Prohibited uses (including causes or personal needs) 
• Fees: ...
Live Campaign: 
Common Mistakes 
 Video – too long, not to the point, doesn’t tell a story 
 Description – too long, not...
What do you need to say? 
• This is our product 
• This is how you are going to benefit from it 
• Call to action 
• This ...
Not monitoring and adjusting your action plan 
Outsourcing, dropping off your communications 
with the backers after the...
Money raised: strangers vs your own connections 
More than 80% of all Kickstarter campaigns raise 
below $10,000 
The smal...
Post Campaign 
Campaign and Data Analysis 
Communications with backers and media 
Perks fulfillment 
Your Campaign 
Hasn’t...
Contact me 
Website: www.CrowdfundProductions.com 
Email: info@crowdfundproductions.com 
LinkedIn: www.linkedin.com/in/ele...
Why The Majority Of Crowdfunding Campaigns Fails
Why The Majority Of Crowdfunding Campaigns Fails
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Why The Majority Of Crowdfunding Campaigns Fails

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More than half of Kickstarter campaigns fail to reach their crowdfunding goal. The presentation examines the reasons for that and suggest the steps to be taken to improve your chances to succeed.

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Why The Majority Of Crowdfunding Campaigns Fails

  1. 1. Elena Mikhaylova Davinci Institute September, 2014
  2. 2. Current Success Rate on Kickstarter is below 44%. For the majority of other platforms it is even lower. Most campaigns fail Even before they go live on a crowdfunding platform The main reason – lack of preparation
  3. 3. How long does it take to get ready?
  4. 4. It Depends:  On your funding goal  On the size of your social network  On your expertise  On your resources (time, team, money) Six weeks to six months
  5. 5. Why Crowdfund  Marketing  Beta-Testing, Crowdsourcing  Pre-Sales, Customer Engagement  Market Validation for the Next Funding Round
  6. 6. 4 Types of Crowdfunding  Donations – money is provided for worthy causes, non-profits or people in need. There is no expectation for return.  Rewards – money is given in exchange for “perks”. The most popular one is the copy of the product to be created as a result of the CF campaign.  Equity - funds are invested in exchange for the company’s shares or participation in the future profits.  Debt (P2P and P2B) – funds are provided in return for interest payments.
  7. 7. Is your project a good match for rewards crowdfunding?  B2C  Reasonably affordable for general public  Easy to understand value for large groups of people  Can create strong emotions/connection/”cool” image  Can build a community around the project
  8. 8. Planning What: how lucrative is your product/project? When: season, how much time do you need to get ready, how long is the live campaign? Who: your target group/groups – demographics, geography, lifestyle How: marketing channels, influencers
  9. 9. these websites provide free or inexpensive solutions for independent fundraisers: SelfStarter – free open source software to build your own crowdfunding website. The latest famous project, Tile, raised $2.6M in July from almost 50,000 backers, CrowdHoster – an application hosted by CrowdTilt; currently. The most famous success story – Soylent.me campaign which has raised over $1M, CrowdfundingSite.net – license plans start from $129 or $328 per year, IgnitionDeck –WordPress framework, starting from $79 for unlimited websites, Mimoona – Plug&Fund app, three monthly payment plans, ITPrism.com – crowdfunding open source software for Joomla; free and PRO versions Celery – platform to accept and manage pre-orders on Wordpress, Tumbrl, Shopify and other websites; 2% per transaction plus PayPal fees. http://www.crowdfundproductions.com/kickstarter-alternatives/
  10. 10. Top Mistakes  Not doing your homework: research other projects, their perks, video, media, comments, etc.  Not building your crowd in advance: nothing can be more miserable than a creator launching the project and waiting for the crowd to rush with the money. Fake fans/followers/pledges  Not preparing your media outreach, spamming your network  Not having three plans  Not making a budget and sticking to it. Decide if your goal is mostly fundraising or marketing.  Not getting feedback for your perks in advance
  11. 11. Planning - Perks  Importance of small perks  Most popular  Depends on your target group - amount  Depends on your target group – lifestyle  Geography – shipping costs, taxes
  12. 12. Planning - Budget  An Avg. Successful Project on Kickstarter – below $10,000  Necessary Minimum/Stages  How much can you REALISTICALLY raise? - 30% Rule  How much do you need to raise (on top of your project costs): platform fee (4%-9%), payment processor fee (3.9% -5%), cost of production, packaging and shipment for your perks, marketing costs, canceled pledges, returns, taxes
  13. 13. Kickstarter • Founded in 2009 in New York City • Available for US, UK, Canada, Australia, New Zealand and Netherlands residents, • Creative projects in 15 categories • All-or-Nothing Funding • Almost 7M Backers • 80 projects – raised over $1,000,000 • Most successful project – Coolest Cooler– over $13M
  14. 14. Kickstarter (cont.) • Approval process • Projects only • Prohibited uses (including causes or personal needs) • Fees: 5% Kickstarter plus Amazon payments (US) or Credit Card fees -3-5%. Zero, if the project failed. • Must have rewards • Donations between $1 and $10,000 (in the US) • If a project succeeded, the money usually is available in 2-3 weeks after the end of the campaign
  15. 15. Live Campaign: Common Mistakes  Video – too long, not to the point, doesn’t tell a story  Description – too long, not enough visuals, doesn’t create trust (timeline, budget)  Talking about yourself instead of the benefits for potential backers and partners  No plan for stretch goals  Lack of updates, communications with the backers  No plan for keeping a momentum  Spamming
  16. 16. What do you need to say? • This is our product • This is how you are going to benefit from it • Call to action • This is our story (how/why we came up with the idea) • This is how it works • This is how we are going to use the funds • This is the timeline • This is our team http://www.crowdcrux.com/red-flags-to-avoid-crowdfunding-scams-and-con-artists/
  17. 17. Not monitoring and adjusting your action plan Outsourcing, dropping off your communications with the backers after the end of your campaign Not understanding campaign dynamics. Strong start by your own connections - the Kickstarter community -media coverage - strangers. The more backers you bring – the stronger will be support from the crowdfunding platform itself.
  18. 18. Money raised: strangers vs your own connections More than 80% of all Kickstarter campaigns raise below $10,000 The smaller the amount you are raising, the more you depend on your own network  Up to $5,000 – 80-90% from your connections  $30,000-$50,000 – 20-40% from your connections  $100,000+ - 10-15% from your own connections
  19. 19. Post Campaign Campaign and Data Analysis Communications with backers and media Perks fulfillment Your Campaign Hasn’t Succeeded Until You Deliver The Perks To Every Backer
  20. 20. Contact me Website: www.CrowdfundProductions.com Email: info@crowdfundproductions.com LinkedIn: www.linkedin.com/in/elenamikhaylova1/ Skype: Alive_Digital Twitter: @Alive_Digital
  • TimFlatSignedMiller

    Oct. 17, 2014

More than half of Kickstarter campaigns fail to reach their crowdfunding goal. The presentation examines the reasons for that and suggest the steps to be taken to improve your chances to succeed.

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