Starting up a new business takes a lot of capital to get it up and started.
Newly founded businesses and startups have a harder time qualifying for business loans.
This is why new entrepreneurs and innovators are using crowdfunding to raise the money needed for their personal projects or business ventures to be able to stand up on their feet.
You can use crowdfunding to collect small amounts of money from a large number of people, the majority being via the Internet.
Although it may sound simple, crowdfunding isn’t as easy as posting your project online and reaching the financial goal in a mere few days.
You will need proper planning, preparation, knowledge, and understanding of the type of crowdfunding and platform best suited for your project. Most often than not, a successful crowdfunding campaign will require a financial investment from yourself as well.
Overview of Crowdfunding Statistics in 2020
Crowdfunding is a massive and ever-expanding industry. One can easily get lost on how to start and how to run a successful crowdfunding campaign. Below is an overview of the current crowdfunding statistics worth considering when deciding to run a crowdfunding campaign and what factors you should look out for.
- Individuals aged 24 – 35 years are more likely to engage in crowdfunding campaigns.
- Individuals aged 45 years and older are significantly less interested in engaging with crowdfunding campaigns.
- The average preparation time for successful crowdfunding campaigns is 11 days.
- The average post activity of a successful campaign administrator is around 4 times throughout the whole campaign period.
- Crowdfunding campaigns raise 126% more funds when the owners update their supporters.
- $34 Billion have been raised through crowdfunding worldwide.
- 78% of successful crowdfunding campaigns exceed their funding goals.
- An individual crowdfunding campaign raises an average of $568.
- North American generates $17.2 billion every year through crowdfunding campaigns
- Asia generates $10.54 billion through crowdfunding campaigns per year.
- Europe generates $6.48 billion through crowdfunding campaigns per year.
- The average amount of backers for a successful crowdfunding campaign is 47.
- Backers for all crowdfunding campaigns pledge an average of $99.
- The average crowdfunding campaign has a duration of 9 weeks
- The estimated future growth of the crowdfunding market is estimated to be at $300 billion by the year 2030.
- Experts project that there will be 12,063,870 crowdfunded campaigns by the year 2023.
- Kickstarter has the overall most completed projects under its belt with 355,956.
- The highest chance of a successful crowdfunding campaign on a platform is Fundrazr – which has a 42.4% success chance. However, take note that Fundrazr is a smaller platform compared to others like Kickstarter.
- The platform with the highest average amount of funds raised is Indiegogo at $58,045.
Top Crowdfunding Platforms in 2020
Here, we’re going to list the top crowdfunding platforms currently available and provide important information such as their targeted audiences, the fees, and which campaigns are ideal for it to help find the best crowdfunding platform for your campaigns.
1. Kickstarter
Easily the most popular crowdfunding platform on the internet. You may even have heard the word “Kickstarter” even if you didn’t know what it was. The “Games” category of Kickstarter broke all records for most funded projects and the number of pledges from backers in 2018. Backers have pledged a total of $1.32 Billion in the games category with a 41.21% success rate.
Target: Global Audience
Fees: 5% of the total funds raised
Suitable for: Startups, indie video game developers, designers, musicians, artists, etc.
2. Indiegogo
Indiegogo is one of the best crowdfunding platforms out there, especially for startups. Indiegogo’s user base spans across 235 different countries and territories. Around 30 Indiegogo projects have raised over $1,000,000 and 250 projects have raised over $100,000.
Target: Global Audience
Fees: 5% of total funds raised
Suitable for: Small scale businesses, startups, non-profit organizations, etc.
3. GoFundMe
GoFundMe is suitable for individuals or small-scale businesses that require funds for the short-term or charities looking for funds for a just cause. A notable example of this is the Las Vegas Victims Fund which raised over $11.8 million. GoFundMe has generated over $9 billion for projects on the platform ever since it was created in 2010.
Target: Global Audience
Fees: 2.9% plus 30 cents per donation
Suitable for: Non-profits, charities, designers, artists, etc.
4. Patreon
A very popular crowdfunding platform, especially amongst the creative community. Patreon is different from other crowdfunding platforms. Instead of a campaign, Patreon utilizes a subscription model where individuals become Patrons by pledging a certain amount of money to their favorite Creators every month to help fund their creative ventures and in turn have access to Patron-exclusive content.
Target: Global Audience
Fees: Subscription-based, varies between creators.
Suitable For: Artists, Musicians, Streamers, Youtubers, Online Models, etc.
Which Platform is Best for You?
When it comes to your specific project, there are many variables to take into account, like:
- Your reason for raising funds
- How much you’d like to raise
- Your resources for marketing
- The level of control you want over the project
- How often you’ll be raising funds
Your answers to these questions will help to guide your decision for choosing a crowdfunding website. I’d be happy to discuss this for your specific project. All you gotta do is book a one-on-one coaching call with me.
Tell me a little bit about your project, as well as your goals. Then, we can go about devising a plan of attack for your cause, project, product, or organization.
Conclusion
With more and more people getting connected through the internet, crowdfunding has never been a more viable financial option for budding entrepreneurs looking to get their idea out there and artists needing capital to continue their passions.
Crowdfunding is great because it allows people to provide financial support for projects, companies, or artists they believe in.
For the creators and entrepreneurs, it is a great opportunity to test the waters with your idea, receiving valuable criticism from potential customers before diving straight into the market.
