Crowdfunding has had its share of success stories, but according to a new report from the Wall Street Journal, the second time is the charm for some business ventures.
The report, based on numbers from crowdfunding website Kickstarter over its six-year existence, found that people were, on average, successful in reaching their target fundraising goals 38% of the time. But when it came to users’ second campaigns to raise cash for various projects, that number almost doubled, with 73% of initiatives reaching their next funding goal.
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That number jumped to 91% by the time users reached their fifth campaign, according to the report. What’s more, the trend was also found to be taking place on competing site Indiegogo.
Fundraisers have used sites such as these, GoFundMe, and RocketHub to raise billions to develop everything from devices that track lost wallets, hotels and creative projects such as music albums.
Along with
offering a chance to bypass the loan process (though not all of the money comes directly to campaign leaders, as crowdfunding sites can take as much as 10% off the top of successful campaigns), they also present a chance for creators to interact directly with their fan base by offering advance previews or other goods in exchange for a donation.Though there have been some tough times for the practice, crowdfunding can be a viable option for raising funds for your business or launching a new product. But in order to have the success found by the users in the Wall Street Journal article, future fundraisers would be wise to familiarize themselves with the facts about crowdfunding and the best ways to execute their initiatives.