Crowdfunding is financing a new business venture with many small contributions from individuals, usually via the internet.
Crowdfunding by the Numbers
$16.2 billion: Crowdfunded worldwide in 2014
1,250: Active crowdfunding platforms worldwide
56%: Share of worldwide funding raised in North America
40%: Share of funding raised for business and entrepreneurship
270,000: Jobs created by crowdfunding in 2014i
$90 billion raised through crowdfunding by 2020 (as predicted by the World Bank)
Crowdfunding: Not Just for Millennials (Would be better as a bar chart, maybe with stacks of money for the bars? Or alternatively, figures representing each age group could be shown – a young adult to represent Millennials, etc. This would help the viewer to visualize who their target audiences should be if they intend to use crowdfunding.)
Age group | Has given | Likely to give in the future |
Millennials | 17% | 47% |
Gen X | 10% | 30% |
Baby Boomers | 6% | 13% |
Mature | 2% | 4% |
Types of Crowdfunding
Rewards-based: Donors receive incentives, like a small gift or the product itself. The bigger the donation, the better the reward!
Donation-based: Individuals and non-profits solicit donations for good causes – like disaster relief or emergencies.
Peer-to-peer lending: Individuals borrow money from the crowd, then pay it back with interest.
Equity crowdfunding: Accredited and non-accredited angel investors alike may invest in a private company.
Top Crowdfunding Platforms*
- GoFundMe
- Kickstarter
- Indiegogo
- Teespring
- Patreon
- YouCaring
- Crowdrise
- DonorsChoose
- Kiva
- GiveForward
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What makes a campaign “successful”?
- Netted a mean of $40,300 for business ventures
- Earned an average of $813 per hour invested in the campaign
- Received donations averaging $70 each**
Spotlight on: Kickstarter
This popular platform attracts many budding entrepreneurs.
265,000: Number of Kickstarter campaigns between 2009 and 2015
36% of campaigns were successful
29% of successful campaigns raised over $10K
5%: Kickstarter’s cut of successful campaigns
Spotlight on: Lending Club
This peer-to-peer lending platform offers crowdfunded loans.
200,000: Loans serviced between 2006 and 2013
10%: Loan approval rate
$13,490: Average loan size
Crowdfunding Campaign Hall of Fame
Ethereum DAO – This decentralized autonomous organization (think Bitcoin, but bigger!) raised over $130 million in the largest crowdfunding campaign to date!
Roberts Space Industries – Their popular video game, Star Citizen, garnered over $115 million in crowd funds.
True Venture – In a self-hosted crowdfunding campaign, they raised over $27 million for their Glowforge 3D printer.
Pebble Time – This smartwatch company raised over $20 million, the most in Kickstarter’s history!
Exploding Kittens – Game designers and cartoonists put this quirky card game together, reaching 87,825% of their Kickstarter goal!
Potential Benefits of Crowdfunding
- Anyone can try it. Venture capitalism or small business loans are not for everyone. Crowdfunding may be a low-risk alternative suited to non-traditional ideas.
- It puts the word out. Have a great product or business idea? Crowdfunding could help you market and presell your product.
- You can test your idea. Wondering if your product is the next big thing? Crowdfunding may shed light on whether your idea has inherent mass appeal.
- Your connections count. Have a wide network? You may be in luck! Crowdfunding lets you leverage your community to raise capital.
- It creates buzz. A successful crowdfunding campaign could potentially attract interest from larger investors.
- It could be bigger than venture capital. VC averages $30 billion per year, while crowdfunding keeps growing.
*based on site traffic | **based on Kickstarter data | i crowdexpert.com/crowdfunding-industry-statistics | Additional Sources: ii freedman-chicago.com/ec4i/History-of-Crowdfunding.pdf | iii crowdfunding.com | iv crowdsourcing.org/editorial/global-crowdfunding-market-to-reach-344b-in-2015-predicts-massolutions-2015cf-industry-report/45376 | v forbes.com/sites/chancebarnett/2015/06/09/trends-show-crowdfunding-to-surpass-vc-in-2016/2/#15802b6576da | vi /crowdexpert.com/crowdfunding-industry-statistics | vii forbes.com/sites/cherylsnappconner/2014/01/21/new-report-the-roi-of-crowdfunding/#38e93dd65cd8 | vii alleywatch.com/2013/07/kickstarter-statistics-dissected | viii investopedia.com/articles/insights/051716/dao-raises-130m-largest-ever-crowdfunded-project.asp | ix robertsspaceindustries.com/funding-goals | x /trueventures.com/the-27-9-million-crowdfunding-campaign-qa-with-glowforge | xi entrepreneur.com/article/235313 | xii forbes.com/sites/chancebarnett/2015/06/09/trends-show-crowdfunding-to-surpass-vc-in-2016/3/#2665e9a56078