All or nothing campaigns reduce perceived risk - iCrowdNewswire

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Sep 6, 2015 7:58 PM ET

All or nothing campaigns reduce perceived risk

iCrowdNewswire - Sep 6, 2015

When crowdfunding, it’s tempting to go to Indiegogo and launch a flexible funding campaign. Afterall, you’ll dedicate time and perhaps money promoting your campaign and you should make sure you collect some funds if everything goes wrong.

While tempting to the creator, that approach is seen as risky by your backers. Afterall, crowdfunding involves risk and giving money to someone who will deliver their product or service months later doesn’t help making it credible. In addition, stats say that 75% of all crowdfunding campaigns deliver late. Also, there is a considerable number of campaigns that end up giving the money back to people who have funded the project, even from famous names.

Flexible funding adds to that risk. It can mean, to your potential backers, that you will not collect enough funds to make it to the market. So, unless you manage to raise significant funds from the start, it’s unlikely anyone else will put their money at stake in your project.

That assertion is backed by serious studies. In 2014, Cumming, Leboeuf and Schwienbacher analyzed 47,139 Indiegogo campaigns from 2008 to 2013. Indiegogo performs worse than Kickstarter in campaign completion, so studying campaigns from that platform only can give much better results than mixing different platforms together.

In that study, 34% of all or nothing campaigns were successfully funded, while only 17% were successful in Indiegogo. That 17% number is above the 9.8% calculated by shopify study, while the 34% is below the 43% Kickstarter success pointed by the same study. Those differences can be based on quality of sample data and methodology differences (also on platform specific performance indicators), but there is a clear point here: all or nothing campaigns perform better even in a platform where most campaigns are flexible funding, like Indiegogo.

In short: if you want your project to be taken seriously by the public, choose all or nothing campaign.

Via iCrowdNewswire
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