Saturday, March 5, 2016

Keys to Crowdfunding: "high quality media, prior success, positive comments..."

We note with interest a recent study from the University at Buffalo School of Management that shows "high quality photos and video, previous crowdfunding success and positive comments from backers are the keys to a successful campaign."

This syncs with what we uncovered in our two books, "The JOBS Act: Crowdfunding for Small Businesses and Startups" and in "Top 50 Crowdfunding Campaigns: Fifty Most Successful Crowdfunding Campaigns."

According to news reports, the University at Buffalo School of Management study "found that by receiving these signals, potential investors..gain valuable information that motivates them to participate and increases the likelihood of a project achieving its funding goal."

One part of the analysis we found in error, however. One of the authors of the study was quoted as saying that

"These sources are important because backers of crowdfunded projects have less access to information than typical private equity investors..private equity investors follow a stringent due diligence process to assess the quality of a startup, while crowdfunding backers rely more on the information on the campaign's webpage."

This shows a lack of understanding about crowdfunding and private equity firms, who lose 80% of the funds they invest, something that would not occur if they really followed "stringent due diligence process(es) to assess the quality of a startup."

For more, see: "Top 5 Reasons People Contribute to Crowdfunding Campaigns" by @CreativeInv on @LinkedIn

"How To Crowdfund Update" by @CreativeInv on @LinkedIn


"How to become the biggest Kickstarter project..EVER!" by @CreativeInv on @LinkedIn