By this point we all have some awareness of what crowdfunding is and how they operate: whether it be from a new and exciting Kickstarter campaign, or a GoFundMe for a deserving individual. But for those of you who may not the general process is you log onto one of the many crowdfunding sites, publish a campaign detailing your idea or cause, outline the reward(s) patrons would receive from your campaign or the benefits your campaign provides to individuals and the community, share it everywhere you can, and then let the money roll in.
Crowdfunding’s success is largely down to its simplicity, a central place to share your ideas and promote your causes. A singular point people can go to find new and exciting things or worthy causes to put their money behind. No endless meetings with potential investors, constant research into target markets, or reaching out to friends, families and strangers just to receive a rejection at the end of it.
You may be asking yourself: should I consider crowdfunding? Absolutely, the time is never better to start! According to a study published by Facts and Factors in 2021 the Crowdfunding industry was worth approximately thirteen and a half billion (USD), and was projected to grow to roughly twenty eight billion (USD) by 2028.
The crowdfunding market has even seen a positive effect due to the COVID-19 pandemic. During Covid, many entrepreneurs and small businesses turned to crowdfunding as a means of obtaining funding for their creative endeavors. Data from the Journal of Medical Internet Research shows that there was a significant increase in the number of GoFundMe campaigns related to COVID-19, with a 735% rise in March 2020. Additionally, Enventys Partners reports that despite the pandemic, the number of Kickstarter projects actually grew by almost nine percent from January to April 2020.
To further breakdown the data:
Kickstarter breaks down their stats a little further. Since their launch in 2009 they have had over 7 billion dollars funded through their platform, with the majority of the funding being directed to the Games ($2.09 B), Design($1.53 B), and Technology ($1.33 B) categories.
Patreon boasts 250,000+ creators on their platform, with eight million plus patrons. Which equates to over three and a half billion dollars in payouts since 2013. Based on Graphtreon’s data the creators of Patreon reached the milestone of generating one billion dollars in revenue within six years. Then, they accomplished the same feat of generating a second billion in just 15 months. As of Q3 2022, the company's estimated payouts (not including undisclosed earnings) were over twenty six million per month.
With the ease in getting a campaign started it seems pretty simple and straightforward right? There must be some hidden twist, or secret code to crack to being successful through crowdfunding! But in reality there isn’t one. The only thing you have to do is engage the audience.
The use of social media promotion is one of the primary drivers of growth in the crowdfunding industry. This approach allows creators to generate interest and pre-sell their products while also serving as a cost-effective marketing strategy. As a result, successful crowdfunding campaigns can achieve more than just raising funds, they are also low-cost and can quickly reach a wide audience.
Many crowdfunding projects utilize social media as a means of reaching potential backers, and it also allows them to monitor referral traffic to their websites. This free and easy promotion on social media is expected to continue fueling the growth of the global crowdfunding market during the forecast period.