Just a couple of years ago, providing answers to some of the most common questions on crowdfunding was based evenly between limited anecdotal evidence and my gut feelings as an attorney with keen business instincts.
But as with any fledgling industry moving towards maturity, more and more data has started to appear that makes answering these questions a bit easier. One recent mountain of data on the crowdfunding world that just arrived contains a plethora of information -- read on as I distill some of it for you.
Barry James and his team at The Crowd Data Center recently released eFunding & The State of The Crowdfunding Nation, a report (which can be purchased for $49) that studied more than 75,000 crowdfunding campaigns for the first quarter of 2014. The report provides a wealth of information about both rewards-based and equity-crowdfunding campaigns. It puts crowdfunding into a whole new perspective.
Those of us in the industry already knew how profoundly the crowdfunding explosion had affected society. But the report puts it into perspective, and one particular fact truly illustrates the explosive nature of the burgeoning industry. Gordon Moore, one of Intel's founders, coined Moore's Law that predicted computing power would grow exponentially for the foreseeable future, doubling every 18 to 24 months.
According to the eFunding report, crowdfunding on a global basis is doubling at nearly 10 times the rate of Moore’s Law.
The report and the infographics accompanying it offer insights into what is happening in crowdfunding worldwide by drawing on a continuous influx of data from live crowdfunding campaigns as well as studying the major funding platforms, pledges and patterns of donors and investors during the first quarter of 2014. Here are some interesting facts and numbers about the global effect of crowdfunding from the eFunding report:
- More than $57,000 is pledged to a crowdfunding campaign somewhere in the world every hour of every day.
- The five most popular categories of successful crowdfunding campaigns are gaming, technology, design, film and music.
- Rewards-based campaigns on Kickstarter successfully fund 42.8 percent of the time. On Indiegogo, the success rate is 14.4 percent.
- The average number of backers of a successful Kickstarter campaign is 255.
- An average of 325 new crowdfunding campaigns launch every day.
These tidbits of information are a great resource for anyone who is looking to crowdfund. For example, being able to look at the statistics that are now available allows interested crowdfunders to know which platforms work and how well. James and his crew are constantly updating the site with more and more research. The site has search tools that let anyone answer almost any data-driven question about crowdfunding, questions that are crucial when someone is considering, planning and launching a campaign.
Until now, getting answers to these could take hours or days of research on many different platforms, trying to compare apples to oranges.
As someone experienced with the field, not only can I now find promising crowdfunding rising stars or rocketing campaigns far before they've become obvious to the world, but I can do so by mining the live-data (registration is required) on active campaigns on a daily or even hourly basis. The site’s analytics can also be used to dig deeper into the data for emerging trends.
While traditionally, investing has been a very closed world with information closely guarded and available at a premium, if at all, one of the things I love about crowdfunding that's transformative is its openness and transparency. Having data such as this available will assist investors and entrepreneurs as the crowdfunding world booms when equity crowdfunding under Title III of the JOBS Act soon becomes a reality.