What’s the best way to grab a potential crowdfunder’s attention? How can you highlight your project’s value? These questions among others are often a determining factor in whether or not a project reaches its crowdfunding goal. In addition, crowdfunding campaigns are often one of the first opportunities an entrepreneur has to communicate publicly about a project. It’s a stepping stone that can be the key to continuing the adventure.
In 2016, Philip H. Kim, Grégoire Croidieu and Mickaël Buffart published a study of 31,000 crowdfunding campaigns drawn from the Indiegogo platform. Philip is a professor and research at Babson College in the U.S., Grégoire is a professor and researcher at Grenoble Ecole de Management, and Mickaël is a doctoral student at Grenoble Ecole de Management and IREGE (Université Savoie Mont Blanc).
Mickaël explains their study as an analysis of the ratio between fundraising goals and achieved fundraising. "We looked at campaigns on Indiegogo, which along with Kickstarter is one of the most important international crowdfunding platforms. We studied how much was raised by each campaign in relation to the campaign's project presentation. These project descriptions were 640 words long on average, which is very short. We explored the frequency of specific words that helped project's stand out from the rest and therefore encouraged donations. We also looked at words tied to the notion of responsibility, which tended to not encourage donations." The campaigns that were included in the study received approximately 1.4 million donations for a total of $107.6 million raised.
Promoting a credible image for your project
Highlighting how your project stands out from others was one of the key factors that encouraged potential donors to contribute.
"Our study demonstrated that the use of language designed to highlight a project's uniqueness led to greater success rates in terms of fundraising. A unique, precise and measured project description led to increased fundraising," adds Mickaël. On the other hand, the study underlined that the use of terms tied to personal opinions (I think… I believe..., as well as complicated explanatory sentences) were less likely to reach their fundraising goal. Mickaël concludes: "Campaigns that relied on such language were penalized for having presented their project in a manner that was not attractive to potential donors."
4 tips to write a successful crowdfunding pitch:
- Use simple and clear phrases to describe your project.
- Avoid personal opinions.
- Share information that enables readers to compare the value of your project.
- Describe how you are unique without being complicated.
The details of the Indiegogo study
Between 2008 and 2013, almost 98% of sampled crowdfunding campaigns raised less than $20,000. On average, users reached a percentage of approximately 65% (or $3,500) with 47 crowdfunders per campaign. The average length of a campaign was 51 days. Most campaigns were launched by individuals or teams of two. Approximately 60% of campaigns used video presentations. Campaigns used an average of five to six images or illustrations. Indiegogo data for these campaigns indicated that 63% were creative projects, 28% social projects and 9% entrepreneurial projects.
To learn more
Kim, P. H., Buffart, M., & Croidieu, G. (2016). TMI: Signaling Credible Claims in Crowdfunding Campaign Narratives. Group & Organization Management, 41(6), 717–750.