Crowdfunding success and failure: what actually happens during a campaign
Résumé
What is behind crowdfunding’s success? Is simply asking for help enough to tap into the reservoir of altruism present on the Internet? Well, it is not so easy. Only about half of all crowdfunding campaigns actually get funded, and the extent of funding varies considerably across projects. Many dismally fail. What makes the difference to reach the project’s funding goal and what actually happens in the process of the funding campaign? Are crowdfunders affected by the funding decisions of others and to what extent is project success path-dependent, determined by very early pledges? Do project launchers try to exploit the relative anonymity of the Internet to contribute to their own projects?
In a recently published article, the authors explore these questions using data provided by Startnext, the biggest German crowdfunding platform. Startnext gave us access to its whole database – more than 100,000 pledges to more than 2,000 projects. The answers indicate that it is never too late to get a campaign on a successful track – provided its creator manages to get a surge in pledges rolling.