Crowdfunding comes of age as average raise climbs by 22%
Crowdfunders have benefited from a sharp increase in the amounts raised, according to new figures.
The State of the Crowdfunding Nation 2017 is a report produced by The Crowd Data Center, which has tracked and analysed more than 450,000 crowdfunding campaigns over the past three years.
Figures for last year showed that in its largest markets, the USA and the UK, the overall number of campaigns launched plateaued, with a 17% decrease last year from a high reached in 2015.
But the average raise climbed by 22%, the average amount pledged was also up by 2% and overall successful campaigns are getting more backers – up 6%.
More than 128k campaigns were launched in 2016, down from 153,377 in 2015, and the total raised was also down – 5% – from £836m in 2015 to £796m last year.
However other markets and sectors can vary sharply, according to familiarity, maturity and the degree to which crowdfunding know-how has started to become embedded into the culture. Reports are available for all 40 sectors and most countries here.
Barry James,CEO of TCDC said:
“Seed crowdfunding is coming of age, where startups and entrepreneurs are using the rewards model and platforms to create new businesses, products and services.
“We are still in the early adopter phase but as know-how spreads and quality is increasing so is reach and confidence, hence the rises in the average number of backers per campaign and pledge amounts. The fall in volume is most likely accounted for by a fall in ‘hit-and-hope’ campaigns, of which we ordinarily see large numbers, from project owners who ‘post and run’ so never even reach the 1% mark.
“There is chronic lack of know-how and understanding about the process, which is one of the main reasons why it is still with the early adopters.
“The opportunity now is to tackle this – and, if you look to the adoption-curve this means that seed crowdfunding has the potential to treble fairly fast, within the next couple of years or so, if this is tackled, and double again from this higher level into the longer term.”
To achieve this there is much work to be done to spread and embed know-how so The Crowdfunding Center, sister organisation to TCDC, will this year be launching several new initiatives to tackle this, as well as introducing training and collaborations with business advisors, accountants, mentors and other entrepreneurial and business associations across the UK and beyond.
In addition, TCDC now has some startling data on women entrepreneurs; the Women Unbound report, produced in conjunction with PWC, will reveal the scale of the impact of the democratization of finance on women owned businesses. This report will be published in Spring 2017.