By Emily Kuo, Expedition PR
Crowdfunding has become an increasingly popular method to raise money, for businesses and individuals alike. According to a study by Massolution, in 2012 alone, crowdfunding raised about US $2.7 billion and funded more than a million projects across the world. This is nearly double the estimated US $1.48 billion that was raised in 2011. Crowdfunding campaigns are becoming more diverse as well, as we see more and more platforms developing across all four of Massolution’s categories of crowdfunding platforms (CFP): equity-based, lending-based, reward-based and donation-based. They’re not just used to fund non-profits and individual products, but also to start small businesses and improve existing ones.
At the same time, the use of social media has also been on the rise. According to a webinar hosted by Aaron Strout, there are more than a billion users on Facebook, 60% of whom log in daily and more than 80% of whom reside outside of the US. Twitter was the fastest growing social network in 2012 with more than 200 million users. 20% of adult internet users in the US are on Twitter. Linkedin has 2 new users sign up per second, and more than 200 million users in 200 different countries. As we move our social lives online, our other habits change as well. Social media isn’t just for keeping updated with friends anymore; we track our favorite TV shows, stores, restaurants, news and more.
Many crowdfunding campaigns have used social media to create a network of supporters of the project. Building this community of donors helps draw in the crowd and rally even more support. Not all campaigns succeed in raising enough money to get funded. Indiegogo saw that in 2012, 64% of campaigns had pitch videos, and of those, the ones with videos that were under 5 minutes were 25% more likely to succeed. People stop watching pitch videos at 2:20 minutes, according to Emily Best, CEO and Founder of Seed & Spark and one of Indiewire’s 2013 Influencers for Independent Film. This means that any information past that is lost and exemplifies the importance of conciseness. Keep in mind that not all campaigns are able to raise the funds needed, but a consistent social media presence can make or break a successful campaign.