By Daniel Hunter
A new research report on the main elements of crowdfunding campaign success has been published, revealing that social media and the right team seem to be crucial for achieving the funding goal.
FundedByMe published the report, which analyses factors such as usage of various social media platforms, the background of a company’s team or documents uploaded as part of a crowdfunding campaign.
One of the main conclusions from the report was that placing a link to Facebook or LinkedIn on a company’s pitch page on a crowdfunding platform increases the probability of success more than 30% (31,37% for Facebook and 32,58% for LinkedIn). Furthermore 10 likes on the company profile of any of those social media portals adds additional 6% for the success (6% on LinkedIn and 5,6% on Facebook).
Another important factor is the types of documents delivered to the crowd. Reliable market statistics can help by 27% and an upright financial forecast by 37.3%.
Entrepreneurs should also pay attention to the background of team. If a member has a background in management or consulting, this add 26% to the likelihood of success. Relevant business education can have an influence on a company’s success by 25%. Surprisingly, possessing a master’s degree or previous entrepreneurial experience is not regarded by investors as being relevant.
“That doesn’t mean that fulfilling only one of the conditions will automatically bring you the relevant amount of money. We analyzed a dependent variable binary and checked either successful or unsuccessful outcome. Successful outcome was defined as reaching 80% of the initial funding goal” comments Alina Lundqvist from FundedByMe.
The report was based on the analysis of all equity crowdfunding campaigns from the Nordics, run on the FundedByMe platform since 2012. The European equity crowdfunding market size (excluding UK) was worth €82.56 million in 2014. The CAGR for the industry between 2012 and 2014 was 116%.