During the first Global Crowdfunding Expo, which took place in San Diego, California, last week, some interesting data on the sector were presented. We have written out a few highlights from those data, which might be useful in complementing the information included in the Global Crowdfunding Market Report that will be published shortly by Crowd Valley.
Project Initiator’s Profile
According to the data presented during the event:
According to the data presented during the event:
- the average age of the entrepreneurs using crowdfunding is 35 years old.
- 84% of the investors in the successful crowdfunding projects is male. However women entrepreneurs have higher success rates on crowdfunding campaigns than men.
- 95% of the entrepreneurs who use crowdfunding have some college education.
- 440 is the average number of backers in a rewards crowdfunding campaign, compared to 96 investors on average in equity crowdfunding campaigns.
- $3,790 is the avarage cost of running a successful reward crowdfunding campaign in the USA. The cost drops down to €500 in Europe. $1,000 is instead the average cost to execute an equity crowdfunding campaign.
- 90% of the businesses that raise $5,000 through crowdfunding turn into viable businesses.
- Within six months of crowdfunding, more than 10% of businesses receive institutional bank loans and 28% close funding rounds with venture capitalists and angel investors.
- 2.0 is the number of employees companies have, on average, before crowdfunding. After crowdfunding they hire on average 2.2 additional employees. Only about 5% of firms hire more than 10 employees.
- $35 billion in transactions have been cited through Regulation D general solicitation offerings since the SEC lifted the ban on general solicitation.
- The table below shows how many companies (%) display low, medium and high revenues before and after the crowdfunding campaign.
Conclusions
Overall from the data above it is possible to draw the following conclusions:
Alois, J.D. (2014). Crowdfund Global Expo Shares Encouraging Data on Crowdfunding. Crowdfund Insider.
Image credit to: Vinoth Chandar: https://bit.ly/p/e88czY
Overall from the data above it is possible to draw the following conclusions:
- Crowdfunding is a financing tool used mostly by young people (average age is 35 years old), thus it represents for them an additional, valid way to raise capital for their businesess initiatives.
- Crowdfunding can be not only a financing tool, but also an enterprise accelerator as well, given that, on average, companies which are successfully crowdfunded grow their staff after the campaign.
- Crowdfunding is a way to enhance a project’s credibility and validity, since many companies receive bank loans or VC finance after a crowdfunding campaign.
- It follows that crowdfunding is not necessarily an early stage finance source alternative to the traditional ones, but it can be complementary to them.
Alois, J.D. (2014). Crowdfund Global Expo Shares Encouraging Data on Crowdfunding. Crowdfund Insider.
Image credit to: Vinoth Chandar: https://bit.ly/p/e88czY
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
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