Crowdfunding Help - How to get crowdfunding momentum on your side!

posted Jul 2, 2013, 3:31 PM by Andrew Manzo   [ updated Jul 2, 2013, 3:33 PM ]
If you want to succeed at crowdfunding, bring your own network.

That's the big takeaway from an 11-month study conducted by British equity crowdfunding site Seedrs.

The site looked at the likelihood of success for startups looking to raise money from the crowd and found that investors tend to pile in when at least some other investors have anted up.

The magic number? 35 percent. Seedrs found that companies that had reached 35 percent of their goal always reach 100 percent. Here's the Seedrs staff, in a blog post:

But if there is one secret to success on Seedrs (or on any equity crowdfunding platform), it is this: independent investors will only invest meaningfully if they see that the deal has momentum; and the only way to create momentum is to get network investors to invest the first chunk of capital.

So here's a word of advice to those contemplating a crowdfunding campaign: Be sure to tap your existing network to contribute early and often. That way, you establish that all-important momentum and are more likely to succeed.

That advance prep will become even more important as more crowdfunding sites spring to life and more startups look for money online.

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