Is Crowdfunding Working? Here’s What We Know

Posted by | Feb. 10, 2011 | 4,220 views

Crowdfunding’s growing up.

On one such site, 13,512 people recently raised nearly $1 million for a Chicago designer. And fan-funding sites are now bankrolling albums from established music acts, not just dodgy indie bands.

But just how much are these services making for members, and for themselves?

I’ve spent the last few weeks collecting data on the sector, by talking with all the main crowdfunding platforms…

My conclusion: an estimated $80 million has been pledged through these sites, by fewer than a million supporters. But not everyone gets funded, and returns for the sites themselves appear modest.

Leader of the pack

New York’s Kickstarter is kicking it amongst the head of the pack. Since it started, it’s taken pledges worth $30 million for over 12,000 hopeful projects.

Such sites typically make their money by taking a commission of the amounts they pay projects – but most sites only pay money if projects’ pledges meet a pre-specified target amount.

In the case of Kickstarter, which takes five percent, about 45 percent of submitted projects hit their target – so the amount Kickstarter has made for itself is five percent of something far less than $30 million, and probably of about $8 million.

Growing scale
Still, the overheads required by such sites are low…read the full story at

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Posted by on Feb 10 2011. Filed under Business Models. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

1 Comment for “Is Crowdfunding Working? Here’s What We Know”

  1. Our crowdfunding on Indiegogo’s site was a smashing success!!! It’s proven to be a great way to interact and connect wiith our fanbase.

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