News

By how much do crowdfunded campaigns overfund?

December 18, 2015 • By TAB team

Reward
In an analysis of successful campaign funding across rewards, equity and donations, our data shows that the degree of overfunding is more extreme in rewards and donations, but of all the models, the average raise in equity crowdfunding campaigns is the greatest.

In an analysis of successful campaign funding across rewards, equity and donations, our data shows that the degree of overfunding is more extreme in rewards and donations, but of all the models, the average raise in equity crowdfunding campaigns is the greatest.

Equity

Of the equity crowdfunded projects analysed (1,532 individual campaigns), the majority (64%) raised exactly 100%. This appears to occur where a 100% cap on funding is placed on a campaign by the platform or fundraiser. There is also a noticeable decrease in the average amount raised by campaigns, which raised 110-150%, indicating a lower initial target. Additionally, if property investments are removed from the sample, the $1.1m average of the 100% bucket decreased significantly.


Number of equity campaigns by percentage raised of target amount


Donation

Rewards

By contrast to equity, 91% of successful rewards projects overfunded (understandably different to equity given valuation limitations). Where a project raised up to and including 200% of their target (within our sample of 80,443), the average is around $15k. However, when a project raised more than 200% of its target, the average is substantially higher. The relatively large number of projects that raise more than 200% of their target amount may reflect the lower targets set in reward campaigns coupled with significant overfunding occurrences.


Number of reward campaigns by percentage raised of target amount


Reward

Donations

Projects successfully raising donations have a smaller average raise than either equity or rewards. The proportion of successful campaigns that reach exactly 100% of their target raise (as illustrated below) indicates restrictions on overfunding by donations platforms. Of the campaigns sampled (15,712 individual raises), those that have successfully raised 101-110% have a higher average and target than those that achieving 111-200% of their target.


Number of donation campaigns by percentage raised of target amount


Donation


<I>Methodology note: We used data on 97,687 crowdfunding campaigns globally that were successful between 1 December 2013 and 1 December 2015. We only considered campaigns attempting “all or nothing” campaigns (i.e. 100% of the raise must be achieved to receive the funds), and excluded “flexible funding” campaigns.</I>