Let’s face it: everybody wants to raise a million dollars during their crowdfunding campaign. We hear it every day from entrepreneurs in every possible category, from tech to home improvement to workout machines and back again. We’re going to let you in on a secret, though: a modest crowdfunding raise isn’t a failure.
In fact, having a modest, realistic goal for your campaign—and then hitting that benchmark—can be one of the best indicators of your long-term success.
The numbers behind the numbers
It’s easy to look at the highest-grossing Kickstarter and Indiegogo campaigns of all time and think that raising $1mm is easy. That’s pretty far from the case, though. As we broke down in a recent blog post, less than 39% of Kickstarter campaigns actually meet their funding goal. The average raise for those projects? $11,132.16.
That’s pretty far from a million.
In fact, when we look even deeper into Kickstarter’s numbers, we see that since their launch in 2009, they’ve had 557 projects break the seven-figure mark. If you do the math, it’s about 1% of 1% that reach a million dollars.
Kickstarter has their stats publicly available, and we encourage you to take a look at them. You’ll start to get a good sense of how difficult it can be to raise a ton of money through crowdfunding.
But, with that said: is it actually important to raise a million dollars?
A modest crowdfunding raise sets you up for success
The short answer to that question: it’s not important at all!
If done correctly, your crowdfunding campaign is just the start of your product’s life. You’ll raise funds, manufacture and ship your product, and then move into eCommerce, where you’ll scale your business, launch new products, and grow in all directions. You don’t need a huge crowdfunding raise to achieve any of that! In fact, there are plenty of products that have launched, raised a modest amount, and then become superstars.
Let’s take a look at a few examples!
Xebec is a laptop attachment that instantly adds two screens to your setup. It’s lightweight, portable, and easy to set up—and it had a modest crowdfunding raise of $53k.
Fast forward to now: Xebec just launched their second version of the product along with a stunning new website. They have a ton of incredible product reviews, and their business is going strong.
Raised $307,332 on Kickstarter
This is one of the best-known successful crowdfunding launches. Peloton went from a $300k raise in 2013 to reporting $915mm in revenue in 2019. It’s now a publicly-traded company with plans to move into the video game space.
Raised $119,196 on Kickstarter
Though Wool Runners (now known as Allbirds) had a launch of nearly $120k, that was just the start. As of February 2021, the company is now worth a billion—that’s right, a billion—dollars. Not bad for that modest crowdfunding raise!
Raised $171,560 on Kickstarter
Although it’s hard to believe, Purple launched its first mattress on Kickstarter in 2015 and drew only 320 backers. Today, the company is worth $187mm and has had to create waiting lists for their ultra-popular mattress, since so many people want them that it’s hard to keep up with demand.
Big money doesn’t mean big success
Let’s look at the other side of the coin. It might seem like raising a million dollars is a surefire way to set yourself up for success, but it’s just not true. Let’s look at a couple of well-known crowdfunding cautionary tales.
Raised $13,285,226 on Kickstarter
This product looked too good to be true—and that sadly ended up being the case. This cooler should have been the greatest thing since sliced bread, but they only ever shipped around 2/3 of their pledges, and ended up going out of business in 2019.
Raised $33,118,829 over two projects on Kickstarter
As of this article’s posting, Pebble has the #1 and #4 most-funded projects in Kickstarter history. Their first model raised more than $20mm on its own, but they had to shut down operations and sell their business to Fitbit not long after their second campaign wrapped up.
Between the stats on how much Kickstarter projects usually raise and the proof that a million-dollar goal has nothing to do with long-term success, setting a reasonable funding goal is the clear key to long-term success for your product and your brand. Your crowdfunding campaign is just the start, and if you want to make sure your company is around for a long time, setting realistic goals is the best first step you can take. That way, you can build upon them as your company grows, leading you to long-term success—even if you start off with a modest crowdfunding raise.
Ready to get started crowdfunding your product? Want to learn about a reasonable goal for your project, or any other part of the crowdfunding process? Apply to work with us today!