How To: Become a Crowdfunding Success Story

While news outlets love to headline with rock-star crowdfunding successes—like Pebble Time watch, which raised a record $1 million in 49 minutes (and more than $20 million at presstime), and the Coolest Cooler, which has brought in more than $13 million—there are untold failures, too. Consider the statistics from the granddaddy of crowdfunding platforms, Kickstarter. Of the 20,000 campaigns launched on the platform each year, only 38 percent reach their goals, and another 25 percent fail to be accepted to the platform. Despite the many successes, the average amount most completed campaigns garner is less than $10,000, and a little more than 2 percent rake in more than six figures. Yet crowdfunding can’t be ignored as a way to raise money for new businesses or to launch new products. The practice contributed $65 billion and 270,000 jobs to the global economy in 2014, according to estimates by Fundable, one of the more than 500 platforms in the world. “Raising $1 million or more is like winning the lottery—it only happens if the wind and moon and stars align,” says Wall Street veteran Deborah Jackson, founder and CEO of Plum Alley, a crowdfunding site for female entrepreneurs, and co-founder of Women Innovate Mobile accelerator. “But unlike going for traditional financing, crowdfunding is a very easy, low-risk way to test products and ideas and get successful ones off the ground.” To become one of the success stories, here are some things you should consider: