Crowdfunding Pitfalls to Avoid


Many companies now add crowdfunding to the list of potential financing options, just next to banks and investment groups. Crowdfunding in this context considers both equity based investment and product sales. Websites such as Seed Invest or EquityNet are designed for equity investment, dividing shares of private companies so that several investors may acquire ownership. Other websites, including Indiegogo and Kickstarter, are designed to exchange financing for prototypes or initial products.

Pro Business Plans has analyzed the failed crowdfunding campaigns of 200 companies across the United States. Our analysis has determined a few breakout trends that the failed campaigns shared which may provide insights into the purpose behind the failure. By avoiding these crowdfunding pitfalls, your campaign may have a better chance of reaching expected results and helping your company to raise the money it needs to gain traction in the market.


Failing to Maintain Engagement

Seven out of ten of the unsuccessful campaigns that we have analyzed lacked engagement. This means that they lacked an indication that they were being managed. Queries by viewers lacked response, default questions were incomplete or left information to be desired. The most successful campaigns managed to continuously engage users by responding to their questions and had the most complete profiles. The measurement was done at the outset of campaigns, in order to ensure that complete profiles and user engagement was a result of success that the campaigns were having.


Having an Inadequate Team

We have seen many investments fail because the team lacks a complementary skillset or experience to run a successful company. If the startup is a one person operation and falls short on any one area, it means that it must be outsourced, which will increase the burn rate and raise the risk levels. Moreover, a strong founding team has historically been shown to improve the performance of startups and increase the probability that successful exits are achieved. There are not specific rules to the structure of a startup team, however there generally is a balance between technical engineering knowledge and business acumen. Having a good combination can not only increase your chances of funding, but also increase the overall potential for success.


Not Promoting Outside the Platform

A key determinant of success for the crowdfunding platform was whether or not the company received exposure on the Crowdfunding website. Exposure was acquired by firms that have a lot of activity on their crowdfunding campaign, which was achieved by a strong early start. Crowdfunding managers should seek to immediately get traction on the platform by building and maintaining demand through external PR and their connection base. Starting with business associates and scaling to public relations, the campaigns that we analyzed should be receiving maximum exposure in order to have the highest probability of success.


Lacking Visual Demonstrations

Quality visuals including product demonstration videos and pictures of the founding team had a positive correlation with success. We believe that this is partially because successful campaigns encourage managers to upload more information to the company page, but also because of transparency and trust. By understanding more about the company, you can build an emotional bond with backers or trust with investors, both that the money will be well managed and proper returns reached. Do not be afraid of putting images of yourself and founding team on the platform, in fact, the most successful campaigns all had at least one image of the founders and many had videos of them speaking.


  1. I simply want to say I’m very new to blogging and site-building and certainly loved your web page. Most likely I’m likely to bookmark your blog . You actually come with amazing stories. Thanks a lot for revealing your website.

  2. Good article. I discover something more challenging on various blogs daily. It will always be promoting to review material from various other authors as well as practice a something from their shop. I?d choose to use some with the web content on my blog site whether you don?t mind. Natually I?ll give you a web link on your internet blog. Thanks for sharing.

  3. I am curious to find out what blog platform you have been working with? I’m having some minor security problems with my latest website and I would like to find something more safeguarded. Do you have any solutions?

  4. When I initially commented I clicked the “Notify me when new comments are added” checkbox and now each time a comment is added I get four emails with the same comment. Is there any way you can remove people from that service? Bless you!

  5. The following time I check out a blog, I hope that it does not dissatisfy me as long as this one. I suggest, I recognize it was my choice to read, however I in fact assumed youd have something fascinating to claim. All I hear is a bunch of whimpering regarding something that you can deal with if you werent also hectic trying to find interest.

  6. The following time I read a blog, I really hope that it does not disappoint me as high as this set. I suggest, I know it was my selection to read, but I really thought youd have something fascinating to say. All I listen to is a number of whining regarding something that you might take care of if you werent too active trying to find focus.

  7. Oh my goodness! a remarkable short article dude. Thank you Nonetheless I am experiencing concern with ur rss. Don?t understand why Unable to subscribe to it. Is there anyone obtaining the same rss problem? Any person that recognizes kindly respond. Thnkx

  8. Oh my goodness! an incredible post dude. Thanks Nevertheless I am experiencing concern with ur rss. Don?t recognize why Not able to register for it. Is there any person obtaining identical rss problem? Anybody that understands kindly respond. Thnkx

  9. An impressive share, I simply given this onto an associate who was doing a little evaluation on this. As well as he in fact acquired me breakfast because I found it for him. smile. So let me reword that: Thnx for the treat! However yeah Thnkx for investing the time to review this, I really feel highly concerning it and like reading more on this topic. Preferably, as you come to be proficiency, would certainly you mind upgrading your blog site with more details? It is very practical for me. Big thumb up for this blog post!

  10. It?s hard to discover well-informed people on this topic, but you sound like you recognize what you?re speaking about! Thanks

  11. A motivating discussion is worth comment. I do think that you need to publish more about this issue, it might not be a taboo subject but usually people do not talk about such topics. To the next! Many thanks!!

  12. When I originally commented I clicked the -Alert me when brand-new remarks are included- checkbox and also now each time a comment is included I obtain four emails with the exact same remark. Exists any way you can remove me from that service? Thanks!

  13. The next time I review a blog site, I wish that it does not disappoint me as much as this. I indicate, I know it was my option to review, however I actually thought youd have something intriguing to say. All I listen to is a bunch of yawping about something that you might take care of if you werent also busy looking for interest.

  14. I was extremely delighted to find this web-site. I wished to thanks for your time for this terrific read!! I certainly taking pleasure in every bit of it and I have you bookmarked to look into brand-new things you blog post.


Please enter your comment!
Please enter your name here