One of the arguments behind crowdfunding is that by sourcing money from the crowd, you may enforce structure and transparency on companies earlier in their lives. That, in turn, could help them to demonstrate a market for their product or service, make potentially more informed decisions, and attract follow-on investors.
While crowdfunding is still in its nascent stage, we set out to find some early signals of how it’s meeting these promises.
We conducted in-depth interviews with 87 companies that were successful in raising money via crowdfunding campaigns. The survey looked at three forms of crowdfunding: rewards, debt, and equity. Here’s what we found.
Does Crowdfunding Improve Sales?
We wanted to test the hypothesis that a crowdfunding campaign can also serve as a marketing campaign. Experts regularly assert that crowdfunding increases exposure about a company and their product or service and, in doing so, leads to net new product sales.