Factors for success in repeat crowdfunding: why sugar daddies are only good for Bar-Mitzvahs

ABSTRACT

Some see crowdfunding as a potential replacement for existing long-term funding mechanisms, especially in cultural production. We look at the factors that correlate with repeated crowdfunding usage, analyzing data from the popular crowdfunding site Kickstarter. We analyzed data on projects from four of Kickstarter's categories. We found that, generally across the four categories, a higher pledged-to-backers ratio diminished the odds of a second project, a higher number of backers increased the odds of a second project, and funds raised above a project's goal also increased the odds of a second project. A greater number of smaller backers, as opposed to one large backer (thus ‘sugar daddy’), are beneficial. Increasing one's network beyond immediate friends and family is vital to continued crowdfunding efforts, as there are social strings attached to financial support from friends and family. Lastly, raising funds above and beyond the set goal may signal to the project creator the presence of a fan community and convince the creator to use crowdfunding again.

KEYWORDS:

• Crowdfunding
• Kickstarter
• finance
• social networks
• culture industries

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Dr Roei Davidson is a senior lecturer at the University of Haifa’s Department of Communication. He studies the intersection of economics and media from both institutional and textual perspectives. He examines the experience of working within the culture industries as well as the representation of economic life in journalism. He received his Ph.D. from the University of Michigan. His work has been funded by the Israel Science Foundation and the German-Israel Foundation. He is currently a visiting scholar at IC², The University of Texas at Austin. [email: [email protected]]

Dr Nathaniel Poor is an independent researcher in Brooklyn, NY. He studies online communities and online interaction with a range of methods and approaches, such as participant observer, computational social science, and others. Some of his focus includes game communities, legal and technological issues, and historical factors. Currently he works at Civic Hall in New York, a center for bringing together civic innovators from around the world. [email: [email protected]]