Sometimes crowdfunding campaigns seem to magically hit every goal they give themselves, soaring past every obstacle and exceeding all expectations while raising a ton of cash in the process.
Other times, campaigns that look great before they launch end up being total flops.
What separates successful campaigns from those that are dead-on-arrival? The exact answer can be tough to figure out, but one way you can help make sure your own campaign starts off on the right foot is by choosing an appropriate and reasonable fundraising goal.
So how do you decide what an appropriate goal is? There are a few steps you can take to arrive at your campaign’s unique number:
This may sound obvious, but crowdfunding is not inherently about raising money -- it’s about achieving goals. And because of the wide variety of goals that can be achieved through crowdfunding efforts, different strategies are necessary for different situations.
For example, if you’re raising money for a business or product, you might find that you would like to raise a much higher amount of money than you necessarily “need” to make your business or product work. That’s because you can always still use the money that you raise in some way in terms of your business, so, for this reason, having more capital to work with is almost always a good thing.
Meanwhile, if you’re raising it for medical reasons or to fund education or refinance existing debt, you may not want to raise more than a certain amount of your goal. In those situations, you’re trying to avoid taking on additional debt because in those situations there’s not always an easy way to use this additional money to your advantage.
How all of this affects your campaign is an important thing to know when deciding on your goal amount.
In a nutshell: think about what amount of money you would like to crowdfund in order to consider your campaign a success, but also figure out the smallest amount you could raise and still accomplish your goals.
For simplicity, let's call this number Amount A: the smallest amount of money you need in order to accomplish your goal.
If you’re raising money through crowdfunding, then you probably have some idea of what amount of money you’ll need to accomplish what you’re trying to do. That is to say, you know how much it costs to rent the property you’re looking at, or how high your medical expenses are, or whatever reason it is you’re raising money.
However, it’s also likely that you have some alternative way of covering some of that money, in case your crowdfund doesn’t work out. Whether that’s through savings, a bank, gifts from family or friends, or any other source, this reserve funding is essential to consider when trying to decide on your final goal amount.
This reserve funding is your Amount B: the amount of this goal you'd prefer not to cover, but could if you absolutely needed to.
What you do next is fairly simple: start with the first amount, and take away the second amount.
Amount A - Amount B = your smallest possible fundraising goal
This final number should, in most cases, be the final goal amount that you list on your campaign.
Why such a low number? Because the smaller you can make your final crowdfunding goal, the more likely you are to reach it. And the more likely you are to reach your goal, the better it looks to anyone thinking about contributing to it.
The obvious reason why having a small, comparatively easy-to-reach crowdfunding goal is a good thing is that you’ll probably actually reach it -- meaning that you’ll actually get the chance to try to bring your campaign goal to life.
But perhaps an unexpected benefit of having a smaller goal is that people like to support winning teams.
If you reach your goal early or get close to it early, it’s much more likely that backers will lend to your campaign. That’s because to them, it will look like you already have plenty of support, making you a safer bet than you would have been otherwise.
It’s also true that campaigns that once campaigns hit their goal, donations often increase (particularly for businesses or products) since backers suddenly feel like they’re supporting a winning team rather than something untested.
In this way, setting a lower goal can actually make it much easier for a campaign to raise the amount they actually want to raise, particularly if that goal might have originally seemed unrealistic.