Business & Startups

Crowdfunding remains a relatively new method of corporate financing in Europe, although it is already well established in the United States. The core concept is remarkably straightforward: funds for a project or business start-up are raised from numerous small investors, without the involvement of banks or other institutional intermediaries. Over time, various subtypes of crowdfunding have emerged, primarily distinguished by what investors receive in return. In some cases, investors become shareholders in the company; in others, they are promised a fixed return on their investment. Sometimes, the reward consists of non-monetary benefits, and in certain instances, donations are simply solicited without any direct compensation.

For many companies, crowdfunding represents an attractive alternative to traditional financing. The costs are typically lower, and it often enables the realization of projects that banks might otherwise reject.

A Recent Study on Success Rates

Not every crowdfunding campaign achieves its goal. On average, only 40 to 50 percent of campaigns reach their targeted investment amount, while the remainder fall short. A recent Swiss study reveals that failure is rarely marginal—most unsuccessful projects miss the mark by a wide margin. Only two percent of failed campaigns manage to secure even half of their funding target, and more than 60 percent do not reach even five percent of their goal. This indicates that a significant number of projects fail to convince almost any investors.

It is important to note that these investors are not professionals who evaluate projects based on similar criteria. Instead, they are typically small private investors; in the referenced study, the average individual investment was just 128 Swiss francs. This suggests that the herd instinct, well known from major financial markets, also plays a role in crowdfunding. When enough investors join in, others are likely to follow. This makes a strong start to a campaign all the more critical.

The Importance of a Strong Start

The study demonstrates that the first few days of a crowdfunding campaign are decisive. On average, successful projects raise ten percent of their total funding on the very first day. Approximately one third of these projects are fully funded within the first ten days. Conversely, campaigns that fall significantly short in the initial days rarely manage to attract additional investors later on. Just a handful of extra investors on day one can make the difference between success and failure. Given the crucial importance of the initial phase, it is essential to carefully consider the timing of your project launch. After all, it would be unfortunate to miss your target simply because potential investors are not paying attention at the right moment.

Good Timing Is Crucial

The study clearly shows that weekends are the worst time to launch a crowdfunding campaign. Not only is a weekend launch disadvantageous, but starting too close to the weekend can also be detrimental. The optimal days to launch are Monday and Tuesday. Successful projects that begin on these days achieve an above-average 40% of their total funding within the first ten days. Investor behavior also varies throughout the day: on weekdays, most investments are made relatively early, while on Sundays, the majority occur around lunchtime. Therefore, if you launch your project too late in the day, you risk missing out on the particularly important momentum of the first day.

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