What Makes Crowdfunding Projects Successful ‘Before’ and ‘During’ the Campaign?

This paper sets out to deepen the understanding of crowdfunding campaigns, and investigates a hand-collected database of 500 projects taken from Kickstarter.com, the biggest crowdfunding website in terms of revenue. Through a logistic regression and mediation model, our study tries to explain which are the predictors that can help reaching the funding goal of a crowdfunding initiative. The first part of the study aims at predicting the chances of projects being successful based on a pool of ex-ante predictors. The results revealed that the presence of a video explaining the product’s features and adding special offers for early backers are highly correlated with a higher probability of success. In contrast, displaying a Facebook profile with less than 500 friends, having the time to market too long and setting the funding goal too high will lower the odds of success. The second part of the study consists of a mediation model carried out in order to understand the relationship between the ex-ante predictors, a list of proposed mediators that change during the campaign, and the rate of funding. We were able to discover two important effects: the presence of special offers for early backers and showing commitment in the platform by helping other projects are two good mediators influencing the relationship between the number of purchases of the product and the rate of funding.