Why Do Crowdfunding Projects Fail?

crowdfunding projects
Why do crowdfunding projects fail? Here are six reasons!

Crowdfunding is a unique way for companies to raise funds for a new project or venture. There have been numerous successes with companies raising millions of pounds through effective campaigns. But for every crowdfunding campaign that goes well, there are more that aren’t a success.

There are many reasons why crowdfunding projects fail and here are some of the biggest mistakes that can potentially happen during a campaign.

1. The Crowdfunding Project Isn’t Advertised Early Enough

Even before you create the funding level or start taking payments, you need to ensure that you are generating interest in your crowdfunding project. This means that for three to four months before the project starts you are advertising and building a mailing list.

There are various ways that you can get this started, including blogging, social media and PPC. All of these need to be linked to a mailing campaign where you keep in contact with potential backers and finally send a mailer out when your crowdfunding campaign starts.

2. Not Enough Trust

You can’t just state what you are trying to do. You need to demonstrate that you have the skills, product or experience to complete the project once you’ve reached your funding level. There have been several cases recently where funding has been reached but the crowdfunders have yet to deliver on their promises.

By demonstrating why you are going to succeed, you can put away those fears in the minds of backers.

3. Not Enough Initial Momentum

The best campaigns always have a great start. If you want to run a successful crowdfunding campaign, you will have a better chance of reaching your target if more of your target is funded early. Research has found that those closer to their target generate more interest in their brand.

This is where marketing your project before it starts can help. On your first few days, you need to be marketing to your list and persuading backers to contribute to your campaign.

4. Too Reliant On The Crowdfunding Platform (And Your Website)

You aren’t going to be successful if you are only going to market via the crowdfunding platform and your website. This will only attract casual browsers on the crowdfunding platform and those searching via search engines with SEO.

Instead you need to be embracing numerous marketing avenues. Options include blogging, social media, email marketing and possibly PPC. However, some of these require significant time investment (and PPC needs financial backing) to be utilised for your crowdfunding project.

By creating a marketing plan with various intersecting marketing avenues, from which backers can choose which to follow, you can achieve better results.

5. Not Considering Offline Marketing Avenues For Your Crowdfunding Project

While the internet will likely be how the majority of your investment will be found, don’t forget about your local, offline audience. People like to back local projects and businesses and see the benefits of them achieving success. So go out on the street with leaflets and information and speak to your offline audience. Let them know what they can get.

This can also be pretty powerful if you take a physical prototype with you and show potential backers what they could be getting in return for their investment.

6. Not The Right Crowdfunding Project Target

This is probably the easiest mistake to make. You know how much you need to develop your project but do you include the costs for shipping the rewards to your backers? Do you include their production costs, inflation, etc? Or have you set too high a target so your potential backers are going to reconsider whether they should back you or not.

Remember, the higher the amount of your crowdfunding project goal, the harder it is going to be to achieve it. Think carefully about the maths, do your homework and ask for only what you need.


Your crowdfunding project could be a great success or a failure. It depends on how you set it up, market it and finally, communicate with your backers. Get these elements right and you can have a great project.

How is your crowdfunding project going? What is your target?

Let us know in the comments below.