Three crowdfunding success stories and how they did it

Securing financing to start a new business or project can be challenging. For most businesses, venture capital (VC) funding is not feasible because gaining access to a venture capital firm is difficult. According to an article published by Harvard Business Review, only one deal is selected for every 101 a VC firm considers. Additionally, only 10 per cent of deals are made from cold-pitching, meaning that most VC deals are made from pre-existing connections or the VC initiating contact themselves.

Bank loans can also be difficult to obtain. Securing a bank loan in Canada is usually only possible for businesses already operating and generating revenue. Loans must also be repaid with interest, even if a business or project fails.

So, is it possible to finance business ideas without these traditional gatekeepers? One option is crowdfunding, which is a form of fundraising where a business asks many people for a small contribution to the venture. Although crowdfunding has existed for several years, only some businesses successfully raise enough funds to launch their ideas.

Read ahead to learn more about successful crowdfunding stories and what sets them apart.

Hike!

Hike! is a card game about racing huskies that launched in 2022. It raised over $150,000 on the crowdfunding platform Kickstarter, exceeding its roughly $9,000 goal. Snowy Board Games, the creator of Hike!, was not a veteran of the card game space. Hike! was its first-ever game, and its Kickstarter campaign was its first attempt at crowdfunding. How did the campaign work out so well, despite the company’s lack of experience?

One answer is that they chose the right crowdfunding platform. Board games are well-funded on Kickstarter. Polygon reports that in 2022, the funding success rate for table-top games was 76.3 per cent, and the average funding for a successful table-top game on Kickstarter was $58,000. By choosing Kickstarter for its campaign, Snowy Board Games gave itself a significant advantage because it already had a large chance at success based on previous campaigns.

That is not to say that Hike!’s success was only a product of statistical likelihood. The fact that it raised more than average crowdfunding campaigns is a testament to that. Beyond choosing the right platform, Snowy Board Games strategically asked for funding when it could show a nearly complete product. Snowy Board Games had already designed their game, written their rules, commissioned an artist and assembled a final game so investors could see exactly what they would get if they backed the project.

By showing a high-quality, near-finished project to an investor space with a high likelihood of financing, Hike! achieved its goals.

Loish

Lois van Baarle, known as Loish, is an artist who attracts more than 10,000 monthly patrons on Patreon. Patreon is a membership platform that provides content creators with business tools to run a subscription service, enabling them to earn a monthly income by offering rewards and services to their subscribers.

Loish is a career artist and has worked with companies like LEGO, Amazon and Coca-Cola on a freelance basis. She creates unique, high-quality art that attracts both fans and clients. What makes her stand out next to the countless other artists trying to make a living on the platform?

Loish’s success can be partly attributed to her reputation as a well-established expert before she started a Patreon. When new followers discover her Patreon, she already has an impressive portfolio to showcase. Loish also gives an incentive to subscribe to her Patreon by offering art lessons.

For $10 per month, she offers art tutorials, monthly Q&A sessions, drawing challenges and access to her Discord chat room, where patrons can come together and form a community.

Loish has picked a high-demand target market while delivering ongoing high-quality services to her supporters, ensuring continued success.

BooCooPets

Some businesses or projects don’t fit in crowdfunding frameworks like Kickstarter or Patreon. BooCooPets, Inc. is one of them. BooCooPets is a website for everything related to pets and aims to be a central hub where pet owners can find meetups, shopping tips, travel guides, medical services and searchable information on pet rescues.

BooCooPets posed an interesting problem. It needed crowdfunding, but its goal was to start a new business rather than launch a product or service. Its solution was equity crowdfunding. Equity crowdfunding is when investors purchase a portion of a company in exchange for a stake. Equity crowdfunding works because it directly connects big and small investors and companies. Anybody can be an investor, which can be attractive for those who want to invest in companies with limited capital. However, it can be challenging to get traditional equity investment.

BooCooPets, originally named Kaboodle, launched on the equity crowdfunding website Wefunder and had multiple rounds of successful funding, the last of which raised over $60,000. What led to its success?

BooCooPets had many things investors look for, including a solid business case proposed by a career entrepreneur with a great track record. Larry Loyd, founder and CEO of BooCooPets, has an entrepreneurial history, including opening six restaurants, an interior design firm and a logistics monitoring company. Beside him, COO and co-founder Art Pedroza is vice president and managing director.

Is crowdfunding right for you?

Even though crowdfunding is a viable way to secure funding, it doesn’t apply to all cases and is not a guarantee. It’s important to carefully consider whether or not it applies to your individual business situation. Even though crowdfunding is easier to secure than traditional funding channels, it’s not risk-free and usually requires time and monetary investment.

Success stories like Hike!, Loish and BooCooPets prove that it has found a legitimate place in the business world. Crowdfunding has given entrepreneurs more democratized funding opportunities, allowing anyone with a great idea to potentially turn it into a reality.