CCA Research: Does Crowdfunding impact job creation, revenue and follow-on investment?

CCA | Jason Best and Sherwood Neiss | February 10, 2014

Research Overview

In August 2013, Crowdfund Capital Advisors conducted research on several hundred companies in North America, Europe and Africa that had completed successful rewards, debt or equity-based crowdfunding campaigns from June 2012 to June 2013.

All of the campaigns measured in this research were to 'for profit' businesses as opposed to philanthropic, and were randomly selected from major portals such as Kickstarter, Indiegogo, Crowdcube, Seedrs, WiSeed and others.

Key Findings

Revenue Impact:

• Quarterly revenues increased by an average of 24% for successfully crowdfunded companies (via rewards, equity or debt)
• Quarterly revenues increased by 351% for equity-based crowdfunding companies

Job Creation Impact:

• 39% of companies who had success with equity or debt-based crowdfunding hired an average of 2.2 new employees post-raise (an additional 48% indicated that they intended to hire new staff with use of proceeds)
• 28% of companies who had success with reward-based crowdfunding hired an average of 2 new employees post-raise

Follow-on Investment Impact:

• Within 3 months of a successful crowdfunding campaign, 28% of the companies had closed an angel investor or venture capital round
• An additional 43% were in discussions with institutional investors

Campaign ROI:

• On average companies invested 135 hours to execute a 45 day crowdfunding campaign and spent just over $2,100 on marketing (i.e, social media, video) translating into a positive ROI of $813 returned for every hour invested.

View:  National Canadian Crowdfunding Survey Results

Download the CCA Research Report  Now (14 page PDF)

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