Crowdfunding: Democratized Participative Financing

Crowdfunding, or collective financing, is a method of raising funds from a wide audience, primarily via the Internet. This article, presented by Kune.tech, aims to demystify the concept of crowdfunding and explain its importance in launching innovative projects.

What is Crowdfunding?

Crowdfunding allows individuals to finance projects or businesses by making small contributions via online platforms. This method democratizes access to financing by allowing projects to come to life with community support.

Often, crowdfunding campaigns promise contributors a reward if the project succeeds. Like traditional financing, no results are guaranteed in the campaign. In other words, contributors accept the risk because they believe in the project.

Why is Crowdfunding Popular?

Accessibility

Crowdfunding makes financing accessible to everyone, eliminating traditional barriers associated with finding funding.

Market Validation

It offers a platform to test and validate market interest for a product or idea.

Community

It builds a community around the project, generating support and natural promotion by the contributors.

Cost of a Crowdfunding Campaign

Crowdfunding platforms primarily offer two services:

• showcasing your project in their showcase;
• collecting donations and transferring them to you.

The cost for these two services is calculated as a total percentage of contributions. For example, on Kickstarter, in France, this percentage is set at 8% plus 20 cents per donation (source).

« For a campaign at €50,000 with 500 contributions, the cost of Kickstarter is €4,100 »

To this service cost, you must add your own communication and marketing costs, including the cost of creating the campaign and its promotion on social networks or in SEA.

Also include in your estimates the cost of rewards in case of success.

An Alternative Approach to Crowdfunding

In some cases, project initiators do not fully benefit from the notoriety of the crowdfunding site and would prefer to use their own reputation. This is the case, for example, with content creators who already have a trusted relationship with their audience.

In this case, the costs of hosting a project on a traditional site are largely "wasted," for example, on Kickstarter, only 3% are intended to cover the fundraising fees (a reduction of over 50% of costs compared to 8%).

Following this observation, a group of gaming influencers and Kune.tech launched Kunekune, a platform for creators, by creators:

Kunekune aims to promote its image by the quality of selected projects rather than by the quantity of self-promotion and therefore projects deducted. Where a traditional crowdfunding site needs to invest massively in advertising on its own image, Kunekune ensures its self-promotion thanks to two things:

• a selection of quality projects that shine a light on Kunekune;
• a community composed of creators who own Kunekune and ensure its promotion.

In other words, Kunekune takes into account the indirect contribution a project has on its brand image.

Tips for a Successful Campaign

• Preparation: A well-prepared campaign with clear objectives is crucial.
• Transparency: Contributors expect total transparency on the use of funds.
• Engagement: Interacting with the community is essential to maintain interest and trust.

Conclusion

Crowdfunding is more than a financing method; it's a movement that fosters innovation and collaboration. At Kune.tech, we understand the importance of connecting with a community to succeed, and we are here to help navigate this complex ecosystem.

To learn more about crowdfunding and how it can serve your project, visit Kune.tech and get expert advice, especially thanks to the expertise of Benjamin Daniel.