Who Are The 'Backers' And Why You Need Them?

As a way to finance their innovative projects, entrepreneurs are increasingly turning to crowdfunding. Crowdfunding requires relatively small investments from many consumer investors. The question is: who are the people who give money to those ventures? Those people are called ‘backers’ and in the few paragraphs below, you will learn everything about who they are, and why they are so valuable for your project.

First, let’s define the word ‘backer’; Backers are individuals who pledge money to join campaigners (project owners) in bringing to life a specific project. Most of the popular platforms such as Kickstarter and Indiegogo are ‘reward-based’, meaning that the backers get a physical item in return for the money they give a project. Despite the exchange nature of it, those platforms are not shops, but rather a way to sponsor creative processes by interested supporters.

Who are the backers?

It is possible to think of the crowdfunding backers as the earliest possible adopters, who could be even more valuable than typical early adopters.

On the average reward-based crowdfunding platform, male backers greatly outnumber female backers, 75 to 25 percent. Studies also show that women are more inclined to fund projects to help people and organizations while men are more inclined to fund new projects and inventions, which often results in receiving an item in return.

As for the average age groups that support crowdfunding projects, the 18-29 age group represents an average of 30 percent of all backers. They are followed by the 30-49 age group. The 65+ age group is barely present on any crowdfunding platform.

In a study published in 2016, it was calculated that 22% of American adults had contributed to a crowdfunding campaign. Today, an average of 65% of all backers are located in the US. Campaigns that are not in English have much fewer chances of success, and campaigns that have free or cheaper shipping to the US tend to show better results.

Although 53% of worldwide traffic comes from mobile phones, 62% of the traffic to crowdfunding campaigns comes from desktop.

If you have ever launched a crowdfunding campaign, you may have noticed a U-shaped in the graphic of your contributions. This is because backers are more likely to contribute at the very beginning and very end of a project than in the middle of it. The sense of novelty can explain the first line of the U-shaped, while the sense of urgency can explain the second line of the U that generally appears in the last week of the campaign.

Why are backers so valuable?

Often, crowdfunding backers play an active role in the innovation conversation. When thinking about crowdfunding, most people think of the fundraising aspect as the main or only advantage, while the importance of the backers is often overlooked. In reality, the backers might be even more valuable to a campaign than the funds it raised. A study shows the number of backers a campaign attracts is more indicative of the later chances of success of the product on the traditional market than the amount of money raised. The reason behind this phenomenon is in part because of the feedback, information, and inspiration that the backers contribute through the crowdfunding platform. Altogether, these elements have been shown to enhance future market performance, and improve innovative focus.

Backers also generate one of the most important elements for any campaign; word-of-mouth awareness. As mentioned above, many backers get involved in a project by taking an active part in it. By doing so, they become part of your project and it often leads them to becoming advocates on the internet and within their peers. As great as it sounds, it is a double-edged sword, especially when it comes to new products and innovations. If the backer feels like he or she has been duped in any way, they will deploy everything they can to share their bad experience with the world. The most common causes for this are when the project did not deliver by the estimated shipping time, or when the backers feel like the item they received does not live up to what the campaign claims. On the other hand, if they receive and love the item they backed, they will share the love for your brand. From there, you can work with them to advocate for your brand.

Conclusion

Crowdfunding is about much more than money. Cowdfunding is about creating a relationship between a project owner, whether it's an individual or a company, and an interested audience. The backers who constitute that audience are actively looking for innovative project they can be the first to know about. Backers have a tendency to take an active part in the success of the project by spreading the word, giving feedback, or providing insights. Even though this aspect of crowdfunding is often overlooked, I believe that it is the biggest advantage of crowdfunding.