Crowdfunding: a key to innovation financing
Sometimes a project can just be too innovative in order to seek traditional financing. This is when crowdfunding (CF) can fill the gap, as the V3PO campaign proved.
V3PO is a project for Vegetative propagation of plants in orbit initiated by three students of the Agricultural and Scientific School in Ravensburg, Germany. The team obtained NASA’s commitment to bring the experiment to the International Space Station (ISS) if V3PO would bear mission’s significant costs.
Having tried to unsuccessfully attract traditional financing instrument, the V3PO team realised that their idea was too innovative and abstract. So they thought: Why wouldn't we give crowdfunding a shot!
Crowdfunding learning curve
The first campaign failed because the target was not reached within the deadline. The second CF campaign, launched on the same platform, Sciencestarter.com, managed to raise €40,540 in 60 days thanks to 50 supporters from Germany. The CF model chosen was reward-based.
Being already acquainted with the CF method from the first campaign helped the team succeed in the second one. However, additional factors pulled up alongside experience.
For instance, a network is always a key player for a successful CF campaign. V3PO’s team worked hard before the launch of the campaign in order to create one. Involving bigger actors, mostly based on contacts of friends and families, certainly payed back. Additionally, according to the team, the support provided by the platform was very helpful in the preparation of the campaign. Last but not least, the commitment of NASA boosted the visibility of the project.
On the other hand, V3PO’s team faced the following challenges:
- The platform they used was entirely in German which made it difficult to engage with foreign investors.
- This was even a greater problem because Germans, on average, do not seem to be very familiar with CF. Namely, many people did not trust funding a project via an online platform.
- Furthermore, Sciencestarter.com has had a short track-record of 2 years in the CF market so its reach was limited.
Keys to the space: Network and Guidelines
Crowdfunders highlight the solid network and the guidelines as key success elements, which allowed the team to bring the experiment to the International Space Station. The guidelines were provided mainly by the platform. The networking activity was intensely carried out before the launch of the campaign. These factors helped to overcome the difficulties in raising funds due to people’s doubts about this alternative way of financing.
Download the full study here: http://bit.ly/V3PO4CF
Now, some questions for you!
What are, according to you, the best ways to raise awareness about crowdfunding and its potential for science funding?