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In Crowdfunding, the Arts Come Ahead

In recent years, crowdfunding has quickly become one of the best ways people directly influence projects about which they car. Instead of having to go to investors creative individuals can go to the largest marketplace in the world to sell their ideas, but these projects have a high rate of falling through. Kickstarter reports that only 36.8% of startups receive total funding, but this only tells part of the story. The category of the project has a large effect on whether or not they are fully funded. I assessed more than 60,000 different startups, grouped them based on their category, and took a sampling of the largest groups; below are the results.

Here we can see that there is a stark difference between different categories, some even seeing a 3x disparity. The majority of the highest success rates for these categories come from the arts. This may be because a lot of them come from already established entities that are coming to their audiences for more support (source 1), whereas a technology startup may be less known and therefore less likely to gain traction. One other thing to note is that technology has the most startups in the dataset, accounting for about 15 percent of all startups, so there is a market dilution of far too many projects and not enough backers to support them. This may seem unfair, but there is a flip side to this: Kickstarter is not the primary source of capital for these kinds of projects. Venture capital firms are always looking for the next big tech startup, and there is money there for a truly original idea. The arts, on the other hand, are not so easily funded; mainstream investors do not see value in art because the guarantee of profits is not as high, but by going directly to the people that would enjoy the product instead of people that are motivated by profits, we are left with more creative individuals creating art that they enjoy making and that people enjoy consuming. It is my opinion that if you are investing on Kickstarter, you should support causes that may not receive funding otherwise. This is how we get projects that may appeal to a small portion of the population on a grand scale, but leave that niche extremely satisfied with a body of work which would otherwise be impossible.

Source 1 -https://www.testbig.com/practice/sat-writing-and-language-og-2018-test-5-rethinking-crowdfunding-arts

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COMMENTS: 9
  1. April 27, 2019 by James Howe Reply

    This makes sense I feel, people are really attached to art that they like.

  2. April 28, 2019 by Samiha.Datta Reply

    Nice article, Manav! I found your analysis of why campaigns funding the arts, as opposed to technology, tend to have success quite interesting.

  3. April 28, 2019 by Eva Batelaan Reply

    Wow, Manav! Though my computer would not load your visual, I was very impressed by your thorough and thoughtful analysis.

  4. April 28, 2019 by Annie Ma Reply

    Ooh, this is so interesting! Your analysis of arts vs. tech startup funding makes a lot of sense, and I like how you included a very concrete example of what we can do! (also – i see you with the SAT prep lol – good luck on all your standardized testing endeavors!)

  5. April 29, 2019 by Bonnie Smith Reply

    Interesting, Manav. Thanks for your hard work on this and in this class!

  6. April 29, 2019 by Natheir.Abu-Dahab Reply

    I think this really makes sense, people like to crowdfund art simply because it’s too difficult to get funding any other way, regular people both understand that and many appreciate arts, but investors, for the most part, don’t see the profit or value in it, unless it’s already established as a good piece.
    There are a few exceptions, a really interesting art-related ‘project’, is SpaceX’s upcoming Dear Moon mission: https://dearmoon.earth/

    Thanks for sharing!

  7. April 30, 2019 by Nikhil Goel Reply

    Interesting idea! I feel like I’ve heard this before, and I know a lot of people market tabletop games on crowdfunding websites.

  8. May 01, 2019 by Siddhanth Reddy Reply

    This is really interesting. Your analysis is very detailed and thoughtful

  9. May 02, 2019 by Joseph.Wang Reply

    Good article Manav. Gives a lot of hope and opportunity for me if I pursue the music field.

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