The rule of the power of 100

The rule of the power of 100 is a powerful tool to reach and smash your funding targets. It is one of the 20 golden rules of crowdfunding. To understand it the first thing to keep in mind is that in crowdfunding the 100% of your financial target is not the maximum that you can raise.

Let’s dive into this fundamental rule with some examples.

What is the rule of “The power of 100”?

The rule states that a campaign that reaches 100% of their financial objective with enough time will see its funding rate increased significantly. Let’s see a couple of examples.

In the rewards crowdfunding camp, we have a great and recent example with Pitch&Plakks, that continued raising up to €145,307, well over their modest objective of €10,000 (that they reached in just 2 hours!).

If we move to equity crowdfunding, the Certified B Corp Cheeky Panda, that makes tissue products with bamboo, had massive success, raising over 300% of their objectives in Seedrs.

Why does the power of 100 exist?

The answer is simple: because a campaign that reaches their objective generates trust. In a rewards-based campaign the backers see that their reward will become a reality and jump on the bandwagon. In equity-based campaigns, the investors understand that the company will have enough funds to execute their business plan and that extra money will only make the company success more likely.

The effect is similar to the 30-90-100 rule, that generates trust in the first few days of the campaign to attract backers from outside our immediate circles. In the case of the power of 100, we generate further credibility and trust.

This has a halo effect, making it easier to appear in blogs, traditional media or even the own crowdfunding platform newsletters.

Stretch goals

It’s important to communicate what’s going to happen once we go over our objective. In the crowdfunding lingo, this is known as stretch goals. If you’d like to go deeper, I’ve written a blog post on how to use the stretch goals to great effect.

Again, Pitch&Plakks did a great job on this front.

How can you go over 100%?

• With an objective that’s as low as possible (while guaranteeing the financial viability of the campaign).
• Being transparent with how you’re going to use the funds raised.
• Communicating what’s going to happen when you go over 100%.

Wrapping it up

Reaching the 100% of your objective is a great external validation for your crowdfunding campaign, generating even more trust and making your pitch even more attractive. Try to achieve it as soon as possible to benefit from this powerful leverage!

If you need help in building the strategy to do so, please don’t hesitate to contact me.