The 30-90-100 rule of crowdfunding is the first and perhaps most important of the 20 golden rules of crowdfunding.
This rule states that the campaigns that reach 30% of their funding objective in their first week have a 90% chance to reach 100% of their objective. This is a pattern that repeats across all rewards-based platforms. For equity crowdfunding, we’ve been pushing our clients to raise at least 50% from the personal circles during the private phase to ensure a successful campaign.
The reason is that this 30% will come, in a great measure, from family and friends, that should always be the first circles you should impact with your communications. Once you’ve cleared the 30% hurdle, you’ll start to have enough momentum to reach the third and fourth circles (fools and fans) where the growth can be exponential.
Taking this 4F’s approach, the fools are people not related to us but that are willing to take a risk and be part of your project. The fans are part of the community we’ll create around our idea. This community is crucial as we discussed in the article 3 keys for a successful campaign.
Behind this rule we have a basic behavioural pattern that supports the basis for success in crowdfunding: generating credibility. If enough people back you in the first week to get you to 30%, you’ll generate enough trust and credibility for the rest of potential backers.
How to meet the 30-90-100 rule?
- Calculate the number of backers needed to reach the 30% of the objective.
- Convince your close contacts to back you during the first 7 days of the campaign (ideally on the first day!).
- Work on a collaborative approach, not only with their monetary contributions but also spreading the word.
Wrapping it up
Generating momentum is key for the success of any crowdfunding campaign. We’ve seen that reaching at least 30% in the first week of your rewards-based campaign will guarantee your success in 90% of the instances. For equity crowdfunding, you will need a slightly bigger push, but the approach is very similar.
If you need help in building the strategy to do so, please don’t hesitate to contact me.