Top Five Mistakes People Make On Crowdfunding Sites

Launching a crowdfunding campaign is an exciting and daunting experience rolled into one. While internet success stories like the Pebble smartwatch or Exploding Kittens game grace headlines, the reality is that most projects fail to meet their goals. Why do so many campaigns flounder despite passionate creators and great ideas? As it turns out, many missteps can be traced to a handful of all-too-common mistakes. Whether you're contemplating launching your own campaign or simply curious about the world of online fundraising, understanding—and avoiding—these errors can make all the difference.

Overlooking the Importance of Pre-Launch Preparation

Kickstarter, Indiegogo and other top crowdfunding platforms are brimming with hopeful pitches, but many fall at the first hurdle by diving in with little forethought. Too often, creators assume you can "build your campaign page and the backers will come." This myth is likely the leading cause of failed fundraising white-knuckle rides.

The Power of Pre-Launch

Successful campaigns are meticulously mapped long before the project's public crowning moment. Research from CrowdCrux indicates that over 35% of successfully funded projects reported working two or more months on preparation before launch. This includes everything from branding and planning your marketing funnel to securing testimonials or early press.

Example: Consider the game Dice Throne, which raised over $1 million in its first major campaign. The creators spent months building an email list, posting sneak peeks, collaborating with game reviewers, and testing the concept. When opportunity knocked, they had an eager audience ready to pledge on day one.

Tips for Effective Crowdfunding Preparation

• Build an Email List: Don't wait until the campaign goes live—collect emails of interested backers ahead of time using landing pages or social media lead magnets.
• Cultivate Buzz: Tease your project using sneak previews, early-access events, or behind-the-scenes content. Online communities (like Reddit or Facebook groups) aligned with your audience can be invaluable.
• Enlist Allies: Reach out to bloggers, influencers, and journalists relevant to your niche. Even a handful of organic write-ups can make a dramatic difference.

Underestimating the Value of Transparent Communication

Transparency is the backbone of trust in the crowdfunding space. Backers know they’re not buying from a big-box store; they're taking a leap of faith on a creator who may never have fulfilled a product before. Unfortunately, a major source of campaign backlash is poor or infrequent communication—especially once the money's been pledged.

Building Trust One Update at a Time

Crowdfunding platforms often require regular updates—yet even voluntary, unfiltered "behind the curtain" posts are more effective for building ongoing confidence. In the event of setbacks (a manufacturer delay, for instance), prompt honesty outpaces damage control far after the fact.

Case Study: The notorious Coolest Cooler, which raised over $13 million on Kickstarter, saw its reputation plummet due to months-long radio silence during production mishaps. A lack of updates spawned a flood of negative press and angry backers—many of whom never received their coolers at all.

Concrete Communication Strategies

• Set Expectations Early: Be clear about timelines, risks, and challenges upfront.
• Regular Updates: Even if there’s little to report, update at least twice a month—a good rule of thumb for maintaining goodwill.
• Two-way Channels: Promptly answer backer messages, and use feedback to steer development or rewards.

Poorly Designed Reward Tiers and Stretch Goals

A compelling crowdfunding campaign does more than just explain an idea; it creates irresistible value for backers. One persistent pitfall is structuring rewards (sometimes called ‘perk tiers’) in ways that confuse, alienate, or fail to excite.

Reward Design Matters

The most successful campaigns offer clear, memorable reward structures that make pledge decisions easy. Overly complex or cluttered tiers bog down decision-making, risking lost conversions. Conversely, uninspiring or overly basic rewards can fail to motivate support in the first place.

Example: The “Coolest Cooler” campaign initially succeeded by offering a uniquely featured cooler, but a drought of appealing or realistic add-on rewards for higher-tier backers led to logistical nightmares and inflated expectations—fueling eventual disappointment.

How to Design Reward Tiers That Work

• Keep It Simple: Ensure each tier offers a sensible, self-contained benefit. Too many tiers or small variations confuse potential supporters.
• Offer Legitimate Value: Perk pricing should reflect the value to the backer—consider bundled offers, limited editions, or unique experiences.
• Stretch Goals Wisely: Only promise extras or upgrades that you are 100% certain you can deliver. Overpromising is a near-certain path to logistical headaches (and bad PR).
• Clear Physical/Non-Physical Divide: If you’re offering both digital and physical rewards, make sure the difference (and cost discrepancy) is unmistakable.

Ignoring the Significance of Storytelling and Visuals

What sets apart a memorable campaign from an overlooked one? Beyond the technical specifics, it’s the power of the story and the visuals used to tell it. Too many first-time creators present their concept with dry bullet points or bland infographics—and miss the emotional resonance that moves people to action.

The Art of the Narrative

A campaign is more than an ask for money: it’s an engaging journey. Research by the University of Pennsylvania found that campaigns with a personal video raised on average 105% more than their non-video counterparts.

Example: The success of the Gravity Blanket Kickstarter stemmed from a compelling story linking their weighted blankets to scientifically backed stress relief, coupled with videos showcasing real people—sleeping better in beautiful, inviting settings.

Building Your Story

• Craft a Hero’s Journey: Explain why you started your project—what was missing in your life (and your backers’ lives) that your product solves?
• Show, Don’t Just Tell: Use photos or videos to demonstrate your work in action. Even simple smartphone footage is infinitely better than text walls.
• Testimonials: Early prototypes in user hands (or expert endorsements) provide credibility. Prioritize short clips over lengthy explanations.
• Infographics: Well-designed infographics can communicate complex features instantly—just don’t overload pages with tech specs. Aim for ‘teach, not overwhelm.’

Failing to Plan For Fulfillment and Unforeseen Costs

For many creators, achieving funding feels like crossing the finish line. In reality, it’s just the starting gun for a marathon of manufacture, packaging, and shipping. Failing to realistically assess and budget for production, taxes, or fulfillment is a cardinal sin on crowdfunding platforms.

The Pitfalls of Poor Budgeting

Across platforms, failed fulfillment is the most common complaint among backers—and the culprit in over half of high-profile post-funding disasters. Miscalculated shipping rates, manufacturing underbids, and missed cost overruns can turn a promising project into an unsustainable mess, sometimes bankrupting the project creators themselves.

Case in Point: The Zano Drone project, which raised $2.3 million on Kickstarter, collapsed under logistical impossibilities—crushing the dreams of more than 12,000 supporters and leaving no one with a working product.

Fulfillment Planning Essentials

• Get Real Bids: Secure manufacturer and freight quotes for production before you launch. Many creators have been undone by wishful, back-of-the-envelope calculations.
• Transparent Shipping Costs: Use real calculators (such as BackerKit’s tools) to price shipping for every major region. Absorb costs only if you can afford it.
• Allow for Buffer: Build a 10-20% contingency fund into your raise to absorb unexpected production or logistics shocks.
• Understand Tax and Fees: Both platform fees (approximately 5-8%) and national/international taxes (like VAT) can diminish your net usable budget. Consult a financial advisor if necessary.

Crowdfunding Success: It’s All In the Details

For every blockbuster Kickstarter, hundreds more dissolve into disappointment—and the difference is rarely a single bad break. Crowdfunding rewards patience, planning, and a willingness to do the unglamorous groundwork. Whether your goal is $5,000 or $5 million, the core principles remain the same: prepare carefully, communicate openly, honor your promises, tell a compelling story, and maintain rigorous focus on fulfillment. Success is never guaranteed, but these fundamentals dramatically increase your odds of turning support from strangers into sustainable achievement.