How To Predict Crowdfunding Success Through Data Analysis

Predicting crowdfunding success is a rapidly evolving field, and analysis of big data from various sources is becoming increasingly powerful for this purpose. An academic study concluded that the success of crowdfunding projects can be predicted by measuring and analyzing big data of social media activity, human capital of funders and online project presentation. This is likely to matter a lot more when raising funds for, or investing in, a privately owned business through equity crowdfunding than pre-ordering items through reward-based crowdfunding, though the techniques in this article can broadly apply to both forms. Here’s a checklist-style deeper dive into these three categories, with a shortlist of tools available to help accelerate any analysis.

1. Social media activity

Engagement metrics

Successful crowdfunding projects are powered by effective social media activity. Tracking likes, shares, comments, and mentions across platforms can reveal the level of public interest and potential virality of a crowdfunding project. Platforms like X/Twitter and Facebook offer valuable insights through hashtags and sentiment analysis.

Community interaction

Monitoring how the project team interacts with potential backers (replies, answers, discussions) can indicate their commitment and ability to build relationships.

Influencer outreach

Analyzing endorsements and mentions by influential figures in relevant communities can gauge potential reach and trust among target audiences.

Here are some AI tools suitable for analyzing social media activity.

Brand24 monitors mentions and sentiment across social media platforms, providing insights into audience engagement and brand perception.

Buzzsumo analyzes content performance and identifies influencers in your niche, aiding in targeted outreach and campaign promotion.

Meltwater offers competitor and industry analysis alongside social media monitoring, allowing you to benchmark your campaign and adapt strategies.

SparkToro analyzes X/Twitter data to uncover audience interests, demographics, and psychographics, helping both project leaders and potential backers recognise the types of people a crowdfunding project ought to be targeting.

2. Human capital of funders

An examination of the types of people, and even specific individuals who are prominent backers, is a valuable of component predicting success through crowdfunding data analysis.

Network analysis

Crowdfunding platforms only get paid by the projects that succeed. As an indicator of likely success, equity crowdfunding platforms require projects to have already secured a significant level of backing, generally at least 30% of the crowdfunding target. This money can come from VCs, family funds, or angel investors. If the information on lead investors is not available from the crowdfunding platform then make a point of asking the project leader(s). Mapping the connections between cornerstone backers can identify clusters of potential supporters and predict network effects (spreading enthusiasm through existing connections)

Link is here https://crowdsourcingweek.com/blog/predict-crowdfunding-success/