Back in early November 2012, a small gaming studio named DreamQuest Games launched a crowdfunding campaign. If they reached their $50,000 goal, they would have worked to finish a game called Alpha Colony. A month later, DreamQuest announced to the public that their funding came short. $28 short to be exact. As a result, the game wasn’t funded and the project was never heard from again. But if they made their funding goal $40,000, they would have at least received the $40,000 funds and the $9,972 excess (although deductions must apply). But that doesn’t necessary mean that you should set a lower funding goal than your real goal. It actually does more harm than good.
With the exception of highly viral campaigns like the wildly successful Potato Salad campaign, a low funding goal makes your project look cheap and may even discourage them from contributing because they may end up with a low quality product.
Even if you think your funding goal is reasonable and well thought out, you could face a few unplanned expenses here and there. Taxes are your worst enemy so raise your funding goal by at least 10% to cover that part. You also don’t want to find yourself spending most of your raised money on shipping costs for rewards.
Projects that have raised less money than expected often have no choice but to make compromises like sacrificing in quality, cancel the entire project or launch another crowdfunding campaign which is sure to raise some eyebrows.
As much as it is nice to prioritize your backers first and keeping things affordable, you also have to profit and getting that profitable feeling is necessary to maintain that drive to make newer projects or improve existing ones. You are here for the long-term and low profits will make you think that your efforts aren’t worthwhile.
Of course setting a funding goal too high isn’t good either. Finding that sweet spot is quite a challenge. In a future article, I will give some tips on setting a good funding goal.