Crowdfunding project math

Having worked with tens or hundreds of crowdfunding projects, I decided to write a few articles for those who are just about to launch their project.

The first article I would like to publish is directly related to money in crowdfunding. "Crowdfunding mathematics" is not such a simple thing as it seems at first glance, but also not Einstein's "theory of relativity." This article will help you not to find yourself in a situation where, by collecting money, you yourself must turn out and sell the apartment, paying your debts.

So what does the financial component of crowdfunding consist of?

First of all, this is the “Required stated project amount” itself - the figure that you indicate on the crowdfunding platform and are trying to achieve:
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For example: friends, if we collect 100,000 rubles, my book “Crowdfunding in Russia” will publish!

To correctly calculate this figure, you need to take into account all the costs that exist.

Keep in mind that the projects are very different, which is why there are general recommendations for the crowdfunding plan.

The “project amount” includes:

• The budget for the implementation of the idea;
• Rewards;
• Crowdfunding platform commission;
• Commission payment systems;
• Taxes;
• Advertising, design;
• Pillow.

The first and main component of the project, which we include in the "project amount":

The budget for the implementation of ideas
This is the total amount of money that will allow you to realize the planned project, in the promised quality.

The budget is a loose concept, so I would like to initially caution against two errors:

1) Digit from head

This is when you decided to collect a book, and not knowing the real cost, said the amount of 100 thousand rubles. Having come to the publishing house, you learned that in fact all this costs 300 thousand rubles. As a result, panic and attempt to collect the amount. In this case, you will most likely have to either cancel the project or report your own funds. Which is not quite nice.

Therefore, it is necessary to calculate everything in advance and set the figure that will allow to realize these promises.

2) A very common mistake of domestic authors, this is an attempt to assemble the entire project in one go.
This may not be a small figure at all, for example, for the development of a high-quality mobile game the required amount often reaches 1.5 million rubles, the amount is quite large for Russia and so far, most projects do not reach it. Therefore, putting too much money, you risk being left with nothing: without money and without a project.

What to do? In English, this is called "stretch goals". From English lang deferred goals can be translated as rounds, steps of the project.
Divide the project into parts and collect at some minimum that will allow you to start, for example, 300 thousand rubles will often be enough to create a prototype game.

So the authors of the 28 Panfilov project did, they did not collect the whole film at once (60 million rubles), but 300 thousand rubles for the film teaser, as a result, they reassembled up to 3.2 million rubles from the first attack and were able to make significant progress .
Another example: American Tim Kerby offered his sponsors to directly influence the scale of the game “The overthrow of mutants - the battle for Russia”, which he will release this summer.

Rewards (~ 30%)
Further into the calculations you have to lay one of the most enticing reasons to sponsor your project: rewards!

What these rewards consist of:

• This is their cost (for how much you produce them);
• Shipping cost (mail, courier service, place in stock);
• Reserve (lay a small percentage in case you suddenly have to send a delivery to Brazil);
• Typically, the cost of remuneration is about 20-40% of the amount contributed by the sponsor.

It is important: that in the case when remunerations are the ultimate goal of the project, such as books, for example, they can be included in the sum of the edition’s budget; in other cases, for example, a shirt with a logo, they should be considered separately.

Important: Do not forget to put restrictions on the number of rewards.

With this sorted out, let's go further:

Commissions (~ 10%)
Crowdfunding platforms exist on the percentage that they take from the projects.
The standard scheme is 5-10% of the amount of a successful collection, this also includes the commission of payment systems.

Thus, in the total amount you still need to lay a 10% commission of the crowdfunding platform.

Since there are other conditions for crowdfunding platforms, be sure to clarify.

Taxes (~ 6-13- ...%)
Nobody likes to pay taxes, but they have to be reckoned with and included in the “Project Amount”.

If you are an individual, the Russian state will charge you 13% of the amount remaining after the crowdfunding platform commission.

If you are a legal entity, you already know your tax rate, it can be from 6% on the simplified taxation system up to ..., in general, everyone has different ways.

PR / SMM / Clearance
Although it is not necessary to spend money on advertising with serious preparation for promotion, it will still be useful to pay for several key publications that will obviously pay off in money or information equivalent.

In addition, you may need funds to pay for the designer, shooting the video and other costs associated with the design of the project.
If you need a very large amount, then perhaps you will have to spend a lot on promotion of the project.

Therefore, estimate the amount needed to promote the project that you would like to return and put it in the "amount of the project."

Pillow (1% -15%)
Very often there are unplanned expenses. So that they do not become not a pleasant event, it is recommended to mortgage 1% -15% of the “project amount”. This money will play the role of an airbag for your project, which will allow you to implement a project with reduced risks.

Initially, all right considering, you can fully work on your project, without worrying about the financial side.