Crowdfunding for Emerging Brands Reflects Consumer Interests in Community Investment
Even with the financial hardships and disruptions caused by COVID-19, consumers have been voting with their dollars to help support emerging brands (including those in food and beverage) through crowdfunding sites like Indiegogo, Kickstarter and Wefunder, all of which rely on funding from individuals and have reported increased traffic.
According to FoodNavigator-USA.com, “During the second half of March after the pandemic was declared, the crowdfunding platform Indiegogo reported traffic increased nearly 14% compared to last year and daily funds raised were up 24% year over year. Kickstarter also reported in last month that the
funding success rate for projects is up five percentage points over last year, and Wefunder saw investor volume increase 35% from February through April.”
The article further describes how such crowdfunding platforms offer a unique opportunity for small startups to gain early visibility and loyalty (through investment) by talking about their product narrative holistically from innovation to retail to growth.
Rising interest in crowdfunding stands in contrast to many consumers’ decreasing financial security during the pandemic and yet illustrates growing motivation among individuals to help build strong and resilient communities. The Hartman Group’s Value in the Time of COVID-19 white paper highlights how the pandemic has fostered a stronger sense of community mindedness — particularly around supporting small businesses so as to bolster the health and economic well-being of both individuals and communities. As noted in the white paper, “COVID-19 has forced communities to grapple with how individual behavior impacts collective health and social wellness, and it has elevated the mandate that companies demonstrate how their products, practices and systems positively impact the community and support the greater good.”
Crowdfunding platforms embody this mindset by democratizing the typically venture capital-driven investment process, giving consumers agency to determine which companies receive funding and ultimately contributing to a landscape of products that better reflects consumers’ needs and values. Such investments behavior demonstrates that corporate and community funding don’t have to be at odds with each other — crowdfunding can act as a bellwether for themes within products and types of companies that resonate with consumers.
White Paper: Value in the Time of COVID-19
Webinar Recording: Value in the Time of COVID-19 Report Highlights