Here’s Why the Holidays are a Great Time to Receive Benefits from Crowdfunding
Now that the merriest and biggest holiday of the entire year is finally upon us, and we have just entered 2019! Some have prepared New Year resolutions about remaining fit and more charitable and also reading more while some people are still trying to sober up. Some will try to multitask and achieve their envisioned resolutions and clean up their act, simultaneously. Those into crowdfunding will be slowly rising up from deep slumber even if spring season isn’t here yet?
You may wonder why people would choose to crowdfund over the Christmas and New Years period when they are enjoying themselves and their lives are full of mince pies, turkey, late nights, chocolates and treats. However, reviewing crowdfunding data, December was among the most funded months in terms of crowdfunding for the year of 2017 with $156 million pledged for about 199 campaigns.
How is this Possible?
So, what does this spell for the unlisted private corporations which try to raise funds via crowdfunding asinvestors are likely to experience the holiday effect? With the high-risk nature of early stage startup investing, the holiday effect could even encourage investors to express a larger risk appetite than is normally done. This is good news for companies campaigning during the festive season. Some great insights are given below:
- Investors are less busy
Investors are likely to have more spare time during December. Before Internet, the whole lot of investors would have taken the time off during summer and Christmas, but that does not happen anymore.
- Pre-Christmas bonuses prevail
The yearly bonuses are paid at different periods in the year, with Christmas bonuses are most common of them all. Bankers, for instance, get their bonuses in January, so that is typically a more viable month for the traditional investors. However, crowdfunding allures the retail investors – the common people – who are likely to get bonuses before the year ends.
- Pressure exercised to close funding series
Entrepreneurs typically close the funding rounds before the year-end and hustle harder to ensure not campaigning during the holiday season. Given the excess liquidity over the Christmas season, reap the benefits from this to plan funding activity in the 7 days from Christmas to New Year, a stretch where investors will be keenly looking, but there are few entrepreneurs active online.
- Allowances could be invested
Most people use the holiday break to file tax returns before the end-January deadline and investors calculate how much ‘Enterprise Investment Scheme’ or EIS relief allowance they can invest. Most investors invest almost proportional to the income tax relief that they enjoy.
- It’s all very cerebral
Psychology Today published an article which discussed how stock markets dance to the tune of the “holiday effect”, enabling them to become more positive with regards the performance of the market only because of their relaxed and exuberant moods. A study concluded that financiers are in the mood to buy due to the ongoing “holiday euphoria” and “high spirits”.
Family buy in is essential!
It may be unexpected but Christmas isn’t bad for your crowdfunding campaign. As managing a campaign is very all-consuming in nature, your family’s buy in is essential before holidays begin as you will be distracted from essential family time, but there are benefits in the long-run. However it is also a time for us to be with our families and loved ones. A time to be away from the internet, away from work and worries, and from other people’s affairs. It’s a time for rest and festivities. Do your best to avoid both major and lesser holidays around the launch date and the most active first days/weeks.
A Cautionary Note
Holidays should also be avoided during the period of the first decline of your campaign, when the initial interest of funders begins to wane. Most experts would say that the most viable time to start a crowdfunding campaign is when the platforms on which these campaigns are launched, bill the client’s card or payment mode. People often disburse their mortgages or rents at the beginning or end of every month, so the mid-month period is pragmatically the better choice. Crowdfunding in the holiday season is always a good option.
So while the world is busy celebrating, why not work extra hard and reap the benefits from your working holiday while launching your crowdfunding campaign.
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