Finding the sweet spot: Machine learning reveals factors for successful crowdfunding
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Modern crowdfunding has grown from relatively modest beginnings in the late 1990s to a multi-billion-dollar financing market for all kinds of early-stage innovations. The platform Kickstarter alone went from $276 million pledged in 2012 to $7.8 billion in 2024. There are even professional project designers to help craft that winning proposal.
Enter machine learning to assist. Researchers from the University of Toronto's Rotman School of Management put four different types of this artificial intelligence application to the test, including Deep Learning. Machine learning proved not only superior to conventional statistical methods for predicting whether a crowdfunding campaign would reach its goal, it also identified which elements helped most, and how.
"Running a crowdfunding campaign is costly and could fail," says Ramy Elitzur, a professor of accounting at the Rotman School. "Our analysis shows project creators ways to improve their chances of success, or, alternatively, whether they should pursue a different project funding strategy."
