IfundIT Cookbook

Your guide to ifundIT at IBM

Allocating your Budget

Every ifundIT campaign needs a predetermined budget of funds to fuel the crowdfunding investment of projects and to support them as they enter development or implementation. You should consider not only how many funded projects you want at the end of the campaign, but also how many investors can participate, and how much each investor will receive.

As you make decisions about allocating a budget for your organization's campaign, you'll need to consider a few key elements.

How many projects are you expecting to build?

In our experience running campaigns, 10-15% of submitted projects are fully funded. Consider aiming for 5-20 funded projects for your first pilot campaign, to set a manageable scale for project submissions while your organization becomes familiar with ifundIT.

How much will each project cost to build and support?

The average project cost will vary depending on your expected outcomes, so you should consider the financial commitment you can make to each funded project carefully when allocating your budget. If you're only interested in proof of concept applications of each project, as was the case in the Spring into Bluemix campaign (LINK HERE), then this cost might be relatively low. On the other hand, if you are looking for complete, client-facing apps or services, you'll understandably need to make room for the increased production time in your budget.

How many investors do you want to participate?

ifundIT can accommodate campaigns ranging from only a handful of participants to hundreds of thousands of employees across an entire company. However, depending on the campaign mode you want to use, your budget might be a constraint. Consider how the scale of the campaign your organization wants, as well as its goals - are you looking to engage your entire organization, or just a small group of experts?

How much funding do you want to allocate to each investor?

Based on our experience, we generally recommend an allowance of $2000 per investor. As with everything else, this amount is more a best practice than a hard rule - we've found that $2000 is just enough for investors to feel like they have spending power and that their decisions have weight, without flooding the market with too much funding. Of course, if you're running a TopX campaign, you can adjust this amount however you like, since the funding projects receive from investors is not tied to how much they actually get.

For Fund2Goal campaigns, assume only 50% of the investor budget goes to funded projects

One of the most important differences between public and enterprise crowdfunding is the fact that investors are bringing the company's money into a project, not their own. Because all of the funding available to be invested has to be allocated by the CMO beforehand, you need to account for the fact that some investors won't spend all or any of their money. In order to ensure that there's enough funding to go around to get the desired number of successful projects, assume that only half of the total amount you give to investors will be put towards projects. As a result, we recommend doubling your total investment budget to determine how much you put out to the investor community.

Learn about choosing a campaign mode next.