Trends in the crowdfunding of

educational technology startups

By Pavlo D. Antonenko, Brenda R. Lee, and A.J. Kleinheksel, University of Florida

Abstract
This article presents an analysis of
active crowdfunding campaigns posted on
ten crowdfunding platforms in May 2013
to provide a glimpse of the recent trends in
the crowdfunding of educational technology
startups. We describe the characteristics of the
most successful crowdfunding campaigns in
educational technology and identify the most
popular crowdfunding platforms. This research
provides important implications for educational
technology entrepreneurs. Top performing
educational technology fund raisers tend to
a) request a modest but reasonable amount
for each phase of the project, b) focus on the
informal, out-of-school, rather than formal
contexts of learning, c) attract supporters with
a tiered system of rewards, and d) communicate
with supporters and inform the public of the
status of the project through periodic updates
and progress reports. Directions for future
research include conducting an in-depth
content analysis of archived data and exploring
the perspectives of successful educational
technology entrepreneurs using qualitative
interviews.
Keywords: crowdfunding, entrepreneurship,
project design

Introduction
Numerous students and alumni in
educational technology and related fields choose
to pursue careers as designers and developers of
educational technology products and services
(Ritzhaupt, Martin, & Daniels, 2010). For
example, in 1996 three instructional technology
graduate students from Utah State University
formed the 3GB group (3 Guys in the Basement)
to create an online learning management
system entitled Syllabase. The system quickly
gained popularity and was adopted by several
36

institutions including Brigham Young University,

Colorado State University, and the University of
Michigan. Syllabase research and development
was funded through a grant by the Utah System
of Higher Education; however, in todays climate
of decreased state and federal funding, many
educational technology entrepreneurs are
exploring other options for seed funds, including
venture capital and crowdfunding (Lawton &
Marom, 2012).
Crowdfunding was a direct societal
response to the financial crisis of 2007-2008
and to the consequences of tighter business
loan regulations and diminished funding from
both federal and state agencies and private
and corporate foundations. Crowdfunding,
or collective, community-driven financing
of projects, has attracted creative individuals
from around the world since 2009 when the
first crowdfunding platform, Kickstarter, was
launched. Crowdfunding involves a person or an
organization that proposes the ideas or projects
to be funded, and the crowd of people who
provide relatively small monetary donations
to support the proposals. Fund-raisers and
supporters interact using a crowdfunding
platform like Kickstarter or StartSomeGood,
which brings together the project initiator and
the supporters. Given the public interest and
the potential benefits to the national economy,
crowdfunding has recently garnered attention
from policymakers as evidenced by the
Jumpstart Our Business Startups Act (JOBS Act)
recently signed into U.S. law (Chasan, 2012).
Of the 50 highest funded projects through 2012
on Kickstarter, 45 have turned into ongoing
entrepreneurial firms (Mollick, 2012).
Although the basic idea of pooling the donations of many individuals (or crowdsourcing) to
finance a project is not new, as seen with the practice of humanitarian organizations (Ordanini,
Miceli, & Parasuraman, 2011), the idea was revo-

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Volume 58, Number 6

lutionized with the advent of 21st century information and communication technologies. Social
media such as blogs and social networking applications have allowed people to post their project
ideas on the Web, spread the word via their network, and collect donations immediately through
services like PayPal. The popular crowdsourced
online encyclopedia Wikipedia has covered its
costs with the help of private donors since 2003.
Yet, the advent of dedicated, social media based
crowdfunding platforms, designed specifically to
support project campaigns seeking donors, has
resulted in a crowdfunding boom that is transforming the way artists, entrepreneurs, software
developers, educators, and filmmakers secure
seed funding for their creative projects.
Despite subtle differences, most crowdfunding sites provide the same basic functionality.
First, the fund-raiser sets up a webpage for the
campaign and posts a description of the concept
asking for contributions from the community
to support the project or a phase of the project.
This description typically consists of a video
and supporting text and images illustrating the
concept. The entrepreneur is usually given a certain amount of time to reach the campaign goal
and, if this goal is not reached, the supporters or
backers are not charged.
Although crowdfunding has emerged as
a viable and popular model of funding new
ventures, little peer-reviewed research has been
published on the topic. Schweinbacher and
Larralde (2010) reported what was probably
the first empirical study of crowdfunding using
the case study method. A series of more recent
studies have focused on the role of supporters
in crowdfunding. Belleflamme and colleagues
(2012) offered insights on constructing a
theoretical model of when donors choose to
crowdfund. Kuppuswamy and Bayus (2013)
analyzed the patterns of donor support on
Kickstarter varies depending on project success
and timing. Agrawal, Catalini and Goldfarb
(2010) examined crowdfunding in the context
of musician campaigns to understand the
geographic distribution of crowdfunding donors.
Burtch, Ghose and Wattal (2011) examined how
timing and exposure affected 100 pitches for
new journalism stories. Mollick (2012) analyzed
a dataset of over 48,500 projects with combined
funding over $237M and provided insights on
the underlying dynamics of success and failure
among crowdfunded ventures. This study
suggests that crowdfunding projects mostly
succeed by narrow margins, personal networks
and underlying project quality are associated
with the success of crowdfunding efforts, and
that geography is related to both the type of
Volume 58, Number 6

projects proposed and the success of fundraising

(such as seeking and obtaining support for a
country music project in Nashville, Tennessee).
The purpose of the study reported here was
to explore the trends in the crowdfunding of educational technology ventures. Specifically, we
aimed to determine which crowdfunding platforms are popular among educational technology entrepreneurs and what characteristics are
shared among successfully crowdfunded educational technology startups.

Definitions
Our definition of educational technology
startups is informed by the Association for
Educational Communication and Technologys
(AECT) definition of educational technology as
a field:
Educational technology is the
study and ethical practice of facilitating
learning and improving performance
by creating, using, and managing
appropriate technological processes and
resources. (Januszewski & Molenda,
2007, p. 1)
A startup is defined as a venture or a new
business organization in the earliest stages of its
development designed to search for a scalable
business model (Fonseca, Lopez-Garcia, &
Pissarides, 2001). The term startup became
popular internationally during the dot-com
bubble when a great number of dot-com
startup companies were founded (Hellman
& Puri, 2002). Whether the idea behind a
startup involves the invention of a product, the
manufacture of goods or the selling of things,
entrepreneurs concern themselves with the
issue of business capitalization and profitability
(Mann, OSullivan, Robbins, & Roberts, 2003).
Based on the above definitions, an
educational technology startup was defined in
this study as an emerging business organization
designed to profit from the production and/or
distribution of products or services that facilitate
learning and improve performance by creating,
using, and managing appropriate technological
processes and resources. Examples of such
products may include educational videos,
learning management systems, multimedia
learning materials, digital games, and educational
e-books (Molenda & Boling, 2007). Examples of
educational technology services that companies
may offer include technical support for
educational organizations, consulting, planning
and implementation of educational technology
related events like robotics competitions
(Donaldson, Smaldino, & Pearson, 2007). These

TechTrends November/December 2014

37

38

technology-supported products and services

may center around formal or informal learning
contexts, target various age groups, and focus on
any education related goal such as construction
of content knowledge in the given domain,
improvement of cognitive and metacognitive
skills, optimization of collaborative learning,
management of education and so forth.

Data analysis consisted of sorting the

database based on such variables as Percent
Funded, Number of Backers, Crowdfunding
Platform, Category, and Target Age Group
and providing an in-depth examination
and comparison of the characteristics of the
most successful crowdfunding campaigns in
educational technology.

Method

Results

This descriptive study was designed to

examine the following research questions:
1) What crowdfunding platforms are most
popular among educational technology
entrepreneurs?
2) What are the characteristics of successfully
crowdfunded
educational
technology
startups?
The methodology for addressing these
research questions involved content analysis
(Palmquist, Carley, & Dale, 1997) and
basic frequency analysis of the features of
fundraising campaigns that were active from
May 1 to May 15, 2013, on the following 10
crowdfunding platforms: Kickstarter, Indiegogo,
Rockethub, Microryza, Newjelly, Peerbackers,
Startup Addict, Quirky, iAMscientist, and
StartSomeGood.
The content analysis began with constructing a database that consisted of the following
sortable code categories or variables: a) Crowdfunding Platform, b) Startup Title, c) Category, d) Days Active, e) Amount Requested, f)
Amount Generated as of May 15, 2013, g) Percent Funded, h) Number of Backers, i) Learning
Context, j) Target Age Group, k) Project Website, l) Startup Location, and m) Other Relevant
Information.
Based on the AECT discussion of educational technology products (Molenda & Boling, 2007)
and processes (Branch & Deissler, 2007; Donaldson, Smaldino, & Pearson, 2007), the educational
technology startups were coded as a) Instructional Film, b) Documentary Film, c) Feature Film, d)
Serious Game, e) Entertainment Game, f) Simulation, g) Mobile Application, h) Audio, i) Social
Media, j) Photography, k) E-Learning Platform,
l) E-book, m) Tutorial, n) Creative Expression,
o) Hardware, p) Infrastructure Improvement,
and q) Training/Consulting. Three educational
technology researchers discussed the attributes
of educational technology startups based on the
shared definition provided above and analyzed
the campaigns posted on the 10 crowdfunding
websites populating the database. One database
entry corresponded to one educational technology startup crowdfunding campaign.

Our analysis produced a total of 207

educational technology related crowdfunding
campaigns for May 1 through May 15 of 2013.
Most of the educational technology startup
campaigns used RocketHub (n=90), followed by
Kickstarter (n=76), and Indiegogo (n=37). Only
three campaigns were posted on Mycroryza, and
only one project chose to use PeerBackers as its
crowdfunding platform. This was a surprising
finding in that we expected the Kickstarter
platform to be the absolute leader because of
its being the first and largest crowdfunding
site. Additionally, it was surprising to find that
platforms like IAmScientist, which specializes in
helping young researchers, and StartSomeGood,
which provides support for non-profit
organizations and social entrepreneurs, were not
represented in our sample.
Table 1 provides an overview of the top 10
successfully crowdfunded projects based on
the percent funded (i.e., amount requested vs.
amount generated). These projects include an
e-book on learning the Python programming
language, an interactive multimedia online
course on the Wordpress content management
system, a serious game that uses cards and
mobile applications to teach pronunciation and
spelling, a gamma particle detector, a video
tutorial on game programming, a hardware
platform for learning basic engineering and
programming concepts, an interactive 3D game
teaching Linux and the basics of protecting
systems from hackers, an e-book on PHP for
absolute beginners, an instructional DVD on
the effective use of flash in photography, and
a 10-week summer program on teaching web
design to teens from Chicagos Englewood
neighborhood.
Six of the top 10 performing crowdfunding
campaigns focused on creating learning materials
(e-books, an entertainment game) or training programs (an online course, a video tutorial, a summer
camp) that focused on the teaching and learning of
programming languages or environments for programming (Linux in the Hackventure game). Only
one project focused on each of the following: science learning (mini radiation detector), language

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Table 1. Top 10 Successfully Crowdfunded Educational Technology Projects (May 2013)

Title

Category

Requested

Generated

Backers

1) Practical Python

e-book

$800

$21,150

2,007

2) Learn Wordpress

tutorial

$900

$20,508

678

3) Magicians

serious game

$3,000

$34,056

1,025

4) APOC: Mini Radiation Detector

hardware

$5,000

$56,590

701

5) Learn Game Programming

tutorial

$700

$7,005

702

6) Learn Along: PHP

e-book

$600

$2,500

180

7) Teagueduino

hardware

$22,000

$76,697

390

8) Scope Creep Hackventure: Learn Linux

entertainment game

$2,000

$7,095

253

9) The Lighting Asylum

instructional film

$1,650

$4,852

112

10) Englewood Codes

training

$5,500

$10,235

178

learning (Magicians), and pre-engineering learning materials (Teagueduino).

Most of these projects were either specifically
targeted at informal learning or could be used
in both formal and informal learning settings
(e.g., e-books). This reflects our observations that
most education-oriented projects submitted to
the crowdfunding platforms that we analyzed
were designed to support learning in an informal,
out-of-school context. In fact, a popular project
that generated $40,000 from 1,588 backers was
an e-book entitled Dont Go Back to School: A
Handbook for Learning Anything. This e-book
was presented as a how-to guide for independent
learning, with concrete strategies plus stories of
people who learn on their own and how they do it.
Nine of the top 10 performing projects
requested less than $6,000, although an eighth of
them generated more than $7,000. In fact, five of
the projects raised more than $20,000. The most
successfully crowdfunded projects in our study
were relatively modest in terms of the financial
support they requested from the public. This
finding supports the results of a prior study that
analyzed a dataset of over 48,500 projects with
combined funding over $237M and revealed
that smaller goals were more successful at
being funded than larger ones (Mollick, 2012).
This result implies that educational technology
entrepreneurs should consider designing a series
of campaigns for their larger projects, chunking
these projects into smaller development and
production phases.
Volume 58, Number 6

As for the target age group, none of the top

performing crowdfunding campaigns focused
on an educational technology product or service
for learners younger than teens and adolescents
(with the exception of Magicians, perhaps). All
of the projects received financing from more
than 100 patrons, with five of them attracting
more than 500 backers. This finding contradicts
prior research on the crowdfunding of academic
research (Ingeno, 2013), which described the
trend of projects receiving few larger donations
rather than many small donations.
In terms of the geographic distribution, only
one top performing crowdfunding campaign
originated in a country other than the United
States. The Magicians tabletop card game with
a suite of mobile applications teaching spelling
and pronunciation originated in Seoul, South
Korea. Half of the projects were started by
individuals or teams in large cities (Washington,
DC; Chicago; Seoul; and two from Seattle),
three projects listed their main location in rural
areas in the U.S. Northeast and Midwest, and
two came from suburban areas in California.
As Figure 1 demonstrates, most of the projects
we reviewed originated in the more densely
populated areas in the U.S. Northeast, Pacific
Northwest (Seattle and Portland), California
(Los Angeles, San Francisco, and San Diego), as
well as the Chicago and Minneapolis - St. Paul
metropolitan areas. This corroborates the results
of a earlier study of crowdfunding geography
(Agrawal, Catalini, & Goldfarb, 2010) and

TechTrends November/December 2014

39

Figure 1. The geographic distribution of US-based educational technology crowdfunding campaigns

a large-scale study demonstrating that most

crowdfunding campaigns originate in large
metropolitan areas and that a large number of
creative individuals in the city where the project
is based is associated with greater success
(Mollick, 2012). Fifty-eight of the reviewed
projects listed an international location as their
main office; most of them originated in Europe
(n=31, mostly the United Kingdom), North
America (n=14, mostly Canada), and Asia (n=6,
mostly India).
All of the top 10 crowdfunding performers
used a tiered system of rewards for their backers.
For example, the APOC Mini Radiation Detector
project posted backers name on its website
for a $5 pledge, sent a T-shirt for a $25 pledge,
provided patrons with an APOC building kit for
a $50 pledge, sent backers a basic version of the
detector for a $80 pledge, a full version of the
detector for a $100 pledge, an advanced version
of the detector for a $150 pledge, and a super
combo of a T-shirt, APOC advanced, and a
radioactive source disk to those who pledged
$200 or more. Similar to our findings, Mollicks
(2012) study on the determinants of successes
and failures of crowdfunding revealed that a
tiered system of reward categories increases the
chances of attracting funding. Rewards were
also shown to be one of the most important
motivations for participating in crowdfunding
communities (de Witt 2012; Gerber, Hui, &
Kuo 2012; Steinberg, 2012) and reward-based
online crowdfunding platforms are described as
the fastest growing form of public fund raising
(Massolution, 2012).
Finally, all high-performing projects also
posted status updates and progress reports
40

to inform their supporters of the recent

developments. These status updates were
often presented as videos demonstrating the
new functionality, conference presentations,
screenshots, and photos of the system
components. The updates also included such
information as the number of units produced
and shipped and directions for future work,
including specific milestones, and deadlines.
This supports results of a prior study of donor
behavior in online crowdfunding communities,
which provided a quantitative examination
of two years of publicly available data on
successfully and unsuccessfully funded projects
from Kickstarter and demonstrated a positive
influence of project updates, particularly in
the final stages of funding (Kuppuswamy &
Bayus, 2013). According to this study, this was
particularly the case for projects that successfully
achieve their goals as they are more likely to
have an update in the last weeks of funding and
generate more excitement from recent backers
than projects that fall short.
Communication between the fund seekers
and supporters was also performed via the
crowdfunding platforms commenting feature.
Successful performers tended to respond to
questions and comments promptly and posted
questions and responses in the Frequently
Asked Questions section of their project page.

Summary and Implications

This study provides a snapshot of the recent
trends in the crowdfunding of educational
technology startup projects and corroborates
the results of prior research on the dynamics of

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Volume 58, Number 6

crowdfunding success and failure (Kuppuswamy

& Bayus, 2013; Mollick, 2012). Our research
provides several implications for the design
of crowdfunding campaigns for educational
technology entrepreneurs. Top performing
educational technology fund raisers tend to a)
request a modest but reasonable amount for each
phase of the project, b) focus on the informal,
out-of-school, rather than formal contexts of
learning, c) attract supporters with a tiered
system of rewards, and d) communicate with
supporters and inform the public of the status of
the project through periodic updates and progress
reports. Implications for future research include
in-depth content analysis of archived data on
the crowdfunding of educational technology
startups and the use of qualitative interviews
to explore the perspectives of successful
educational technology entrepreneurs.
Correspondence regarding this article
should be directed to Pavlo D. Antonenko,
School of Teaching and Learning, University of
Florida, PO Box 117048, Gainesville, FL 32606
Email: p.antonenko@coe.ufl.edu, Phone: +1
352-273-4176

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