How to Fund a Project:

A Crowdfunding Platform Data Model

Emil Drkušić, Database designer and developer, financial analyst

by
Emil Drkušić
Database designer and developer, financial analyst

Posted: April 27, 2017

Kickstarter crowdfunding Platform Data Model

Crowdfunding has become a popular way to raise money for businesses, charities, and all kinds of projects. In this article, we’ll look at a database for a crowdfunding platform.

Most of us have heard about crowdfunding. It is a relatively new fundraising concept that helps people realize their ideas. Project costs are divided between a large number of individuals, and they usually choose to back a project because it appeals to their personal interests. Donations can be small or large; it’s called crowdfunding because a crowd of everyday people are involved.

In today’s article, we’ll focus on building a data model to store everything we need when running a crowdfunding campaign. We’ll also describe all relevant crowdfunding terms and open up the discussion to your ideas at the end.

How Crowdfunding Usually Works

The general idea of crowdfunding is pretty simple, but there is more we should know before we move to the technical part of this article.

  1. What is a crowdfunding?

    Crowdfunding is a process where an individual or organization presents a project to the public (i.e. the crowd) with the hope of getting funds to launch that project. They also outline benefits for potential contributors, if any. For example, if someone contributed a certain amount, they might receive a small thank-you gift.

    For each project, we’ll define the minimum amount of funds needed to complete it and the date when the campaign ends. If the campaign was successful, the project can start.

  2. What motivates project initiators?

    Most of us have a personal dream we would like to achieve. Many of these personal dreams are also business-related, which means our efforts could be interesting to others. Examples of crowdfunding projects include starting environmental or social outreach programs; building a special computer application; writing a book; performing extended research, or creating a new piece of hardware.

    Often, people lack the time or money to realize their idea. This is where crowdfunding comes in. Some feel that presenting your ideas publically means you risk someone stealing them, but many people are okay with taking that risk for the chance to accomplish their goal.

  3. What motivates project investors and supporters?

    Anyone who donates money to a project can be called an investor, supporter, backer, contributor, or a donor. I’ll call them investors because they are investing their money in your idea.

    In most cases, investors will get benefits from their investment. For a book, that benefit could be receiving a free copy before it is publically available. For other products and services, perhaps there is a price discount. Sometimes investors personally don’t get any direct benefit other than a description of the finished project’s results (e.g. helping save animals affected by an oil spill). This is usually the case for environmental or social improvements or research projects.

    So investors either get a material reward for their investment or they feel good about themselves for making a contribution.

  4. Why has crowdfunding become so popular?

    The past two decades has seen money transfers become easier than ever, thanks to the Internet and the development of online financial services. This resulted in the creation of new technologies and through them online crowdfunding platforms. There are hundreds of crowdfunding sites available, and they follow various concepts. Some stick with the classic concept of crowdfunding, where investors get something in return for their investment. Others are focused on loans, microfunding, or outright donations.

  5. What are the most popular crowdfunding platforms today?

    The most popular classic crowdfunding platforms are:Kickstarter, IndieGoGo, Crowdcube, and Seedrs. Other platforms cater to specific projects: Experiment.com crowdfunds science projects, while Patreon funds creative work like writing books or music. GlobalGiving relates to charity projects and donations, Kiva and Zidisha focuses on microloans and person-to-person loans.

  6. The most important crowdfunding campaign tip… Ever!

    OK, not ever ☺. But close.

    In crowdfunding campaigns, the most important thing is the IDEA. Nobody supports a cause if they don’t actually believe in the person or organization behind it. To achieve that, you should first believe that you can do this. Believe that your goal is reachable and within the limitations of you and your team.

    Remember to present your idea with “killer” materials that are short, effective, relevant, and exciting. Stay active during the campaign, adding new materials, providing updates, answering questions, etc.

The Data Model




The data model consists of four main subject areas:

  • User accounts & countries
  • Projects
  • Project teams
  • Investors

We’ll describe each subject area in the same order they are listed.

Section 1: User Accounts and Countries

Section 1: User Accounts and Countries

The User accounts & countries section consists of only two tables, the country table and the user_account table. User account information appears in two other subject areas, so I’m describing this subject area first.

The country table is a dictionary containing a list of UNIQUE country_name values. We’ll use these values only to relate users with countries.

The user_account table stores details about each user that creates an account on our platform. In this model, only investors must have accounts; project participants could have an account but it is not mandatory. For each user account, we’ll store the following values:

  • first_name and last_name – The first and the last name of the user.
  • user_name – A UNIQUE username value.
  • password – A password hash set by the user.
  • email – The email account used to sign in to our application.
  • projects_supported – The number of projects that user has supported so far. This data could also be calculated from other tables in the model, but I find it appropriate to store a redundant value here to increase performance. It’s important that we update this attribute every time the user invests in some new project.
  • total_amount – The total amount the user has invested in all projects so far.
  • country_id – References the country where the user lives.

Section 2: Projects

Section 2: Projects

The Projects subject area contains the most important tables in our model. Without projects, there is nothing for investors to be interested in.

A list of every project ever posted on our platform is stored in the project table. The attributes in this table are:

  • project_name – The project’s name, as selected by the project initiator. This could be UNIQUE but I’ve chosen not to set it so. There is always the chance we will have two projects with the same name.
  • organization_id –References the organization table and denotes the organization that is behind this project.
  • user_account_id – References the account of the user who created this project.
  • project_description – A detailed description of the project including a summary of the idea, goals, the project’s plan and roadmap, etc.
  • project_location – The physical location where either 1) the project will take place, or 2) the location of the organization, e.g. New York, USA.
  • start_date – The start date of the project or campaign.
  • end_date – The expected end date for the project or campaign. This attribute will hold only the current value. We might change end date of the project (e.g. in case we want to extend the campaign’s duration). A history of all end dates for all projects is stored in the parameters table.
  • goal – The current financial goal of the project. This is the minimum amount of money we need to run the project successfully. Like end_date, this could change; we’ll store its history in the parameters table.
  • pledged – The amount of funds currently pledged to the project.
  • investors – The current number of investors for this project.
  • project_status_id – References the project_status dictionary and holds the current status for this project.

The value that is usually displayed next to the project is the funded percentage. We won’t store this value in our database, but we will calculate it on the screen using the formula “pledged” / “goal”.

Besides a basic description of the project, we’ll need to store related materials like videos, written content, charts, infographics etc. We’ll do this using two tables in our model: the material_type table and the material table.

The material_type dictionary contains only UNIQUE type_name values. These names will distinguish various types of materials and select how best to display them on our portal.

All materials related with all projects are stored in the material table. For each material, we’ll store the ID of the related project, the material’s type and description (if any), and a link to the location where that material is stored.

In the project table, we’ll only store the ID of the current status of the project.

We have already mentioned project statuses. A list of all possible statuses is stored in the project_status dictionary. This table contains a list of UNIQUE status_name values. We can expect statuses like “draft”, “campaign created” (i.e. the draft has been finalized but the campaign has not started yet), “campaign started” (assigned automatically when we reach the project.start_date), “campaign ended – successfully”, “campaign ended – unsuccessfully”, “campaign ended – cancelled” and “project started”. Additional statuses could be added in order to describe the project’s progress after the campaign is completed. For example, a business may want to track its delivery of services or goods to all investors. If the project is unsuccessful, we should be able to ensure donations are refunded, etc.

All statuses that were ever assigned to any project are stored in the project_status_history table. Each time when we insert or change the value of the project.project_status_id attribute, we’ll insert a record into this table. It stores the ID of the related project, the ID of the related status, and the timestamp when that status was assigned.

Every crowdfunding campaign has many parameters that might change along the way. We’ll start with just two of them, the end_date of the campaign and its goal. These values could change according to the current campaign status – if we have reached our planned goal, we could set a new goal or extend the campaign’s duration. When we make these changes, we should be able to track the history of all such changes. That is what the parameters table is for. When we add or change the end_date or the goal in the project table, we’ll also insert a new row into the parameters table. This will store the ID of the related project, the previous end_date and goal values, and the timestamp the change happened.

The remaining two tables in this subject area, comment and update, relate to comments. Both have almost the same structure. They store the related project and user IDs, the actual comment_text or update_text, and the timestamp when that comment was inserted. The main reason to have two tables in the model is to separate user/investor comments from project initiator comments. The comment table holds only unofficial comments, like investor’s questions and remarks. Project initiators will post their comments ( i.e. project updates) and these comments are stored in the update table. Note that project initiators who are also registered users could also write “regular” comments.

Section 3: Project Teams

Section 3: Project Teams

This subject area also contains the tables that describe the project. All of these tables are closely related with project participants and teams.

Behind every project is an organization. That will usually be an institution, a company, or a group of people, but it could also be an individual. We’ll store all such organizations in the organization table. The only mandatory attribute is the organization_name, while the details attribute can be used to describe organization in detail.

A list of all project participants is stored in the participant table. For each participant, we’ll record a:

  • first_name and last_name – The first and the last name of the participant.
  • title – The participant’s title.
  • description – A text description of participant’s experience and roles so far.
  • user_account_id – The ID of the related user account, if the participant is also a user of the crowdfunding platform. In that case, the values stored in the first_name and last_name attributes are the same in both tables. (Remember, a user account is not mandatory for participants.)
  • organization_id – The ID of the related organization, if any.
  • participated_in – The number of projects this user has participated in.

The role dictionary contains a list of each UNIQUE role_name that could be assigned to team members.

Knowledge and experience in running crowdfunding campaigns can be crucial to making a project happen, so it’s important to have a strong team. The project_team table stores all team members related with all of our projects. For each team member, we’ll store IDs for the related project, role, and participant. We’ll also store a detailed description of their project responsibilities.

Section 4: Investors

Section 4: Investors

The last subject area deals with more project stakeholders and their actions. In this case, though, the stakeholders are the Investors – the registered app users who will fund or donate to projects.

We can expect that each project will have some default investment options. Usually, users choose between a few predefined amounts, e.g. 10 USD, 25 EUR, etc. Each amount will have a different benefit for the project investor. For example, if you were to invest in a game development project, you’d be able to download a copy of the game for $10; for $25, you’d get the game plus some additional power ups; for $50 the project initiators would mention you as a contributor, and for $1,000 you’d get to name a character or object in the game.

All predefined investment options are stored in the investement_option_catalog. The option_name value can hold only UNIQUE values while the funds_min and the funds_max define the range of funds that could be invested. When the initiators set all donation amounts in advance, these attributes will share the same values.

The project_investement_option stores the predefined investment options chosen by the initiators. For each record in this table, we’ll store IDs for the related project and the related investment option. The option_name is the name that will appear on the screen. If the project initiator wants, they could keep the same option name as the one stored in the investment_option_catalog.option_name attribute. A detailed description of that option is stored in the option_description attribute. This is the place where we’ll describe investor benefits for the option.

The last table in our model is the project_investor table. It relates investors and projects. For each investment, we’ll store the ID of the related project and the related investor as well the chosen investment option. We’ll additionally store the amount of funds pledged. This is important, especially in cases when the investor can set their own donation from a predefined range of values. And finally we come to the timestamp attribute, which denotes when an investment happened.

Today we have discussed a model that could be used to store the data for a crowdfunding platform. I have described the essentials, but there is a lot we could add to this model. For example, what if a campaign is not successful? How can users track a project after the campaign is completed?

I look forward to seeing your ideas in the comment section.

 
 

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