I wrote this article because I was irritated by reporters calling me and saying, “I’ve heard that a Regulation Crowdfunding campaign is very expensive.” “Really,” I’d say? “Can you tell me who said that and how much is ‘very expensive’?” This was usually followed by an awkward silence and then an “Um, I don’t know. It’s just what I’ve heard.” So, I decided to answer the question myself since I have access to all the successful regulation crowdfunding campaigns.

I created a survey, emailed 485 campaigns owners (also known as issuers), and received 81 responses; a 16.7 percent response rate. So, we will consider these preliminary findings. I asked two main questions up front:

How many total people (including yourself) worked on your campaign? What would you estimate to be the total cost of putting your campaign together?

I then broke the campaign down into the following tasks: creating the copy and graphics that appear on the campaign page, creating company disclosures (like the pitch deck, business plan, product or service overview, financials, and cap table), creating the campaign video, marketing and PR, and finally hiring legal and accounting help to create the offering memorandum, investor agreements, file Form C with the SEC, and review financials/provide opinion letters.

I asked about how many people worked on each task, time spent, cost, and any comments they had. I summed up the data and analyzed the results.

Here are the key findings:

Startups spent an average of $16,878 (median $10,600) and raised on average $319,040 ($164,375 median). Since the average raise among the survey responders ($319,040) was greater than the current industry average of $225,000, our results are biased towards issuers who raised more money. The average startup had three people focused on launching their campaign. They spent on average a collective 241 hours from campaign preparation to launch and funding. This indicates there is a lot of effort required by more than one person to run a successful campaign. You can estimate the costs to put your campaign page together, create your company disclosures, film the video, hire a marketing firm, lawyer and accountant at around 5.29 percent of your raise. This is much less than a typical Reg D offering would cost in legal and accounting fees alone. There is a direct correlation between how much time and money is spent and how much money is raised (the more spent, the more raised). No two issuers spent the same amount of time, effort, or funds on all tasks. However, the majority of time and effort went into creating the company disclosures, followed by creating the campaign page, marketing outreach, and video production. The majority of issuers outsourced the legal and accounting tasks associated with putting together a regulation crowdfunding offering. Given that selling securities is a regulated process and that CPA review of financials over $100k is necessary, this makes sense.

So if you are raising the current average amount of $225,000, you can expect to spend $11,902.50. An amount that actually seems quite realistic for that amount of money (and for the effort required to raise that money). It is also an amount that is NOT very expensive when considering the alternative options in the private capital markets.

Based on this preliminary research, I’ve put together the following chart outlining the amount a company should budget for its fundraising campaign based on how much it hopes to raise.

Keep in mind that, just because there is a correlation between the more time/money spent and the amount raised, you shouldn’t just spend the maximum amount in an attempt to hit the maximum funding target – it doesn’t work that way. Crowdfunding comes down to marketing and who you know, so work on managing your expenses and focus your efforts on pulling in as many supporters to your campaign as possible.

Sherwood Neiss is a partner at Crowdfund Capital Advisors. He helped lead the U.S. fight to legalize debt and equity based crowdfunding and coauthored the book Crowdfund Investing for Dummies.