Reward-based crowdfunding is a form of innovative financing that allows project creators to raise funds from
potential backers to start their ventures. A crowdfunding project is successfully funded if and only if the
predetermined funding goal is achieved within a given time. We study the optimal timing of contingently
placing a “fulcrum” in the random pledging process, with the potential of tilting it towards success, which
would be a win-win-win for the creator, backers, and platform. Specifically, we consider a model where
backers arrive sequentially at a crowdfunding project. Upon arrival, a backer makes her pledging decision
by taking into account the expected success of the project. We characterize the dynamics of the project’s
pledging process. We show that there exists a cascade effect on backers’ pledging, which is mainly driven by
the all-or-nothing nature of crowdfunding projects. According to our data collected from the most popular
online crowdfunding platform, Kickstarter, the majority of projects fail to achieve their goals. To address
this issue, we propose three contingent stimulus policies, namely, seeding, feature upgrade, and limited-time
offer. As a result of the cascade effect on backers’ pledging, the optimal timing to apply stimulus policies
has a cutoff-time structure. Lastly, we show that the benefit of contingent policies is greatest in the middle
of crowdfunding campaigns. Testing with the dataset of Kickstarter, we obtain empirical evidence that the
projects’ success rates improve by 14.6% on average with updates in the middle of the campaign and when
the pledging progress is lagging.