Search Results (25)

This study focused on investigating the factors that drive reward-based crowdfunding in Africa, particularly considering the increasing limitations that entrepreneurs face in accessing traditional financial resources globally, by analysing 215 crowdfunding projects from prominent platforms like Kickstarter, IndieGoGo, and Fundraised. The research aimed to identify the key drivers of crowdfunding success. The results from an econometric logistic regression analysis revealed that while images, longer campaign durations, and videos positively influenced crowdfunding, they did not significantly contribute to achieving success. In contrast, the number of backers showed a positive and significant impact on outcomes, whereas the targeted funding amount negatively influenced the success. Notably, the presence of spelling errors was found to have a positive, though statistically insignificant, relationship with crowdfunding success. These findings enhance the existing literature on crowdfunding and offer valuable insights into concepts such as information asymmetry and signalling theory within the context of reward-based crowdfunding. Full article

Crowdfunding nowadays has become a significant source of financing for all those entrepreneurs who require funds to start their operations, specifically for social ventures. Furthermore, determining what factors decide whether a project will successfully raise funds is a very relevant question. Past literature has examined various factors that influence fundraising success. Of these factors, information efficiency is the determinant of successful fundraising due to precise project descriptions and effective message delivery. Despite this fact, few studies have investigated how such project descriptions affect the success of crowdfunding campaigns, specifically sustainable projects. The present study tries to fill this gap by examining the relation between the length and readability of the crowdfunding project descriptions and the success rate for sustainable projects in a reward-based model. For the analysis, data were obtained from Kickstarter, the largest crowdfunding platform in the world, with a sample of 12,613 projects, employing a multiple logistic regression model. The results show that the word count and readability of the project descriptions are positively related to crowdfunding success. Furthermore, the analysis shows that using more words related to SDG keywords results in positive fundraising. Such insights reflect that good project descriptions are important for crowdfunding success and, on the theoretical level, provide practical value for project owners. Full article

This research seeks to clarify the uncertainty in crowdfunding literature regarding the relationship between the number of updates and campaign success. By integrating signal theory and the notion of information overload, this study posits a curved, inverted U-shaped relationship between the number of updates and campaign success. Empirical evidence to support this hypothesis is drawn from an analysis of 2852 projects sourced from a reward-based crowdfunding platform. The aim of this inquiry is to provide insights into the intricate dynamics that influence how the number of updates impacts the results of crowdfunding campaigns. Full article

This study examined whether fixed or flexible funding mechanisms influence crowdfunding success. Under the fixed funding mechanism, the pledges contributed to the crowdfunding campaign projects are returned to the backers if the project fails, whereas, under the flexible funding mechanism, the project creator can keep all the raised pledges, irrespective of whether the project succeeds or fails. Secondary data consisted of reward-based crowdfunding projects retrieved from The Crowd Data Centre. Logistic regression was employed to respond to research objectives. The results reveal that the fixed funding mechanism increases the probability of success more than flexible funding. Entrepreneur experience, spelling errors, and project description negatively affect crowdfunding success, and backers positively affect crowdfunding success. The findings guide entrepreneurs seeking financing to design and choose an appropriate funding mechanism that effectively reduces the failure rate. Although many entrepreneurs seek funding in the crowdfunding market, relatively little research has been conducted on the influence of flexible or fixed funding mechanisms on crowdfunding success in Africa. This study provides entrepreneurs with appropriate financing strategies that enhance crowdfunding success. The empirical literature indicates that the flexible funding mechanism creates distrust among backers due to unrealistic target amounts. Full article

This paper presents the results of a survey of small and medium-sized enterprises (SMEs) in Poland that have benefited from crowdfunding (CF). Based on these results, a new business model was developed. On this basis, the CF equity, reward and donation models were analyzed, and the impact of CF on the way of creating value in the company in the context of sustainable development was determined. The survey results show that the use of CF promotes the sustainable development of SMEs in Poland and significantly impacts their business model. In practical terms, this research has contributed to a better understanding of value creation by these companies. The results of our analysis are useful for consulting companies and CF platforms that help SMEs organize campaigns. In theoretical terms, the study conducted and the methodology used allow the presentation of a new definition of CF and a sustainable business model for a company using CF as well as contribute to the value management theory in SMEs. Full article

Based upon social identity theory, having a strategic entrepreneurial orientation is crucial for ventures seeking funding, since entrepreneurial orientation (viewed as an entrepreneurial organizational culture) has a significant influence on investors’ decision-making for resource allocation. However, the attitude of investors toward women entrepreneurs’ behavioral orientation is controversial. Women entrepreneurs may not benefit from specific behavioral orientations because of gender bias. In this study, we had a sample of 5105 ‘design and technology’ campaigns with explicit gender information on Kickstarter, utilizing a computer-aided text analysis dictionary of entrepreneurial orientation to examine whether the five dimensions of entrepreneurial orientation signals affected the relationship between women entrepreneurs and their performance in reward-based crowdfunding. Our findings demonstrated that investors tended to support women entrepreneurs who displayed many of the signals for autonomy and risk-taking, while backers were skeptical of women entrepreneurs displaying a high number of the signals for proactiveness. This study will enable an in-depth understanding of the link between investors’ decision-making and women’s entrepreneurial behaviors, in addition to determining which specific entrepreneurial behavior is important for helping women entrepreneurs to obtain funding in the context of reward-based crowdfunding, from a practical perspective. Full article

Due to the profitability and selfishness of crowdfunding system users, under fixed budget conditions, there are problems, such as low task completion rate due to insufficient participants and low data quality. However, the existing incentive mechanisms are mainly based on traditional economics, which believes that whether users participate in tasks depends on whether the benefits of the task outweigh the costs. Behavioral economics shows that people judge the value of gains and losses according to a reference point. The weight given to losses is more important than the weight given to the same gains. Therefore, this article considers the impact of reference dependency and loss aversion on user decision-making and proposes a participant selection mechanism based on reference dependency (PSM-RD) and a quality assurance mechanism based on loss aversion (QAM-LA). PSM-RD uses reference points to influence user pricing and selects more participants based on relative value. QAM-LA pays additional rewards based on the data quality of participants and motivates them to improve data quality by reconstructing utility functions. The simulation results show that compared with the ABSee mechanism, data quality has improved by 17%, and the value of completed tasks has increased by at least 40%. Full article

Agri-food crowdfunding, a new financing method, not only solves the financing constraints in agricultural development, but also realizes the effective connection between agricultural products and the market. Thus, exploring the impact of project factors on financing performance can help initiators design scientific and reasonable crowdfunding project plans. Based on the trust theory and the elaboration likelihood model (ELM), the trust mechanism is constructed with the characteristic attributes as the central path, the competitive attributes as the edge path, and the commitment as the mediator. Using the data of 1166 agri-food crowdfunding projects on the Taobao crowdfunding platform, I investigate the impact of disclosed project attribute information on financing performance and the mediating role of project risk. The results show that projects with a detailed explanation of the crowdfunding reason and the capital uses, a low funding goal, product qualification certificates issued by authoritative institutions, multiple types of rewards, a short reward delivery time, and a low investment threshold achieve good financing performance. The factor of commitment plays an intermediary role in the relationship between project attributes and financing performance. Based on the research conclusions, practical enlightenment is proposed for initiators, crowdfunding platforms, and regulators. Full article

Rewards-based crowdfunding (RBC) has recently gained popularity as an alternative means of finance to help entrepreneurs bring novel projects to life. We theorize that crowdfunding backers perceive an implicit psychological contract with campaign creators. When promised rewards fail to materialize post fundraising, backers may perceive entrepreneurs’ failure to deliver rewards as a violation of their psychological contract with him or her. Drawing on psychological contract theory and using Eisenhardt’s comparative case methodology, we generate insights about crowd reactions to creators’ failure to deliver rewards to backers. Our research generates the novel insight that in the event of delivery failure, backers who perceive a transactional psychological contract with creators are more likely to display negative emotional reactions, while backers who perceive a relational psychological contract are more likely to display positive emotional reactions. Furthermore, we identify three progressive stages of backers’ interaction with creators in failed RBC campaigns, ‘committing’, ‘crisis handling’, and ‘coping-up’ and highlight the crowds’ emotional valence associated with each stage. Our analyses of the campaign comments reveal insights of interest to RBC players and hold implications for the future development of crowdfunding. Full article

Reward-based crowdfunding has emerged in recent years as an interesting channel business that can leverage to obtain new financial resources outside the traditional ones. In this study, we explore how the creators of a reward-based crowdfunding campaign have engaged the crowd to create value and co-create knowledge to reduce both financial and market risks. Accordingly, we analyze the case study of the Kickstarter Campaign for Pathfinder Arena, a board game created by Giochi Uniti, an Italian Gaming Company. Through the lens of the social identity theory, we show that backers can generate the feedback processes needed to improve the product, when they want to belong in a community and when they want to interact with the creators. This research could have important implications for both researchers and future creators of reward-based crowdfunding projects, showing them the way to implement some instrument for involving the crowd to generate value. Full article

In this paper, we investigate rewards-based crowdfunding as an innovative financing form for startups and firms. Based on game-theory models under asymmetric information, we test research hypotheses about the positive effects of two main campaign features: funding target and number of rewards. Furthermore, we examine how and when these characteristics are effective in attracting crowdfunders, by signaling high-quality projects (target) and by pricing according to backers’ preferences (rewards). Conditional process analysis is applied to a dataset of 1613 projects launched on the Spanish platform Verkami from 2015 to 2018. As expected, our study shows that market size is positively influenced by the target and the number of rewards, separately. Further analysis gives some interesting findings. Firstly, we find significant and positive mediating roles of social networks (in the relationship between target and market size) and of backers’ preferences (between rewards and market size). Secondly, the main orientation of a campaign, commercial or social, is relevant to explain previous relationships. While high funding targets are more effective in commercial projects, a high number of rewards is more effective in the social projects. This research provides new insights into the design of optimal crowdfunding, with theoretical and empirical implications. Full article

Crowdfunding, as an alternative method to fundraising, triggers increased awareness in society, while it is also an effective marketing tool for campaign runners. The production and release of independent print media poses significant hurdles in terms of financing. Including the community in raising funds through crowdfunding seems like a good possible alternative. This paper examines which types of crowdfunding the independent print media use, and why, and also focuses on the possible types of crowdfunding that are the best fit for organizations. The study applies a case example approach on a total of thirty independent print publications that have relied on crowdfunding. We found that independent print media focus on reward-based crowdfunding for the launch of publications, the method being not used solely for fundraising, but also specifically for community building. Practitioners benefit from the insights by being enabled to draft campaigns that are better-suited to the specific needs of the independent media target group, and to secure financing for the start of the operations. The approach of this study is of special value, as the research and empirical insights into the independent media sector are limited. Full article

The research provides empirical evidence differentiating between market success and funding success in reward-based crowdfunding campaigns of video games and hypothesizes that the actual contribution of crowdfunding is more stemming from community support and feedback rather than funding amount. The paper uses publicly available data by combining three different sources. Project data from Kickstarter, a large crowdfunding website, in the video game category are extracted and matched with market success variables of ratings and revenues from two other public sources namely Metacritic and Steamspy. Regression results indicate that once the project is successfully funded, the funding amount does not have a significant effect on market success variables. On the other hand, the number of backers as a community support variable is a significant determinant of market success in terms of higher revenues and ratings for a project. Whether the project was successfully funded or not moderates some of the relationships. Prior literature is predominantly focused on crowdfunding success in terms of financing. Yet, this study empirically demonstrates that funding does not necessarily indicate that projects will be successful in the market and further shows the actual contribution of crowdfunding to the market success of video game projects is the community engagement, not the funding amount. This study contributes to the rapidly emerging crowdfunding literature by extending its boundaries from the crowdfunding platforms themselves to the differentiated effects of crowdfunding on market success, which has not been studied thoroughly. This paper provides a new avenue of research by suggesting not solely focusing on funding outcomes but understanding, defining and explaining the dynamics of the community aspect in crowdfunding platforms with their repercussions on market success. Future work can also highlight potential differences in these effects between product groups, as well as more holistically assess market success and capture interactions within the community on crowdfunding platforms. Full article

Reward-based crowdfunding is an alternative type of project financing in which a large and dispersed online crowd contributes relatively small financial amounts in exchange for innovative products or services. The crowd is driven by a broad set of motivations that also comprises sustainability awareness. However, empirical research on crowdfunding projects that feature social or environmental considerations provides inconclusive results. In our study, we enhance the understanding of whether a pro-social and pro-environmental orientation affects the performance of reward-based crowdfunding. We draw on the literature stream of social movements to explain how linguistic framing mobilizes individuals and relate this to how selection is enabled and action is guided in a crowdfunding setting. Based on a sample of 1049 projects from Kickstarter, we employ computer-aided text analysis (CATA) to capture the pro-social and pro-environmental orientation of the project descriptions and transcribed video pitches as linguistic constructs. We found that the level of pro-social or pro-environmental orientation has an inverted U-shaped effect on crowdfunding performance. Moreover, this relationship differs when crowdfunding projects feature a creative product or service idea. Our results suggest that entrepreneurs need to delicately balance a pro-social or pro-environmental orientation and find the “right” level of emphasis to create a competitive advantage. Full article

Recently, crowdfunding has become a popular e-commerce model based on web 2.0 platforms for fundraisers to collect funding from a large group of supporters using the Internet. However, many projects failed to reach their funding targets. Despite the growing interest of academic researchers and e-commerce professionals in identifying drivers of crowdfunding success, important factors like competition and incentive design have not received much attention in prior research. In this study we aim to fill this gap by investigating the impact of competition and incentive design on the performance of crowdfunding projects. Drawing upon literature of entrepreneurship, we develop a research model involving key factors such as competition intensity and the number of reward levels. Using real data of 209 independent movie projects of an online crowdfunding platform, we test the proposed hypotheses of the impact of competition and incentive design on crowdfunding success. Our results show that competition plays a significant role in crowdfunding performance. The higher competition pressure is, the lower performance of crowdfunding projects will be. We also find that factors such as the number of reward levels and the plan of attending movie festivals are essential to the success of crowdfunding projects, but the funding level of getting the top reward does not exert a significant impact. Our study contributes to the e-commerce literature by further exploring the mechanism of crowdfunding success with theoretical explanation and empirical evidence. Researchers and professionals can apply our theoretical findings regarding competition and incentive design in other e-commerce platforms. Furthermore, our results provide useful managerial insights and operational policies for project founders and managers of crowdfunding platforms. Full article