An Empirical Examination of the Antecedents and Consequences of Investment Patterns in Crowd-Funded Markets.

Crowd-funded markets have recently emerged as a novel source of capital for entrepreneurs. As the economic potential of these markets is now being realized, they are beginning to go mainstream, a trend reflected by the explicit attention crowdfunding has received in the American Jobs Act as a potential avenue for economic growth, as well as the recent focus that regulators such as the U.S. Securities and Exchange Commission have placed upon it. Although the formulation of regulation and policy surrounding crowd-funded markets is becoming increasingly important, the behavior of crowdfunders, an important aspect that must be considered in this formulation effort, is not yet well understood. A key factor that can influence the behavior of crowd funders is information on prior contribution behavior, including the amount and timing of others\u27 contributions, which is published for general consumption. With that in mind, in this study, we empirically examine social influence in a crowd-funded marketplace for online journalism projects, employing a unique data set that incorporates contribution events and Web traffic statistics for approximately 100 story pitches. This data set allows us to examine both the antecedents and consequences of the contribution process. First, noting that digital journalism is a form of public good, we evaluate the applicability of two competing classes of economic models that explain private contribution toward public goods in the presence of social information: substitution models and reinforcement models. We also propose a new measure that captures both the amount and the timing of others\u27 contribution behavior: contribution frequency (dollars per unit time). We find evidence in support of a substitution model, which suggests a partial crowding-out effect, where contributors may experience a decrease in their marginal utility from making a contribution as it becomes less important to the recipient. Further, we find that the duration of funding and, more importantly, the degree of exposure that a pitch receives over the course of the funding process, are positively associated with readership upon the story\u27s publication. This appears to validate the widely held belief that a key benefit of the crowdfunding model is the potential it offers for awareness and attention-building around causes and ventures. This last aspect is a major contribution of the study, as it demonstrates a clear linkage between marketing effort and the success of crowd-funded projects

Understanding the Dynamic Interplay of Social Buzz and Contribution Behavior within and between Online Platforms – Evidence from Crowdfunding

Motivated by the growing interconnection between online platforms, we examine the dynamic interplay between social buzz and contribution behavior in the crowdfunding context. Since the utility of crowdfunding projects is usually difficult to ascertain, prospective backers draw on quality signals, such as social buzz and prior-contribution behavior, to make their funding decisions. We employ the panel vector autoregression (PVAR) methodology to investigate both intra- and cross-platform effects based on data collected from three platforms: Indiegogo, one of the largest crowdfunding platforms on the web, Twitter and Facebook. Our results show a positive influence of social buzz on project backing, but a negative relationship in the reverse direction. Furthermore, we observe strong positive feedback cycles within each platform. Our results are supplemented by split-sample analyses for project orientation (Social, Cause and Entrepreneurial) and project success (Winners vs. Losers), in which Facebook shares were identified as a critical success factor

Click to Success? The Temporal Effects of Facebook Likes on Crowdfunding

Small and medium-sized businesses as well as individuals are increasingly using online crowdfunding platforms to raise funds in the fintech world. Creators of crowdfunding projects depend heavily on social networks like Facebook to publicize their projects. Social media activities such as “liking” on Facebook bring massive traffic to crowdfunding projects and attract contributions. Using data collected from Facebook and Kickstarter, our empirical tests demonstrate that social media activities significantly and positively impact the likely success of crowdfunding. Our duration model analysis reveals that the impact of social media activities on crowdfunding outcomes follows a J-curve in the temporal space. We explain the J-curve by identifying two important effects of social media activities throughout the crowdfunding process: a quality-signaling effect in the opening period and a herding effect in the closing period. Especially in the “last mile,” there is a strong herding effect that helps crowdfunding projects reach their respective fundraising goals. Our results offer useful contributions to the literature and suggestions for practitioners

A Green Flag over Mobile Industry Start-Ups: Human Capital and Past Investors as Investment Signals

Crowdfunding and online start-up platforms are becoming important communication tools for start-ups and investors. Existing literatures on online start-up platforms usually focus on reward-based crowdfunding platform, which do not offer any equity to backers. In addition, there have not been many empirical researches about equity-based crowdfunding due to the novelty of the regulation. This study analyzes the association between funding amount and early stage start-ups’ underlying characteristics, the type of past investors, and influence of investors in the context of equity-based crowdfunding. The distinction of our research is the aspect of approach that we use population data from online start-up platform for the mobile industry. We find that start-up’s funding outcome is positively related to start-up’s human capital and pure investors. Moreover, our study extends theoretical understanding of the importance of human capital and past investors in start-up, and also contributes to the entrepreneurship literature by examining creditable signals for early stage start-up investment

Does the Source Matter? How Referral Channels and Personal Communication Tools Affect Consumers’ Referral Propensity

Many companies are using social sharing buttons to make it easier for consumers to refer a website or app to other potential consumers. Although these buttons are ubiquitous online, it remains unclear whether consumer referral propensity (i.e. the likelihood of consumers referring other consumers) varies across the channels through which consumers arrive at the website. In particular, we test whether referral propensity is higher for consumers themselves acquired through social referrals and compare them with consumers accessing the website through other commonly used channels, such as search engines and online advertisements. In addition, we examine whether the communication tool (i.e. social networking websites or instant messaging clients) through which the referral is transmitted affects consumers’ referral decisions. Our results indicate that consumers acquired through social referrals are more likely to make a referral and that the communication tools do not differ in their influence on consumers’ referral propensity.

WHAT IS THE RECIPE FOR SUCCESS? AN EMPIRICAL ANALYSIS OF CROWDFUNDING PROJECT PERFORMANCE

Master'sMASTER OF SCIENC

Learning from Prior Experience: An Empirical Study of Serial Entrepreneurs in IT-enabled Crowdfunding

Crowdfunding has gained momentum in recent years. Although an increasing amount of research has been devoted to this domain, the dynamics of this phenomenon has yet to be fully studied. The current study strives to bridge this gap by examining the impacts of prior experiences from serial entrepreneurs’ perspective. Drawing on organizational learning theory, we theorize about the differential effects from several experience dimensions: direct vs. indirect experiences, successful vs. failed experiences, experience richness and diversity of prior experiences. Employing a panel-level analysis approach, we document positive effects of both direct and indirect learning. However, the successful, rich and diverse experience do not always seem to facilitate learning and consequently lead to enhanced performance. Our study applies the organizational learning theory to the crowdfunding context to extend the existing crowdfunding literature in information systems by investigating the dynamics across campaigns. We also provide practical implications for entrepreneurs and platform operators

The decision-making process used by business angels and venture capitalists in Turkey and Colombia

06.03.2018 tarihli ve 30352 sayılı Resmi Gazetede yayımlanan “Yükseköğretim Kanunu İle Bazı Kanun Ve Kanun Hükmünde Kararnamelerde Değişiklik Yapılması Hakkında Kanun” ile 18.06.2018 tarihli “Lisansüstü Tezlerin Elektronik Ortamda Toplanması, Düzenlenmesi ve Erişime Açılmasına İlişkin Yönerge” gereğince tam metin erişime açılmıştır.Fon bulma tarihsel olarak girişimcilerin işlerini kurarken önemsedikleri en kritik alanlardan biri olmuştur. Yıllar boyunca, girişimciler tarafından başvurulan farklı fon bulma yoları yoğun olarak araştırmalara konu edilmiştir ancak Girişim Sermayesi ve Melek Yatırımcılar bu yolların arasındaki en göze çarpanları oluşturmaktadır. Bu tez, bu iki yatırımcı grubun temel prensiplerinin ve genel niteliklerinin ne olduğunu, yatırım süreçlerini nasıl yürüttüklerini, yatırım süreçlerinde dikkate aldıkları en önemli faktörlerin neler olduğunu ve nihai kararlarında yatırım fırsatının uluslararasılaşma kapasitesinin pozitif bir etkisinin olup olmadığını ortaya koymayı amaçlamaktadır. Bu araştırmanın önemi, özellikle Kolombiya ve Türkiye gibi ortaya çıkan olan ülkelerde yukarıda belirtilen sorulara yanıt arıyor olmasıdır. Yaklaşık olarak 45-60 dakika süren 8 yarı yapılandırılmış mülakat ile toplanan veriler sınıflandırılmış, analiz edilmiş ve içerik analizi yöntemi kullanılarak bulgular sunulmuştur. Soru seti sekiz tema altında oluşturulmuştur: genel sorular, yatırım süreci, gözden geçirme, yatırım fırsatının detaylı ele alınması ve değerlendirilmesi, anlaşmanın yapılandırılması, yatırım sonrası faaliyetler, çıkış stratejileri ve uluslararasılaşma kapasitesi. Elde edilen bulgulara göre, ortaya çıkan olan ülkelerde Girişim Sermayesi ve Melek Yatırımcıların oldukça benzer bir karar alma süreci izlediği görülmektedir. Melek Yatırımcıların yürüttüğü bir yatırım sürecinin, Girişim Sermayesinin yürüttüğüne kıyasla daha informel ve öznel faktörlere dayandığı söylenebilir. İkinci bir nokta da potansiyel yatırım fırsatlarını değerlendirirken en önemli kriter hem Girişim Sermayesi hem Melek Yatırımcılar için yönetim ekibi olduğu anlaşılmıştır. Son olarak, Girişim Sermayesi için bir girişimin uluslararasılaşma kapasitesi çok önemlidir ancak zorunlu olarak değerlendirilmezken Melek Yatırımcılar için bir girişimin uluslararasılaşma kapasitesi her açıdan zorunlu olarak görülmektedir.Funding has historically been one of the most critical areas considered by entrepreneurs while building their ventures up. Over the years, extensive research has been carried out in the distinctive funding sources appealed by entrepreneurs, however, the Venture Capital and the Business Angel investment stand out amongst them. This thesis aims to understand what the main guidelines and generalities of these two investors groups are, how the investment process is conducted, what the most relevant factors taken into account during the investment process are, and conclude on if the internationalization capacity of a venture positively impact the final investment decision given by Venture Capitalists and Business Angels. The relevance of this research goes beyond the limits as it profoundly responds to the above mentioned questions in emerging countries (specifically Colombia and Turkey). The content analysis was used to collect, group and analyze data coming from a total of 8 semi-structured interviews designed to last around 45-60 minutes. Questions were grouped to collect data in 8 specific areas of interest: Namely, General questions, Investment process, screening, deal screening and evaluation of the investment opportunities, deal structuring, post-investment activities, exit strategies, and internationalization capacity. According to the results, while it is true that VCs and BAs in emerging economies follow a quite similar making-decision process, it is safe to say, the one conducted by BAs is much more informal and based on subjective factors while compared with the one performed by VCs. Secondly, it seems the most important criterion while assessing potential investment opportunities is the management team for VCs as well as for BAs. Lastly, for VCs, the internationalization capacity of a venture is crucial yet not mandatory, conversely, for BAs, the internationalization capacity of a venture is mandatory from every point of view

Essays on Investment Behavior in Online Social Platforms

University of Minnesota Ph.D. dissertation. 2018. Major: Business Administration. Advisor: Mani Subramani. 1 computer file (PDF); 109 pages.Interpersonal interactions have been the cornerstone of research in a variety of disciplines, including psychology, sociology, economics, and management. Naturally, any fundamental shift in this regard can have far-reaching research and practical implications. In the last decade or so, one such shift has been the emergence of online platforms. By building on the advances in the internet technologies, online platforms have emerged as the new routes for interactions between different social entities, ranging from individuals to governments. For instance, Facebook and MySpace allow individuals to form online social networks, share personal information through various forms of content, and create groups and communities. LinkedIn and GlassDoor extend the same functionalities to professional networks through which individuals can seek employment, know more about a potential employer, and review their current and past employers. Twitter allows users to share news at a speed that, at times, outperforms the traditional news media. The considerable variation in the activities, which online platforms facilitate is matched by the array of research questions that different literature streams have examined. For social psychologists, the central research question is how different stimuli ingrained in most human interactions play out in online platforms. As McFarland and Ployhart (2015) argue, this research question has a potential to not only theoretically distinguish online social platforms from traditional, offline social contexts but also formulate an extensive program for future research. Regarding interpersonal exchanges in organizational settings, research questions of interest include how online platforms shape the exchanges between internal as well as external stakeholders such as knowledge sharing among employees (Wu, 2013), and customer engagement using online platforms (Kumar et al., 2016). Next, scholars have also attempted to extend established economic mechanisms, including matching markets (Horton, 2014; Hitsch, Hortaçsu, and Ariely, 2010) and network effects (Katona, Zubcsek, and Sarvary, 2011) to online platforms. Lastly, by their very nature, online platforms align with the study of social networks. Kane et al. (2014) have posited a series of research questions, adopting the social network analysis (SNA) lens for studying online platforms. Evidently, online platforms have opened newer research avenues across multiple fields. The present dissertation contributes to this body of work. The increasing economic activity happening in the digital space is our primary motivation. Perhaps no other instance underscores this trend more than the online investment and financial platforms (Lee & Shin 2018). The rising prominence of these platforms is also reflected in the recent calls for research explicitly targeted towards “Fintech” (Gomber, Kauffman, & Weber 2015; Hendershott et al., 2017). Such platforms are particularly interesting because they allow users to carry out a personal activity in a highly visible and transparent setting. For instance, Venmo broadcasts a user’s personal transactions, including bill and rent payments to her network. Kiva and Prosper publicize the amount of money that each investor has given to a Crowdfunding campaign (Lin & Viswanathan 2015). Social trading platforms allow users to broadcast their investment decisions in stocks and Forex (Glaser & Risius, 2017). Clearly, one observes that personal investment decisions and actions are increasingly taking place in a social domain. Given this transition, it is worthwhile to examine whether and how a focal user’s investments are susceptible to other users’ investment actions and decisions (Burtch, Ghose, & Wattal, 2013). The dissertation addresses this question through a series of related empirical studies