Reward-Based Crowdfunding : How to Make it Work?

The paper aims to identify attributes having a significant impact on the successful financing of crowdfunding campaigns published on the largest crowdfunding platform based on reward models in the Czech Republic. The paper’s motivation arises from the theoretical background of crowdfunding and related empirical research, where crowdfunding based on rewards is analysed. The paper aims to identify the determinants of the success of selected crowdfunding projects using logistic regression analysis. Results of the logit estimation show that the number of fans on the campaign’s Facebook page, the use of video in the campaign and the size of the campaign’s financial goal have a significant impact on the campaign’s success. The last part of the paper also includes the limitations of the performed analysis and suggestions for further analysis of crowdfunding

Warm-Glow Giving, Hedonism, and Their Influence on Muslim User Engagement on Loan-Based Crowdfunding Platforms

This paper investigates how platform design features affect the funding motivation of Muslim users on loan-based crowdfunding platforms. Theoretically grounded in Andreoni’s warm-glow giving theory and Sober and Wilson’s model of evolutionary and psychological giving, this work has high practical relevance, given the increasing demand for Islamic financial products. Loan-based crowdfunding platforms are important to the unique context of this research since Islamic religious constraints regulate monetary transactions involving lending. We used a scenario-based survey developed on the basis of a pilot study and confirmed by our manipulation check. The results show that “hedonism” represented by monetary interest negatively affected Muslim users’ willingness to engage in a loan-based crowdfunding project. This finding challenges the commonly agreed-upon egoistic motivator for loan-based crowdfunding platforms (i.e., monetary interest), which is based on Western Christian and Chinese Confucian capitalist economic and financial paradigms. Remarkably, we also found that Muslim funders’ level of willingness to engage on the hedonistic platform had an exponentially positive effect on the amount of money that funders were willing to lend. By contrast, “warm-glow giving,” manifested as belonging to a community, had no effect on users’ engagement. Implications of these findings for theory and practice are discussed

Role of Social Capital in Crowd Funding Campaigns: Exploring Factors That Fuel Success in Crowd Funding Campaigns

Crowdfunding provides a convenient method with which to collect funding from an immense base of investors without geographic boundaries and intermediaries. In recent years, it has become entrenched as a surrogate funding source to traditional external finance for entrepreneurs. This paper offers an exploration of factors that propel crowdfunding ventures from a dataset of 182,216 projects and over $2 billion in funding from the two most common crowdfunding platforms based on rewards, namely, Kickstarter and Indiegogo. While previous studies have identified certain elements that lead to success in crowdfunding campaigns, this study delves into the pivotal success factors influencing funding success based on social capital theory. This study asserts that the strength of the promoter’s social network ties increases funder commitment to a crowdfunding campaign and funder trust, both of which lead to a successful campaign. We further predict funder’s perceived risk to be a critical factor in a campaign’s success. We explore prior studies in the literature with a common framework into various financing options and evaluate the crowdfunding paradox from funders, promoters, and online platform dimensions. This study also examines the potential significance of social capital, promoter commitment, and funder risk to crowdfunding campaign success, representing an addition to the literature. This empirical investigation is a quantitative study of crowdfunding campaign characteristics associated with influencing funders to make decisions to invest that uses the social capital theory as a conceptual framework. This model adds practical findings concerning crowdfunding campaigns. It also presents a reliable model for businesses to determine further how to tap into potential elements that can augment the success of crowdfunding campaigns in raising funds