What motivates and deters the ‘crowd’ in crowdfunding in Malaysia?

Objective: This study intends to theorize about how values and the perception of risk of the supporters of a crowdfunding project affect the success of the project. Methodology: A review of prior literature is carried out to identify the different dimensions of the decision making process. Implication: This research presents a conceptual framework to describe the influence of perceived values and risk on the success of crowdfunding in Malaysia. The crowdfunding phenomenon is relatively new in Malaysia and there is a lack of knowledge about the decision making of the ‘crowd’.  The success and sustainability of the crowdfunding phenomenon depends on the supporters of the funds

Factors Affecting Success of Serial Crowdfunding: From Heuristic and Systematic Perspectives

Much of the current crowdfunding literature focuses on revealing determinants of one-time crowdfunding performance. However, the impacts of existing platform cues on serial crowdfunding performance remain largely unexplored. Drawing heuristic-systematic model, this study examines how performance-based heuristics cues and opinion-based systematic cues exert differential impacts on subsequent crowdfunding performance. This paper will fill the research gap in the crowdfunding literature by examining how backers are processing performance-related and opinion-related information when making decisions in serial crowdfunding context

Exploring the Nudging and Counter-Nudging Effects of Campaign Updates in Crowdfunding

Crowdfunding has emerged as a vital financing avenue for entrepreneurs to realize their ventures. With limited information availability, crowd-funders may choose to first follow the progress of interested crowdfunding campaigns, such as monitoring project updates to acquire more information for justifying investment decision, before making pledges. Although campaign updates have been touted to be a salient driver of fundraising success, the underlying mechanism for this relationship remains unclear. Subscribing to nudge theory, we strive to shed light on how update strategies, such as frequency and message length, can serve as nudges to convert project followers to actual funders. Specifically, we posit a dual-role of campaign updates whereby an over-zealous update strategy may induce a counter-nudging effect that deters prospective funders, what we labelled as ‘over-nudging’. This study advances a model to account for both the nudging and counter-nudging effects of campaign updates in crowdfunding, which could yield insights for fundraisers to optimize their update strategy and in turn, get their business off the ground

The Effectiveness of Governance Mechanisms in Crowdfunding

During the last years, crowdfunding gained attention as alternative source of funding for a variety of projects. More and more creative, artistic and entrepreneurial projects search funding through the crowd. However, crowdfunding markets are often considered inefficient and shaped by information asymmetries. Although first project characteristics towards governance mechanisms have been identified, the general use of governance mechanisms in crowdfunding and their impact on funding success have mostly remained uncovered. With that in mind, we present preliminary results on the influence of governance mechanisms on funding success of crowdfunding projects. We assessed 108 projects from 18 platforms in order to measure the use of governance mechanisms and to discover differences between the types of crowdfunding. We find that archetypes of governance mechanisms with influence on the funding success exist and intend to contribute to theory that explains the use of governance mechanisms in crowdfunding

Donor Retention in Online Crowdfunding Communities: A Case Study of DonorsChoose.org

Online crowdfunding platforms like DonorsChoose.org and Kickstarter allow specific projects to get funded by targeted contributions from a large number of people. Critical for the success of crowdfunding communities is recruitment and continued engagement of donors. With donor attrition rates above 70%, a significant challenge for online crowdfunding platforms as well as traditional offline non-profit organizations is the problem of donor retention. We present a large-scale study of millions of donors and donations on DonorsChoose.org, a crowdfunding platform for education projects. Studying an online crowdfunding platform allows for an unprecedented detailed view of how people direct their donations. We explore various factors impacting donor retention which allows us to identify different groups of donors and quantify their propensity to return for subsequent donations. We find that donors are more likely to return if they had a positive interaction with the receiver of the donation. We also show that this includes appropriate and timely recognition of their support as well as detailed communication of their impact. Finally, we discuss how our findings could inform steps to improve donor retention in crowdfunding communities and non-profit organizations.Comment: preprint version of WWW 2015 pape

Guanxi, trust and reward-based crowdfunding success : a Chinese case

Author's accepted manuscript (postprint).acceptedVersio