How Does Fundraiser-claimed Product Innovation Influence Crowdfunding Outcomes

The crowdfunding platforms have always been dedicated to supporting and inspiring innovative, and creative campaigns. However, limited research has been done to examine the fundraiser-claimed product innovation in campaign descriptions and its relation to fundraising performance. In this paper, we aim to tackle this important yet understudied problem. More specifically, we adopt a deep learning-based approach to extract sentences that contain innovation claims from project descriptions. We then conduct an empirical analysis to study the relation between fundraiser-claimed product innovation and crowdfunding performance by using a large sample consisting of 11,521 projects collected from Kickstarter across 4 project categories. Findings show a statistically significant association between fundraiser-claimed product innovation and crowdfunding performance. Additionally, the number of focal project innovation claims has a curvilinear relationship (inverted ‘U’ shape) with crowdfunding performance. Our study contributes to both product innovation detection and crowdfunding literature by demonstrating the association between product innovation presentation and crowdfunding performance

Crowdfunding Success Factors:A State-of-the-Art Analysis

Over the last few years, crowdfunding has gained attention as an alternative source of funding for a variety of projects. Increasing numbers of creative, artistic, and entrepreneurial projects search for funding from the crowd. Although first variables with impact on a project\u27s funding success have been identified, a comprehensive understanding towards creating successful crowdfunding projects remains unclear. This paper analyzes the existing body of knowledge regarding crowdfunding success factors. As a result, we propose a fundamental framework with four dimensions to structure the existing insights of crowdfunding success factors and derive a research agenda to guide further research

Rebate Rules in Reward-Based Crowdfunding: Introducing the Bid-Cap Rule

We study the efficacy of rebate rules in reward-based crowdfunding, where a project is only realized when a funding goal is met, and only those who pledge at least a reservation price receive a reward from the project. We propose and experimentally test two rebate rules against the customary all-or-nothing model. Firstly, we adapt the proportional rebate rule from threshold public good games to our reward-based setting. Secondly, we develop the novel bid-cap rule. Here, pledges must only be paid up to a cap, which is determined ex-post such that the provision point is exactly met. Theoretically, the bid-cap rule induces weakly less variance in payments compared with the proportional rebate rule. In our experiment, we find that both rebate rules induce higher pledges and increase the project realization rate in comparison to the all-or-nothing model. Further, we can confirm that the variance of payments is lower under the bid-cap rule compared with the proportional rebate rule

Tackling Crises Together? – An Econometric Analysis of Charitable Crowdfunding During the COVID-19 Pandemic

Crowdfunding platforms enable individuals or groups to appeal to the public to support a variety of ventures or campaigns. Whilst the majority of campaigns raise funds for private causes, some of the issues for which help is being sought have arisen as a direct consequence of world events and crises. Nevertheless, the research on charitable crowdfunding has largely ignored this connection. We use the COVID-19 pandemic, and related public health policies, to explore the impact of the global crisis on donation behavior on the donation-based crowdfunding platform GoFundMe. By using a quasi-experimental research design, we find that after the introduction of stay-at-home orders, campaigns in U.S. states with such measures experienced a significant decline in the number of donors and amounts donated, which is more pronounced for crisis-related than for non-crisis-related campaigns. Our findings contribute to the literature by providing novel insights on crowdfunding behaviors in times of societal crisis

For love or money? The effect of deadline proximity on completion contributions in online crowdfunding

Purpose: The authors investigate whether the individual “completion contributions” that enable online crowdfunding campaigns to meet or exceed their targets tend to be larger in relative terms when made nearer to the funding deadline. As these contributions are likely to have a disproportionate impact upon campaign outcomes, the authors assess whether the investment patterns they observe are consistent with the theory of impact philanthropy. Design/methodology/approach: The authors use campaign-level data incorporating observations on campaigns from reward (both all-or-nothing, AoN and keep-it-all, KiA), donation and equity-based platforms. To the knowledge of the authors, the coverage of the data is unparalleled elsewhere in the crowdfunding literature. Using these data, the authors analyze whether completion contributions tend to vary contingent upon both the proximity of the deadline and form of crowdfunding. Findings: The authors find that completion contributions tend to vary significantly and positively with proximity to funding deadlines. The authors also find that this relationship tends to be more pronounced among AoN than for KiA campaigns, as well as for donation-based platforms compared with equity-based platforms. Altogether, the patterns of behavior observed are consistent with the theory of impact philanthropy. Originality/value: The authors help develop a better understanding of the behaviors of contributors to online crowdfunding campaigns and whether those behaviors are consistent with altruistic motivations. The findings also have considerable value in understanding the non-financial factors associated with the informal financing of business startups

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

Exploring the role of e-waste management solutions and message framing in influencing consumer behaviours : the crowdfunding context

Electronics waste (e-waste) is the fastest growing category of hazardous solid waste in the world. While the generation of e-waste has recently attracted the attention of a number of researchers, currently, there is little awareness on its management, monitoring and control among the consumers of crowdfunding platforms. This is surprising because the supporters (backers) of crowdfunding are usually considered as disruptive innovators by other stakeholders. In this light, this research explores the role of e-waste management solutions and the formulation of “message framing” in influencing consumer behaviours in crowdfunding contexts. To do this, this study involves an in-depth investigation of fund-raising campaigns focused on e waste, that were promoted between 2009 and 2020, through Kickstarter’s reward-based crowdfunding platform. The results show that environmentally sustainable projects focused on waste reduction and pollution prevention are generating increased funds and triggering the interest of a number of crowd investors who are willing to finance such laudable initiatives. At the same time, the findings suggest that the fundraisers elaborate framing messages on environmental protection and on the preservation of the natural eco-systems can increase the likelihood of the success of their crowdfunding projects. This contribution contributes to both environmental management and to the crowdfunding literature. In conclusion, it offers practical implications for sustainable entrepreneurs who may resort to crowdfunding platforms to raise finance to decrease the accumulation of e-waste from the planet, as well as for other stakeholders including governments, policymakers, and public agencies.peer-reviewe

Crowdfunding and social capital: a systematic review using a dynamic perspective

Several literature reviews on crowdfunding categorise crowdfunding research into different perspectives but provide limited theory development. The social capital literature offers a promising lens for understanding crowdfunding. We provide a comprehensive review of how internal social capital develops through crowdfunding activities and how both external and internal social capital affect crowdfunding campaign dynamics, including early-stage performance, general process, funding performance and post-campaign performance. Most researchers report a positive but dynamic impact of social capital on crowdfunding activities over time. We apply a dynamic view to develop a conceptual model that explains how external and internal social capital affect crowdfunding campaigns. We conclude with proposed directions for future research, including an analysis of the negative aspects and the causal effects of social capital

Two Sides of the Same Coin: Essays Investigating the Founder and Backer Dynamics of Crowdfunding

Crowdfunding provides the opportunity for entrepreneurs to acquire capital for their projects by utilizing a platform that allows the masses to provide funds towards the completion of the project. Thus, it can be looked at as two sides of the same coin. On one side you have the entrepreneurs seeking the funds otherwise known as founders, and on the other are those that provide the funds also known as backers. The purpose of this study is to investigate what factors lead to founders successfully attaining their funding, what motivates backers to support the projects, and whether the founders can deliver post-funding. Under the theoretical lens of signaling theory, the first study explores how founders manage the information asymmetry dynamic within crowdfunding and what factors are associated with acquiring the capital to successfully fund technology-based projects within reward-based crowdfunding. Specifically, I predict that the innovativeness of a project, the skills, abilities, honesty and kindness of founders, can positively affect crowdfunding achievement. I also hypothesize and test that positive emotional characteristics can strengthen the relationship between products usefulness and funding success. Data was collected from the Kickstarer.com crowdfunding platform to test the theory. The analyses show that specific individual skill (entrepreneurs’ industry experience) negatively influences their funding success, but entrepreneur’s personal characteristics (previous funding experience and frequent updates) are positively related to crowdfunding achievement. In addition, the level of education positively influences the relationship between innovation and funding success. The study suggests that social factors dominate crowdfunding more than economic soundness, however recent studies suggest a conflict. Moreover, there has been little to no research investigating what happens after crowdfunding achievement. Building off of the first study, the second essay focuses on two areas, what motivates funders to give and do they know what they are doing. Specifically, I investigate which signals are most effective at identifying founders that deliver on their projects. I argue that three types of orientations are exhibited by backers as a result of the signals they prioritize. They include stakeholder, enthusiast, and advocate orientation. Backers that exhibit stakeholder orientation are more likely to support projects that the founders can execute post-funding in terms of delivery time and quality expectations, whereas those that display advocate orientation will support projects where they may never be executed by the founder. Enthusiast orientation is characteristic of backers that are focused on the innovativeness and usefulness of a product. Consequently, these products may be too difficult for founders to deliver on time or meet the quality expectations they set forth. In order to test the hypotheses, I conduct a survey of backers, which provides the opportunity to shed light into an area that has been significantly neglected in crowdfunding research. Whether backers know how to select effective entrepreneurs