Entrepreneurial financing plays a vital role in the survival and viability of businesses
(Crosetto & Regner, 2018; Mason & Harrison, 1991; Signori & Vismara, 2017; Zhao
et al., 2019). Research studies and financial commentators have suggested that
reward-based crowdfunding (RBC) plays an increasingly important role in the
process of business start-ups (Baeck et al., 2014; Bilau & Pires, 2018; Lelo de Larrea
et al., 2019; Mollick, 2014). However, a review of literature indicates that little is
known about the field of RBC from a theoretical perspective. Therefore, the main
aim of the thesis is to address the knowledge gap by developing a conceptual
framework to advance understanding of the RBC funding process through using a
signalling theory lens.
The author adopted a pragmatist epistemological stance. This study collected
publicly available data of 636 UK start-up projects on a RBC platform, Kickstarter,
from September to December in 2017 and repeated this for the same period in
2018. It was found that signal observability (the size and quality of the fundraiser’s
network) play a significant role in crowdfunding success across all projects.
Whereas, prosocial intention (charitable purpose) plays a stronger role in predicting
the likelihood of the success of projects with a medium goal. This study identifies
and evaluates how the key factors (project quality, project intention and signal
observability) impact on crowdfunding’s success, as well as investigates the
interplay between different actors (signallers, receivers and signals) in the RBC
market. A further important contribution of this work arises from the use of rich
qualitative data in addition to the quantitative research approaches previously
utilised by others (Bi, Liu and Usman, 2017; Kunz et al., 2017).
The thesis makes contributions to both theory and practice. The findings have
major implications for different parties including: policy makers, practitioners,
researchers and educators. It provides an insight for practitioners considering the
adoption of a crowdfunding approach and the knowledge and recommendations in
running a successful RBC campaign. It also helps nascent entrepreneurs to
reconstruct their financing strategy through the better understanding of the
position of RBC in entrepreneurial financing.
An important implication is that this study can help policy makers to better
understand the RBC industry, which is essential in developing relevant policies in
this under-governed area. Finally, this research contributes to growing knowledge
and interest in entrepreneurial finance, especially in the online alternative finance
market, which is beneficial for both researchers and educators
