Analyzing campaign’s outcome in reward-based crowdfunding

Abstract

PurposeThe purpose of this paper is to probe how reward-based crowdfunding campaigns accomplish their goal by adopting the theoretical constructs of social capital dimensions: structural, cognitive and relational.Design/methodology/approachThe approach used is a design model for concluded campaigns in a Mexican crowdfunding platform, which determines social capital from operating social networks (Facebook and Twitter). By using this model, the associations between the dimensions are revealed, verifying how social capital flourishes during the campaign and how it alters the campaign’s outcome.FindingsThe findings demonstrate how social interaction through a wide social network (structural dimension), shared vision and values among entrepreneurs and their potential funders (cognitive dimension), and the development of trustworthiness within the campaign (relational dimension) boost the probability of achieving the crowdfunding goal.Research limitations/implicationsThe results inform researchers on how social capital is forged from social networks during a crowdfunding campaign. However, the method must be validated with other crowdfunding models and other social network platforms commonly used by campaign creators.Practical implicationsContributions from this paper include tools (design model and evaluation method) associating theory with the crowdfunding mechanism, complementing previous work. Crowdfunding providers, as well as campaign creators, have now an approach to appraise social capital and obtain the desired goal.Originality/valueIn addition to providing much-needed research on the current state of crowdfunding, this paper analyzes the link between practice and theory, which can be valuable in confining the mechanism to an accurate theory and ensuring the theory’s longevity.