Creative industries project financing through crowdfunding: the roles of fund target & backers

Abstract

Many SME entrepreneurs in the creative industries have difficulty funding creative projects because of limited access to banks or venture capital. Crowdfunding can be an alternative for financing creative projects such as art, cultural events, books, and film projects. This research explores crowdfunding as an alternative funding for entrepreneurs with a focus on fundraising targets and the role of backers. Multiple regression and probit methods are used to test the empirical significance of fundraising through crowdfunding gradually. The results showed that the value raised in the first week and supporters significantly correlated positively in determining the success of financing creative projects through crowdfunding. The number of fundraising targets has a significant negative effect on crowdfunding success. Proponents of creative projects play a significant positive role in driving success in the funding phase by 25%–75% in raising funds through crowdfunding. But project supporters are no longer important if the project has reached 100% or more of the fundraising target. The backer role is very significant at the level of fund collection when it reaches 25%, 50% and 75% of the fundraising target. Creative entrepreneurs also must be careful in setting targeted funds because it impacts the overall fundraising success.