Crowdfunding: Exploring the Factors That Could Motivate People to Raise Fund or Make Investment Through Crowdfunding Platforms in Emerging Countries

Abstract

This study aims to explore the factors motivating the prospective investors towards adopting crowdfunding for making investments and assess the impact of motivators on the intention of the investors to invest in the crowdfunding projects in emerging countries. This study used a survey research to collect perceptions regarding motivators for crowdfunding investments. Also, a structural modelling equation has been adopted to model and analyse data. Motivators like monetary utility, personal utility, campaign and campaign owner, social and sense of belongingness and societal utility have been identified from the literature and empirically investigated in the study. This study has been conducted in an emerging country which could limit its generalization for this spectrum. Further studies considering the perceptual factors herein adopted could be run in developed countries in order to understand if the findings remain the same or any other contrasting evidence is observed. The model built in this study could be used by anyone who is planning to raise funds through crowdfunding. The crowdfunding platforms through the research findings can extend advice to the fund seeker and ensure that campaigns posted on his portal has the necessary ingredients. The model built is positively an initial attempt to understand the motivators which pushes the prospective investors towards crowdfunding campaigns in emerging countries. This study contributes especially to the emerging countries, in which crowdfunding concept and initiatives are still few widespread. By the understanding of perceptual factors, policy-makers may act successfully on fostering initiatives regarding crowdfunding developments. This can enhance economic and social aspects of those countries through several innovation developments. The existing literary talks about crowdfunding in developed economies, very few studies have taken place in emerging economies and moreover no study has focused on building a model which could encompass all the factors impacting investors’ decision making towards crowdfunding. This research is novel since the concept of crowdfunding is relatively new and the factors which could possibly motivate the prospective investors to consider projects for investments are not known, mainly in emerging countries and hence has been studied in the current research.