Abstract
This paper explores equity crowdfunding platforms from a marketing perspective. The present exploratory study attempts to make a double contribution to the current literature on equity crowdfunding. Firstly, it analyzes the marketing strategies of the platforms by focusing on the well-known 4Ps marketing mix framework, i.e. product, price, promotion and placement. Each dimension presents three types of categories. Second, the study investigates the marketing strategies of both large platforms and small platforms, then the differences between these two types of platforms are examined in terms of campaigns’ outcomes, i.e. funding collected (in %), funding amount (in €) and number of investors. Platforms adopt a standardization strategy for pricing and placement, while a differentiation strategy is mainly adopted for promotion and products. Large platforms offer a wider range of services (in particular ongoing campaign services and post-campaign services) and promotional activities (in particular leverage many communication channels). The analyses disclose significant statistically differences between these two types of platforms. Projects posted on large platforms are more likely to get higher campaigns’ outcomes. In literature, little is known about marketing strategies in equity crowdfunding platforms, thus this study tries to fill this gap. The paper is the first to analyze the 4Ps of platforms and to conduct a comparative empirical study to determine the differences of campaigns’ outcomes between large and small platforms. The Italian context represents a significant case of developed country in theme of equity crowdfunding. The results are useful for platform managers, entrepreneurs, investors and authorities.
Highlights
Crowdfunding is one of the new actors that have entered the entrepreneurial finance arena (Block et al, 2018) and it has experienced a rapid expansion after the 2008–2009 global financial crisis (De Buysere et al, 2012; Yamen & Golfeder, 2015)
Platforms adopt a standardization strategy for pricing and placement, while a differentiation strategy is mainly adopted for promotion and products
Large platforms offer a wider range of services and promotional activities
Summary
Crowdfunding is one of the new actors that have entered the entrepreneurial finance arena (Block et al, 2018) and it has experienced a rapid expansion after the 2008–2009 global financial crisis (De Buysere et al, 2012; Yamen & Golfeder, 2015). The ECF market is constantly growing: 400 million dollars in 2013, 1.1 billion dollars in 2014, 2.56 billion dollars in 2015 and over 4 billion dollars in 2016 (Massolution, 2016) In this scenario, crowdfunding platforms are spreading worldwide. Since the majority of ECF platforms operate with the AON (all or nothing) model, where companies set a funding goal below which they do not keep any of the pledged funds (Cumming et al, 2014), the success of campaigns is a critical aspect In this vein, many scholars examined several factors—related to the characteristics of companies and campaigns—which affect projects’ success (e.g., Ahlers et al, 2015; Vismara, 2016), while only a limited number of studies focused on the characteristics of the platforms (e.g., Cumming & Zhang, 2018; Rossi & Vismara, 2018). This article is structured as follows: Section 2 presents a review of literature; Section 3 presents the research design including the research context, data and marketing strategies; Section 4 presents the results while the last section concludes the paper
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