Successful Funding Through the Crowd: Towards a Research Synthesis Framework

Abstract

In the past ten years, crowdfunding has emerged as promising online fundraising tool for entrepreneurial finance and has inspired a rich body of literature. Due to the different crowdfunding types and success models, multidisciplinary findings on crowdfunding performance are fragmented and there is needs for theory building. With this paper we explain how and why crowdfunding campaigns are successful. We apply mechanism-based theorizing and develop an explanatory research synthesis framework based on fifty-seven evidence-based empirical crowdfunding studies published in the top management and business journals. We identify five social mechanisms and their boundary conditions. Crowdfunding success can be explained by relational, economical and personal impact considerations of individuals, which are formed and guided by social norms. When the context specific social norms and cognitive level aspects align and induce trust in beneficial outcomes of the own behavior, reciprocity and social sanctioning drive collective action and crowdfunding success.