Crowdfunding Projects Research Articles

The Role of Entrepreneur’s Face Disclosure on Crowdfunding Success

The evaluation of crowdfunding campaigns varies from person to person; some investors are more interested in the project’s creativity, and others are more concerned with the profiles of entrepreneurs. The study investigated how entrepreneurs’ face disclosure influenced the success of crowdfunding. Secondary data were collected from multiple crowdfunding platforms for projects in Africa. That is, cross-country data from 54 African countries, to overcome data limitations from a single country. An econometrics analysis revealed that the facial disclosure of entrepreneurs increases the probability of crowdfunding success by 3%. Images, videos, and backers had a positive influence on the success of crowdfunding. On the contrary, the duration of the crowdfunding campaign was negatively associated with its success. To reduce the knowledge asymmetry between creators and backers, those prepared to start a crowdfunding project must provide as much information as possible to show their abilities. This study contributes to understanding the role of disclosing an entrepreneur’s profile on economic exchanges to the success of online crowdfunding.

The Influence of Fixed and Flexible Funding Mechanisms on Reward-Based Crowdfunding Success

This study examined whether fixed or flexible funding mechanisms influence crowdfunding success. Under the fixed funding mechanism, the pledges contributed to the crowdfunding campaign projects are returned to the backers if the project fails, whereas, under the flexible funding mechanism, the project creator can keep all the raised pledges, irrespective of whether the project succeeds or fails. Secondary data consisted of reward-based crowdfunding projects retrieved from The Crowd Data Centre. Logistic regression was employed to respond to research objectives. The results reveal that the fixed funding mechanism increases the probability of success more than flexible funding. Entrepreneur experience, spelling errors, and project description negatively affect crowdfunding success, and backers positively affect crowdfunding success. The findings guide entrepreneurs seeking financing to design and choose an appropriate funding mechanism that effectively reduces the failure rate. Although many entrepreneurs seek funding in the crowdfunding market, relatively little research has been conducted on the influence of flexible or fixed funding mechanisms on crowdfunding success in Africa. This study provides entrepreneurs with appropriate financing strategies that enhance crowdfunding success. The empirical literature indicates that the flexible funding mechanism creates distrust among backers due to unrealistic target amounts.

Typology of esports crowdfunding investors

PurposeOnline fundraising has become a rapidly growing alternative business financing method for esports. Despite this, a lack of attention has been given to its fans' motivations for participating in crowdfunding (CF) projects or behavioral intentions for spectatorship. To address this, the present study (1) categorizes esport CF investors' motivations based on the big five personality traits and (2) compares whether motivations and behavioral intentions for esports spectatorships vary depending on each group.Design/methodology/approachWe applied K-means clustering analysis to classify investors. ANOVA was used to verify whether there were differences in CF motivations and behavioral intentions.FindingsThe study identified six distinct investor segments. Overall, esports CF investors showed high agreeableness and conscientiousness with low neuroticism. Fanatic fans were the most motivated and had the highest spectatorship intentions, driven by strong openness. In contrast, recognition seekers and charity donors exhibited the lowest viewing intentions. Entertainment seekers were highly motivated by excitement and aesthetics, linking CF participation to a strong desire to watch events. Despite higher neuroticism, reward hunters also showed significant viewing intentions, driven by drama and aesthetics. These findings highlight the diverse motivations and their influence on esports spectatorship.Originality/valueThis study investigates the motivations and behavioral intentions of CF investors and spectatorship, which has substantive theoretical and managerial implications for the business of esports.

How signal portfolios affect success in equity-based crowdfunding: Evidence from the Chinese hotel industry

While most crowdfunding studies predominantly explore the success factors of reward-based crowdfunding, this research studies the efficacy of composite signal portfolios. Specifically, we investigate how bundles of substantive signals—comprising product- and firm-relevant information—and rhetorical signals—grounded in language-based information—affect the performance of equity-based hotel crowdfunding. By analyzing objective data from 512 equity crowdfunding projects within the Chinese hotel industry, our findings indicate that the combination of product- and firm-related substantive signals, such as price and team size, enhances both the amount and percentage of equity-based crowdfunding. Furthermore, our results unveil that the combination of product-related substantive (price) and rhetorical (emotional appeal) signals significantly contributes to equity-based crowdfunding success. These findings not only contribute to the existing literature on hotel crowdfunding but also offer strategic implications for equity-based crowdfunding managers in the hotel industry.

The impact of visual, auditory, textual stimuli on crowdfunding: evidence from tourism projects

ABSTRACT Discover the secrets to crowdfunding triumph. In start-up tourism enterprises, mastering the art of captivating and converting users into sponsors through multimodal stimuli is paramount. Researchers used deep learning to deeply mine the text, images and video promotional content of 3,659 travel crowdfunding projects and nine classifiers to predict crowdfunding project success dynamically. We unearthed fascinating insights: Images spark attention, but video and text drive user conversion to sponsorship. Speech tends to deliver information, facts, or opinions. Key successful project predictors include positive emotions, pro-social engagement, cognitive vocabulary, increased video scenes and rapid visual variation. While consistent multimodal data bolsters model clarity, it does not markedly boost prediction. Lastly, linear and tree-based models outperform their nonlinear counterparts and have better prediction results.

Proposing an Effective Waqf Model for Ensuring Poverty Reduction among Refugees in Malaysia

Background COVID-19 has heavily impacted the financial and economic well-being of the world’s population. Various national relief programs and initiatives have been carried out to address society’s financial difficulties, especially the issue of poverty among the vulnerable, like refugees and immigrants. Consequently, being one of the main elements in Islamic social finance, waqf has been emphasised and proven throughout Islamic history as one of the practical tools for poverty reduction. However, recent waqf initiatives towards poverty reduction focused more on aiding the micro and small entrepreneurs, whilst limited waqf initiatives were available to help low-income households, refugees, and immigrants during this critical time in Malaysia. Methods This study introduces a novel waqf model, specifically designed to contribute to poverty reduction in society. It is tailored for low-income households, refugees, and immigrants, aiming to sustain their financial independence. By combining the elements of waqf and crowdfunding, this model proposes an innovative agriculture-based microfinance programme. It utilizes undeveloped waqf lands and equity-based crowdfunding to reach its objective of poverty reduction. This study has adopted a secondary research approach using the existing scholarly literature. Results This paper also discusses the potential of the proposed model to deliver more than its primary objective, as the framework illustrates that waqf institutions will have a continuous inflow of funds that will allow them to initiate other waqf-based projects, job creation through the microfinance programmes, and financial return for the investor of equity-based crowdfunding projects. Conclusion This study not only underscores the sustainability of the proposed model, but also its alignment with the increasing awareness of value-based and social impact objectives. It further explores the potential of waqf to be integrated with other financing instruments during the pandemic to help the vulnerable, specifically refugees and immigrants. This research thus contributes to the true purpose of Islamic social finance, highlighting the significance of its findings.

Donors’ intentions to use crowdfunding-based waqf model in Kuwait: application of unified theory on acceptance and use of technology (UTAUT) model

Purpose This study aims to examine the factors that affect individuals’ intentions of participating in waqf-based crowdfunding model in Kuwait. Design/methodology/approach This study adopted the unified theory of acceptance and use of technology (UTAUT) model. The data were collected by online questionnaire survey based on 419 donors in waqf institutions in Kuwait. The data were analysed using the partial least squares structural equation modelling technique. Findings The results illustrate that performance expectancy, effort expectancy, social influence and facilitating condition positively affect behavioural intention towards waqf-based crowdfunding projects. Practical implications The paper presents an alternative source for waqf institutions to raise capital to develop waqf assets in majority and minority Muslim countries. The findings of this study hold significant implications for government officials and policymakers. Originality/value To the best of the authors’ knowledge, this paper is the first to explore waqf crowdfunding in Kuwait using the UTAUT model. There needs to be more research on waqf-giving behaviour in Kuwait, particularly concerning crowdfunding, which has become more popular recently. Thus, this paper aims to address this gap and contribute new insights to the field.

Knowledge sharing between project creators and backers in rewards-based crowdfunding

PurposeIn the context of rewards-based crowdfunding, this study aims to examine the role of project backers as providers of knowledge inputs beyond just financial capital.Design/methodology/approachThis study uses binomial regression to study the relationship between project creators’ and backers’ knowledge sharing, and the relationship of these two knowledge-sharing elements with achieving above-goal funding levels.FindingsThis study finds that the project creator’s knowledge sharing is significantly and positively related to backers’ knowledge sharing and that this relationship is moderated by the type of project. Furthermore, backers’ knowledge sharing is positively related to above-goal funding outcomes for a project.Research limitations/implicationsThis study established the link between creators’ and backers’ knowledge sharing in rewards-based crowdfunding, which has been underexplored in the literature. This study’s direct attention to the role of knowledge as a key resource in rewards-based crowdfunding and crowdsourcing in general.Practical implicationsFor entrepreneurs seeking crowdfunding, this study highlights the importance of knowledge sharing with their project backers to attain above-goal funding. Furthermore, eliciting backers’ knowledge input acts as a signaling mechanism that increases the crowd’s confidence in the project. It also endows entrepreneurs with knowledge resources that can improve project outcomes and achieve broader market success postcrowdfunding.Originality/valueTo the best of the authors’ knowledge, this study is one of the first to focus on knowledge content as a critical element in project backer-creator communication in rewards-based crowdfunding. This study also delineate the various knowledge types shared between the project creator and backers in both rewards-based crowdfunding projects.

Does transparency facilitate the fundraising capacity of public welfare crowdfunding? An empirical examination on Weibo

PurposeInformation opacity in donation crowdfunding activities has constrained the healthy development of China’s public welfare activities. Addressing the trust crisis and enhancing public engagement warrants further investigation. This study aims to uncover the moderating effect of activity transparency by utilizing data from 1,029 donation crowdfunding projects on the Sina Weibo Public Welfare Social Platform. In this way, we seek to elucidate the impact of donation crowdfunding events on fundraising ability.Design/methodology/approachThis study selects text complexity, number of supporters, creator experience, and social capital as explanatory variables; innovatively selects the number of updates of online crowdfunding activities and total reading volume as moderating variables; selects the number of shares of crowdfunding activities as a mediating variable; and constructs a moderated mediation multiple regression model for fundraising ability.FindingsOur findings indicate that independent variables, such as text complexity, number of supporters, and social capital, can significantly affect the dependent variable, fundraising ability. However, creator experience does not influence fundraising ability. Furthermore, social interaction has a mediating effect, whereas activity transparency has a reverse moderating effect. These results indicate that social interaction can enhance the fundraising ability of donation crowdfunding events. However, with an increase in information transparency, the fundraising ability of social media decreases.Originality/valueThe originality of this research is in clarifying the internal factors affecting fundraising ability through induction, making bold assumptions, and focusing on how social media’s effective interaction and activity transparency will affect public welfare crowdfunding fundraising ability.

Sharing information about medical crowdfunding projects on social networking sites: the integration of attribution-affect model of helping and social capital theory

PurposeSharing project information is critical for the success of medical crowdfunding campaigns. However, few users share medical crowdfunding projects on their social networks, and the sharing behavior of medical crowdfunding projects on social networking sites has not been well studied. Therefore, this study explored the factors and potential mechanisms influencing users’ sharing behaviors on networking sites.Design/methodology/approachA research model was developed based on the attribution-affect model of helping and social capital theory. Data were collected using a longitudinal survey. Partial least squares structural equation modeling was used to analyze the collected data. We conducted post hoc analyses to validate the results of the quantitative analysis.FindingsThe analysis results verified the effects of perceived external attribution, perceived uncontrollable attributions, and perceived unstable attributions on sympathy and identified the effect of sympathy and social characteristics of medical crowdfunding users on sharing behavior.Originality/valueThis research provides a comprehensive theoretical understanding of users’ sharing behavior characteristics and provides implications for enhancing the efficiency of medical crowdfunding activities.

How do reward personalization options influence the public’s willingness to participate in innovation projects? Insights from crowdfunding in Industry 5.0

PurposeThis study aims to examine the influence of reward personalization on financing outcomes in the Industry 5.0 era, where reward-based crowdfunding meets the personalized needs of individuals.Design/methodology/approachThe study utilizes a corpus of 218,822 crowdfunding projects and 1,276,786 reward options on Kickstarter to investigate the effect of reward personalization on investors’ willingness to participate in crowdfunding. The research draws on expectancy theory and employs quantitative and qualitative approaches to measure reward personalization. Quantitatively, the number of reward options is calculated by frequency; whereas text-mining techniques are implemented qualitatively to extract novelty, which serves as a proxy for innovation.FindingsFindings indicate that reward personalization has an inverted U-shaped effect on investors’ willingness to participate, with investors in life-related projects having a stronger need for reward personalization than those interested in art-related projects. The pledge goal and reward text readability have an inverted U-shaped moderating effect on reward personalization from the perspective of reward expectations and reward instrumentality.Originality/valueThis study refines the application of expectancy theory to online financing, providing theoretical insight and practical guidance for crowdfunding platforms and financiers seeking to promote sustainable development through personalized innovation.

Exploring the benefits and risks of displayed passion in entrepreneurial pitches

ABSTRACT Should entrepreneurs display their passion when pitching a business idea to potential funders? Entrepreneurial passion is important, but evidence about the effect of displayed passion in venture financing appears contradictory. We integrated the emotions-as-social-information perspective and regulatory focus theory in two studies using crowdfunding projects and survey responses (total N = 2,187 participants) to reveal that entrepreneurs’ displayed passion exerts two opposing effects: increasing the likelihood of funding success by fostering potential investors’ enthusiasm, while decreasing the likelihood of funding success by intensifying potential investors’ perception of risk. We also showed that an entrepreneur’s use of promotion-focused language can mitigate the negative effects of displayed passion. The results illuminate the links between displayed passion and investors’ funding decisions, resolve apparent conflict in prior findings, offer guidance for future study, and have practical implications for entrepreneurs and investors.

Crowdfunding project evaluation based on Fermatean fuzzy SAHARA three-way decision method

Crowdfunding project evaluation based on Fermatean fuzzy SAHARA three-way decision method

Strategies of Elaborating and Implementing Innovation Business-Projects on Crowdfunding

The article studies practice of elaborating and realizing Russian and overseas crowdfunding campaigns of innovation business-projects aimed at finding criteria of their success and identifying their problem zones.The standing of the global market of crowdfunding was analyzed, key principles of raising money on crowdfunding platforms were studied and the most popular categories of projects realized on the biggest platforms in Russia and abroad were identified. On the basis of comparative analysis of processes of crowdfunding campaign realization the authors formulated and checked several hypotheses dealing with strategies of elaborating and realizing crowdfunding projects. During the research in-depth interviews with representatives of platforms and developers of innovative crowdfunding projects were conducted and on their basis criteria of crowdfunding campaign success were defined and challenges of their realization were shown.

Crowdfunding innovative but risky new ventures: the importance of less ambiguous tone

Crowdfunding provides a novel and potential way for innovative but risky new ventures to fund their new product development (NPD) projects. To help potential investors evaluate the projects and enhance the credibility of disclosure, founders are struggling with how to phrase the project description. The rapidly growing cleantech crowdfunding projects provide an ideal context to study this issue. We collected information on cleantech crowdfunding projects and matched non-cleantech crowdfunding projects from Kickstarter. The sample period extends from January 2013 to October 2018. Using signaling research as a theoretical lens and a dictionary-based, computerized text mining method, we found that founders of high-quality cleantech crowdfunding projects could create a reliable signal of quality by providing a project description with a less ambiguous tone and thus boost the success of crowdfunding. Moreover, the signaling effectiveness of a less ambiguous tone is more pronounced in cleantech crowdfunding than in matched non-cleantech crowdfunding, suggesting that the marginal benefit of using a less ambiguous tone is larger when the industry information environment is noisier. Further evidence shows that the signaling effectiveness of a less ambiguous tone in cleantech crowdfunding could be strengthened by backers’ endorsements. Our findings imply that tone ambiguity in project descriptions is related to founders’ information-concealing behavior. Potential investors could search ambiguous words in project descriptions and just allocate their limited attention into projects with a low percentage of ambiguous words to avoid information overload. Founders of high-quality projects could boost crowdfunding success by using a less ambiguous tone to describe their projects. The marginal effect is larger when there is greater uncertainty about project prospects.

Text Mining Approach for Identifying Product Ideas and Trends Based on Crowdfunding Projects

Current research and development investments and innovation developments show that there are more failed innovation attempts than ever and there are numerous occasions where companies need to be highly selective by assessing customers’ needs or preferences. Crowdfunding is a great approach for this purpose, where investments are made if there are funders who are interested in the proposed innovations. As crowdfunding platforms have proved to assist in the introduction of innovations, the details of these projects can be a great inspiration for others. The aim of this study is to integrate crowdfunding projects into innovation and product developments as a source of potential ideas and trends. We use a text mining approach to analyze 8021 crowdfunding projects from the period 2009–2018. In this study, we cluster these projects into nine innovation areas desired by consumers. Through our methodological approach, we examine the linkage between associated text, features of projects, and funding of projects to uncover emerging product features that illustrate the desires of consumers. Our proposed model offers theoretical contributions to the innovation processes, especially the fuzzy front end with an open innovation approach. We provide practical contributions by revealing crowdfunding platforms as a means to gain insights into product elements for the design of new products and services.

How backers' behavior affects financing performance in agri-food reward-based crowdfunding: The moderating mechanism of initiator characteristics and project attributes.

Crowdfunding is a new type of financing favored by entrepreneurs in need of capital. Financing performance is a key concern for crowdfunding project initiators. Although a growing number of studies have investigated the factors that affect the financing performance of crowdfunding projects, there are still some issues that need to be further clarified. How does the investment behavior of backers, as the supply side of finance, affect the financing performance of project in reward-based crowdfunding? What are the moderating mechanisms of this influence by initiator characteristics and project attributes? Based on a panel data set from Zhongchou, a famous agri-food crowdfunding platform in China, this paper finds that the investment speed, the investment intensity, the number of early backers, the backers' comments, and the number of selfless backers all have significant effects on financing performance. The core trust factors of initiator characteristics and project attributes play a moderating role in the relationship between backer investment behavior and financing performance, but there are differences in the moderating mechanisms. Based on the research conclusions, practical enlightenment is proposed for initiators, crowdfunding platforms, and regulators.

Predicting Success Factors in Social Issue Crowdfunding Projects Using a Logistic Regression Analysis

Predicting Success Factors in Social Issue Crowdfunding Projects Using a Logistic Regression Analysis

A lexical bundle analysis of art-related crowdfunding projects

In the context of Open Science, crowdfunding projects are gaining increasing attention. They are becoming an alternative way of funding research and an opportunity for researchers across the disciplines to share and disseminate their work widely while engaging their potential backers. The aim of this paper is to analyze crowdfunding projects online by examining language-in-use at the level of phraseology, understanding the latter from a lexical bundle approach. Using corpus analytical approaches, the study findings show that there is a recurrence of lexical bundles conveying deontic meanings used to persuade the potential backers that the project and the research methods proposed for carrying it out are reliable and therefore trustable. Lexical bundles expressing gratitude and politeness are also recurrent, not unexpected considering that crowdfunding proposals aim to prompt the audience’s participation through donation. The findings further reveal how distinct discourse style and language features especially frequent in the conversational register realise the main communicative purpose of the genre, namely, to build credibility and trust in research with a view to persuasively enticing the backers’ audiences to donate money.

The role of project owners' and potential backers' implicit social ties in crowdfunding project success

PurposeIn this study, the authors sought to investigate how the implicit social ties of both project owners and potential backers are associated with crowdfunding project success.Design/methodology/approachDrawing on social ties theory and factors that affect crowdfunding success, in this research, the authors developed a model to study how project owners' and potential backers' implicit social ties are associated with crowdfunding projects' degrees of success. The proposed model was empirically tested with crowdfunding data collected from Kickstarter and social media data collected from Twitter. The authors performed the test using an ordinary least squares (OLS) regression model with fixed effects.FindingsThe authors found that project owners' implicit social ties (specifically, their social media activities, degree centrality and betweenness centrality) are significantly and positively associated with crowdfunding projects' degrees of success. Meanwhile, potential project backers' implicit social ties (their social media activities and degree centrality) are negatively associated with crowdfunding projects' degrees of success. The authors also found that project size moderates the effects of project owners' social media activities on projects' degrees of success.Originality/valueThis work contributes to the literature on crowdfunding by investigating how the implicit social ties of both potential backers and project owners on social media are associated with crowdfunding project success. This study extends the previous research on social ties' roles in explaining crowdfunding project success by including implicit social ties, while the literature explored only explicit social ties.