Crowdfunding Model Research Articles

Common types of Crowdfunding Models, Related Concepts and Its Impact on Business: A Brief Literature Review

Crowdfunding is one of the tactics of raising finance by asking a large number of people each for a small amount of money to support innovative business ideas like new projects via the internet through various models. However, how individuals demonstrate readiness or solicitation on strategic networks in a virtual environment is much less clear and there is no comprehensive overview of literature review on different crowdfunding models. The present review puts an attempt to address these gaps and explored the impacts and the foremost crowdfunding concepts like funder, project creator and platform. This is an independent article based on a bibliographic search conducted using electronic databases such as EBSCO, DOAJ, RESEARCH LIFE, EMBASE, and Google Scholar. The result disclosed that the most universally applicable models of crowdfunding websites are; the equity-based model, donation/social based, lending model, and reward-based model. Interestingly, the review revealed that the lending and rewards models are leading in terms of funds raised across the globe and mostly adopted by investors. It also indicated the rapid growth of crowdfunding is helping small and medium businesses to create job opportunities for young people despite an increasingly challenging environment and its negative impacts on business. Finally, the review recommends researching crowd-funding and the impact of social media in the changing modern technologies and the legality of crowd-funding platforms in various nations.

Crowd funders’ motivations to support impact-oriented projects

ABSTRACT Alternative methods of financing are increasingly popular in Switzerland and project creators are turning to models like crowdfunding to get funding from a group of individuals, rather than investors. Semistructured interviews were conducted with experts from various backgrounds to better understand the importance of the crowdfunding model when assessing the crowd’s motivation to support impact-oriented projects. This study uncovers the segmentation of crowdfunding models into two categories and the implications for crowdfunding campaigns in each one. Reward and donation-based campaigns must highlight their projects’ positive impacts on society, relative to environmental and social aspects, while equity and lending-based campaigns must emphasize financial criteria, such as the return on investment they can generate for their backers.

Crowdfunding System Models in the African Context: The Susu and Yibima Concepts in Ghana

The study examines the operations of Susu, which is a Ghanaian indigenous crowdfunding concept of fund mobilization in support of micro enterprises. The study further explores a typology of the Susu concept known as Yibima, which is an emerging concept, which has not been explored by existing literature. The key concepts of these indigenous crowdfunding models are critically considered and the study is conducted using qualitative research method. The study presents an inductive approach from data samples using Grounded Theory to develop a theoretical framework for the study. There was a constant comparison of analyzed data, grounded theory coding, observation and personal experience to come out with a theoretical view that Susu bears similarities with crowdfunding and that Yibima is a typology of Susu that has not been explored by other scholars. This assertion is reinforced by the application of inductive reasoning based on interview data. The findings, therefore, reveal that during Yibima campaigns, project initiators make a general appeal to the public (crowd) and these campaigns are launched on social media platforms and funds raised from such campaigns could be used as startup capital for business ventures or for supporting community projects. Following on the reviewed of existing literature and based on Grounded Theory from analyzed data, the study put forward a theory that Susu satisfies all the conditions to be classified as a crowdfunding concept. In addition, the findings also shows that Yibima satisfies the requirements to be a typology of the Susu as a concept.

Farmers’ interest in crowdfunding to finance climate change mitigation practices

Agricultural activities and associated land use change are a major contributor to global anthropogenic greenhouse gas (GHG) emissions, making climate change mitigation in the agricultural sector all the more critical. However, farmers' willingness to adopt GHG abatement depends, to a large extent, on the financial implications of new practices. Climate change mitigation is unlikely to be adopted without external (financial, socio-cultural, or other) incentives. The research presented in this paper considers farmers' preferences for financing climate change mitigation practices through public crowdfunding. As a first study of its kind, we investigate farmers' attitudes towards climate change mitigation, knowledge of crowdfunding as a fundraising method, and interest in using public crowdfunding campaigns to finance on-farm mitigation practices. Based on a choice experiment survey with 443 Norwegian farmers, we show that knowledge about crowdfunding as an alternative finance method is generally low. Respondents who are interested in using crowdfunding prefer donation- or reward-based crowdfunding models that cover the full cost of mitigation over a loan-based model or campaigns that only fund a proportion of the costs. A financially secure farming business, previous exposure to crowdfunding, and a strong sense of responsibility to abate climate change are associated with higher farmers’ interest in using crowdfunding. We find that farmers in Norway are hesitant to be publicly presented as recipients of crowdfunding, which suggests that crowdfunding is best set up as joint campaigns (e.g. with other farmers) that are run by intermediary organisations (rather than by individual farmers). Our findings highlight that, while opportunities to use crowdfunding as a fundraising method for agricultural climate change may be limited, properly designed campaigns can provide an effective instrument to engage certain groups of farmers in on-farm climate change mitigation.

The Crowdfunding Model, Collective Intelligence, and Open Innovation

In recent years, crowdfunding has attracted the attention of tech startups. It has become a good alternative way to readily raise funds, especially during the early startup stages. However, in the case of mass intelligence, it is quite difficult to ensure the accuracy and reliability of knowledge. Individual investors who are not experts in science and technology often face difficulties investing in technology companies. In this regard, a new type of collective intelligence formed by accredited professionals needs to be attempted. This paper explores an alternative crowdfunding model for enhancing access to technology investments by the general population through an investor acceptance model. We developed an investor acceptance model to examine how the crowdfunding model involving scientists and engineers is adopted by individual investors using survey data from the general population. The results revealed that individual investors have a positive attitude towards investing through the crowdfunding model when they perceive that the information provided by a group of scientific experts is useful. We found that the perceived usefulness of the information from scientists and engineers is affected by the perceived quality of the information and perceived credibility of the scientists and engineers. We also suggest a basic concept for the crowdfunding model utilizing the collective intelligence of scientists and engineers for tech startups. The results could suggest a policy direction for promoting innovation.

From Government Funding to Crowdfunding: Identifying Approaches and Models for Universities

Malaysian public universities are bracing for funding cuts and moving towards autonomous status causing them to be more innovative in generating income. Crowdfunding has been part of the solutions. Unfortunately, the emerging of university crowdfunding platforms in Malaysia is relatively slow as compared to the universities in the U.K. and U.S. This study aims to explore approaches and crowdfunding models used by the universities. This study highlights different approaches used by the universities in incorporating crowdfunding into their funding strategies, which can be differentiated into two main groups, namely setting up a university-operated crowdfunding platform and using existing third-party platforms. The investigation on the Skolafund crowdfunding shows that it could be an example of which the crowdfunding model fits Malaysian universities. The findings in this paper can help the universities to ease the burden due to the budget cut impact by utilising crowdfunding.

Understanding Reward Delivery Obligations in Reward-based Crowdfunding: A Theoretical Analysis

Crowdfunding has emerged as a significant and growing source of capital for entrepreneurs. Among major forms of crowdfunding, reward-based crowdfunding (RBC) model is the most prevalent one. In this paper, we focus on the implementation stage of the RBC model and build an integrated theoretical framework to explain the commonly observed failures and delays in delivery of rewards to investors and to explain how these failures and delays may be perceived by investors as violations of entrepreneurs’ reward delivery obligations. We review RBC as a contractual relationship between entrepreneurs and investors. Drawing on entrepreneurial personality theory and psychological contract theory, we develop propositions and identify factors related to both entrepreneurs (overconfidence and narcissism) and factors related to investors (types of motivators and psychological contracts) that may explain failures and delays in reward delivery as well as perceived violations of reward delivery obligations. Implications for theory and practice are also discussed.

Analysis on the Financing Dilemma and Countermeasures of China's Small, Medium and Micro Enterprises in the Information Age

Expand financing channels for small, medium and micro enterprises, reduce loan costs, solve financing data matching, and improve financing efficiency. Analyze P2P financing model, e-commerce microfinance financing model, and online crowdfunding model. To a certain extent, the problems of narrow financing channels, high costs, high risks, and difficulty in applying for small, medium and micro enterprises have been alleviated. Using the ever-changing Internet technology to innovate the "Internet +" financing model, overcome the financing difficulties caused by insufficient government attention, discrimination in bank target selection, and the relatively small size of the enterprise itself, expand financing channels, and improve financing efficiency, Enabling small, medium and micro enterprises to get out of the “embarrassed” situation in which development is hindered by financing difficulties.

Proposed waqf crowdfunding models for small farmers and the required parameters for their application

PurposeSmall farmers are considered one of the most affected communities worldwide due to poverty. Hence, this paper aims to study how the proposed waqf crowdfunding models are intended to provide alternative sources of funds for the waqf institutions and farmers.Design/methodology/approachThe present study employed a qualitative method by analysing the relevant literature on crowdfunding, waqf cash, waqf and agriculture, together with the primary sources of the Ḥadīth.FindingsThis paper provides the conceptual framework of two waqf crowdfunding model (WCM) and the required parameters for their application. It is found that crowdfunding can bring immense benefits to the agriculture sector and farmers if it is integrated with waqf. This system will enable underprivileged farmers to meet their necessities and participate in their country's economic development.Research limitations/implicationsFuture research may consider a waqf crowdfunding integrated model targeting other businesses.Originality/valueThis study provides the required parameters for the application of the proposed models. Four areas were analysed and discussed: the regulatory compliance parameters, the shariah compliance parameters, the risk management parameters and, finally, waqf governance parameters. To the best of the author's knowledge, this is the first proposed waqf and crowdfunding integrated model for agricultural financing.

Faktor yang Mempengaruhi Niat Perilaku Muslim Menggunakan Platform Crowdfunding Waqf: Teori UTAUT Model

This study aims to examine the determine behavioral intentions influence Muslim using platform crowdfunding waqf by adopting the concept of the Unified Theory of Accaptance and Use of Technology (UTAUT) model. The platform crowdfunding waqf acts as an intermediary between wakif and nadhir waqf in developing a productive waqf project. This study uses primary data collected using an online survey questionnaire and then the analysis used is partial least square (PLS). The results of this study indicate that the variable performance expectations, effort expectations, and facilitating conditions have a positive and significant effect on the intention of Muslim crowdfounders to use waqf crowdfunding platform. Meanwhile, the social influence variable has no positive and significant effect. This study will contribute to the existing literature, especially on the factors that influence the adoption of the waqf-based crowdfunding model.

Entrepreneurship and fintech development: comparing reward and equity crowdfunding

PurposeStarting from the state-of-the-art of Fintech development, this study aims to propose some research propositions comparing reward-crowdfunding (RCF) and equity-crowdfunding (ECF). In this sense, the present research provides a comprehensive analysis of fintech development and – to conceptualize the comparison between RCF and ECF – it focuses on campaigns’ characteristics, aims and post-campaigns scenarios.Design/methodology/approachAll the research propositions related to the comparison between RCF and ECF are rooted in dedicated literature. The methodological approach adopted in the present paper can be referred to theorizing.FindingsThis study suggests that five key elements characterize the development of fintech: regulation, infrastructure, technologies, finance and innovations. The research provides nine propositions: four related to the campaigns’ characteristics; two related to the use of crowdfunding models by entrepreneurs; and three related to the performance of crowdfunded companies.Practical implicationsBy offering nine research propositions, this study is expected to foster and support the investigation of fintech development from an entrepreneurial and managerial point of view.Originality/valueTo the best of authors’ knowledge, this study is among the first to explore the fintech development and to propose a comparative approach between RCF and ECF. This research contributes to the current debate on fintech development as well as on the comparison between crowdfunding models.

Crowdfunding model for financing movies and web series

Movies and web series are the most popular destinations of crowdfunding, and various approaches have been followed by project initiators. Filmmakers may use specialized or general crowdfunding platforms to raise money, propose fixed or flexible budgets, and use reward-based or equity-based crowdfunding. Crowdfunding may entirely or just partially finance production. To date, no standard model has been used for the production of movies and web series through crowdfunding. Recently, content-based web series on over-the-top (OTT) platforms, such as Netflix and Amazon Prime, have gained popularity. The aim of this study is to fill this conceptual gap and propose a crowdfunding model for movies and web series that can be applied and used to benefit all stakeholders: filmmakers, backers, distributors, platform owners, and the entire future audience. The model consists of nine chronologically interlinked phases and six types of flows: information/content, funds, audition, decision-making, content, promotion, and rewards. The conceptual model proposed herein is based on a critical analysis of the extant literature in the field, mainly qualitative analyses performed on successfully and unsuccessfully crowdfunded and professional films in connection with the current technical platform functionalities.

The Signal Value of Crowdfunded Products

Crowdfunding has emerged as an alternative means of financing new ventures by utilizing the financial support of a large group of individual investors. This research asks a novel question: Does being crowdfunded carry any signal value for the broader market of observing consumers? Seven studies reveal a consumer preference for crowdfunded products, even after controlling for a product’s objective product characteristics. The authors identify two inferences that help explain this effect: (1) consumers perceive crowdfunded products to be of higher quality, and (2) they believe that supporting crowdfunding reduces inequality in the marketplace. The authors further document an important boundary condition of the first inference: the identified effect reverses in high-risk domains (e.g., products that involve high physical risk) due to consumer perceptions that the crowdfunding model lacks sufficient professionalism to mitigate risk. With regard to the second inference, the authors find that the positive crowdfunding effect is particularly strong among consumers who value social equality. Taken together, this work sheds new light on consumer perceptions of crowdfunding, elucidates why and when consumers prefer crowdfunded products, and offers actionable implications for managers.

Technology Acceptance In Crowdfunding Among Retailers

Crowdfunding is currently Malaysia's fastest growing source of alternative finance for companies. It is an enticing opportunity for entrepreneurs with innovative ideas who would not otherwise have found capital to leverage the power of the audience to bring goods and projects from the ground. Crowdfunding has traditionally been the go-to funding solution for individuals, startups and entrepreneurs. But more recently, retailers and larger companies have been using crowdfunding as an investment route, market research tool or promotional technique. The obvious attraction of crowdfunding for retailers is that it sidesteps the need to convince a bank or investor you can make their investment worthwhile. But the rewards of the crowdfunding model are not just financial. A crowdfunding campaign can raise awareness of a brand or product, deliver valuable information about demand for a product or service, and create an already established customer base once a campaign is complete. Hence, this research focused on determining the factors that could influence the prospective retailers' intention to collect fund from crowdfunding platform. The research selected the UTAUT model to determine the prospective retailer's intention toward collecting fund to the crowdfunding project. There were four independent variables, namely performance expectancy, effort expectancy, social influence, and reliability. The intention of the prospective retailer was selected as the dependent variable. With respect to the literature review, four hypotheses were developed in this study. To test the developed hypothesis in this study, descriptive research was adopted by applying a self-administered questionnaire distributed to respondents. For this study, convenience sampling was selected, whereby 379 respondents responded and answered the questions. All the independent variables have shown that they were positively significant to the intention of the prospective retailer. Hence, the intention of prospective retailer is influenced by performance expectancy, effort expectancy, social influence, and reliability. This research successfully contributed to the knowledge in this field by applying the UTAUT factor in the context of crowdfunding for expanding retail business. Regarding practitioners in this field, this research could act as a guideline or reference to enhance the retailer's intention to collect fund in a crowdfunding project. Lastly, for policymakers, it is hoped that this research could be used as a standard and reference for future crowdfunding initiatives by the government.

Choosing a crowdfunding model considering strategic customer behaviour

Initial creators can launch reward-based crowdfunding projects using either of two models: All-Or-Nothing (AON) and Keep-It-All (KIA). Under AON, creators receive nothing unless the funding target is achieved. Under KIA, creators keep the entire amount raised, regardless of whether the funding target is achieved. Therefore, under AON, customers will obtain high-quality products if the funding target is achieved, and otherwise, obtain nothing. Under KIA, high-quality products are produced if the goal is met and otherwise, the results are scaled-down products whose quality depends on the amount of funding raised. We build a two-stage model in which two customers (representing informed and uninformed customers) sequentially make their decisions in the two stages. This paper focuses on the opportunity cost borne by the informed customer who pledges in the first stage and we analyse how his strategic behaviour affects the creator's model selection. Our analysis shows that when the fixed cost is large, the AON model has a higher success rate and is more profitable than the KIA model. By analysing the expected profit, success rate and risk by numerical study, we show that (1) when the fixed cost is small, KIA is more profitable than AON. (2) The success rate using the AON model is always higher than that using the KIA model. (3) The risk under AON is higher than under KIA in most cases.

Equity-based Islamic crowdfunding in Malaysia: a potential application for mudharabah

PurposeThis paper aims to explore the potential application of mudharabah (silent partnership) as an investment instrument through an Islamic crowdfunding platform.Design/methodology/approachThis is a qualitative study in which semi-structured interviews were carried out with several experts regarding the application of mudharabah in Islamic crowdfunding. To achieve the purpose of this study, the data is analysed based on thematic analysis.FindingsThe findings reveal that even though Islamic crowdfunding could be an efficient platform through financial technology (Fintech), mudharabah is not an entirely ideal instrument, particularly for equity-based Islamic crowdfunding because of its high risk. These include fraudulent projects, insufficient regulations to protect investors’ money and the structure of mudharabah itself in which it is in the form of profit-sharing contract. However, the risk can be mitigated by using Fintech as a way to closely monitor the project, enhancing regulatory aspects to protect investment funds, enhancing mudharabah practice and creating awareness among all involving parties in terms of mudharabah philosophy.Research limitations/implicationsThis study is limited because it focuses on the current practice of Islamic crowdfunding in Malaysia, given that it is still a new industry. Currently, there is only one Islamic registered equity crowdfunding platform. Also, as the number of interviewees in this study is limited because of purposive sampling, the findings may be considered the result of an exploratory study.Practical implicationsAn equity Islamic crowdfunding platform based on mudharabah can be proposed, particularly to support micro enterprises in which they involve small capital. Also, this model can be considered for less risky ventures such as investment in food industries or technology sectors.Social implicationsMudharabah Islamic crowdfunding model could potentially support local businesses, especially for start-ups. By channelling money among society, it is not only creating a wealth circulation among society, which is one of the Sharīʿah objectives in finance, but it also promotes mutual cooperation and kindness among society members.Originality/valueWhile Islamic crowdfunding is not a new topic in research, it lacks empirical studies, particularly qualitative analysis. As this study engages with experts in Sharīʿah and crowdfunding regarding the potential application of mudharabah, it highlights a fresh discussion both in theory and practice.

Philanthropic-crowdfunding-partnership: A proof-of-concept study for sustainable financing in low-carbon energy transitions

This study presents a proof-of-concept focusing on sustainable crowdfunding models for renewables as alternatives to conventional financing instruments and proposes a Philanthropic-Crowdfunding-Partnership (PCP) model. In this regard, this research investigates social welfare by evaluating the change in wealth inequality for the future time horizon by simulating conventional and the PCP financing models on solar farms in the case study of Turkey. The motivation is to find a solution for financing regional development in a holistic approach considering society and the environment to accomplish sustainable development. Furthermore, it also aims to provide insights into innovative public-private partnerships to unlock new horizons for development by incorporating citizen participation at large. The PCP model’s objective is to mobilize capital throughout the public by prioritizing individuals along with small and medium enterprises over the large corporates in fundraising for renewable energy projects, mainly solar farms. This paper provides quantitative evidence that the PCP functions as a sustainable and alternative financing model by dramatically reducing wealth inequality. Besides, the PCP holds the potential to become a self-sufficient financing mechanism for projects ranging from small ones to mega initiatives.

MODEL OF FINANCING AN INNOVATIVE PROJECT IN HIGH-TECH BUSINESS (ON THE EXAMPLE OF GAME INDUSTRY)

Purpose. The aim of the article is to develop the methodical recommendations on formation of model of financing of the innovative project in high-tech business (on an example of the game industry). Methodology of research. The following methods of scientific research were used in the process of writing this article: comparison - to determine the differences and common features of the phenomena under study; grouping - to determine the project of financing methods, crowd funding models; synthesis and analysis - to detail the object of study, by breaking it down into parts. Findings. The article provides guidelines for the development and implementation of a model for financing an innovative project in high-tech business, which contains three components. Peculiarities of business promotion in the field of game industry, which influence the choice of sources of financing, are determined. It is substantiated that the financing of innovative business should combine different sources according to the phases of project implementation. It was found that the use of non-traditional sources, in particular crowd funding, is in great demand. The main models of crowd funding used in modern conditions of financing of innovative enterprises are generalized. Relevant models of working capital management at different phases of innovation project implementation are determined. Originality. The scientific novelty of the research results is the improvement of theoretical and methodological provisions for the formation of a model for financing an innovative project in high-tech business on the example of the game industry. The key parameters of this model are the presence of three components that allow to take into account the specifics of the game industry: the choice of production model, the choice of funding sources, the choice of funding model. Practical value. The functioning of the model of financing an innovative project in high-tech business reflects the experience of corporate finance management, financial modelling and adaptation of these practices for enterprises in the field of innovation. The results of the study will be useful for application in the practice of domestic enterprises that implement innovations, will attract investors. Key words: financing model, game industry, innovative project, high-tech business, crowd funding.

Crowdfunding in Kenya: Factors for Successful Campaign : The Case of Kickstarter Crowdfunding Platform

The study aimed at investigating the factors that lead to successful crowdfunding campaigns in Kenya. The success factors of reward-based crowdfunded campaigns vary in different countries due to differences in cultures, legal requirements, social interactions, political and business environments. With very minimal research on crowdfunding funding in Kenya, the study therefore, aimed at analyzing reward-based crowdfunding in Kenya using Kickstarter data, and identifying the crucial factors necessary to run a successful campaign. To achieve this objective, the study used a multiple regression and Pearson correlations. The study found a statistically significant regression equation hence the regression model was considered a good fit. The study using the Pearson correlations analysis found a very strong and positive statistical correlation between updates, amount pledged, backers, and successful projects, moderate but positive statistical correlation between comments, new backers, returning backers, and successful projects. However, there was a negative but insignificant correlation between the goal, funding period, and successful projects. The novelty will be of great benefit to project funders who want to run successful projects in Kenya. This is because the concept of crowdfunding is still new in Kenya and has not been widely publicized, accepted, or researched. The results of this study will guide potential founders on the do’s and don’ts of running a successful campaign. Finally, the study recommends further research on the success factors of other crowdfunding models in Kenya as the study solely focused on the reward-based model.

Retracted] Marketing Method and System Optimization Based on the Financial Blockchain of the Internet of Things

This article makes relevant research and analysis from theory and practice, respectively. At the same time, with reference to the current state of the Internet, relative analysis was used to focus on the state of commercial banks. The analysis mainly focuses on the problems encountered in the current Internet development in various forms such as the bank’s sales status and customer products. In addition, it really made a reasonable opinion about the relevant sales status of this bank. It systematically studied the development history of marketing products of financial blockchain in China’s financial blockchain and analyzed the process of gradual improvement of the functions and characteristics of marketing products of financial blockchain in China. The characteristics and shortcomings of the marketing products of the financial blockchain were discussed in detail, and from the perspective of technological innovation, the application of emerging technologies in the marketing of China’s financial blockchain was analyzed. This article analyzes the many challenges and opportunities faced by security firms in the development of the Internet. Under the new situation, what kind of development model to adopt and how to transform and upgrade is the strategic proposition that security firms must think about. Based on Internet finance, this article finds that the equity crowdfunding model can be selected in the future development of security companies. On the one hand, the use of equity crowdfunding by security firms can enhance their direct financing capabilities, which will benefit the security industry, especially Internet security firms. On the other hand, through equity crowdfunding, security companies can expand direct financing channels for small, medium, and micro enterprises to promote entrepreneurship. The paper promotes the development of Internet finance, thereby improving the ability of the capital market to serve the real economy.