Crowdfunding Participation Research Articles

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.

Brand crowdfunding using followers boosted through gamification affordances: insights from two emerging markets

PurposeBrand crowdfunding, launched through brands’ social media platforms, can provide a myriad of crowdfunding and branding benefits, such as strengthening brands’ social networks, validating product launches, generating mass exposure and enabling cocreation. Gamification positions brand crowdfunding as an exciting and joyful activity that more deeply engages prosumers. Anchored on resource-based theory, theory of planned behavior and service-dominant logic, this paper aims to develop a brand crowdfunding framework for established brands with insights from two emerging markets: China and India.Design/methodology/approachA deductive cross-sectional design is used to gather data from an established brand’s (e.g. Xiaomi) social media followers in China (n = 826) and India (n = 358), which is analyzed through PLSc-SEM.FindingsThe results reveal that social media brand engagement is an antecedent of brand crowdfunding participation, brand crowdfunding intention is a predictor of brand loyalty and gamification is a significant moderator in technology-oriented societies.Originality/valueThe paper develops a brand crowdfunding framework that provides insights on how established brands can leverage crowdfunding to enhance their new product development process. The results contribute to the social media brand engagement, crowdfunding, gamification and emerging markets literature.

Institutional Trust, Interpersonal Trust and College Students' Participation in Crowdfunding

Institutional Trust, Interpersonal Trust and College Students' Participation in Crowdfunding

Pricing strategies in reward-based crowdfunding: Whether to introduce price guarantee?

Reward-based crowdfunding often exhibits high uncertainty in terms of product quality and market performance; thus, consumers may choose to strategically delay their purchases until crowdfunding succeeds. Price guarantee (PG) is adopted by some crowdfunding platforms to encourage consumers’ participation in crowdfunding, but it also reduces the flexibility to change prices in the future. To address the strategic issue for reward-based crowdfunding regarding whether to introduce PG, we develop a two-stage theoretical model composed of a crowdfunding stage and a regular selling stage. The results show that whether to introduce PG heavily depends on the crowdfunding project’s funding target and community benefit. When the funding target is relatively low, the creator can offer PG as an effective substitute for community benefit to achieve crowdfunding success and increase profit, but it is unwise to offer both. That is, introducing PG can simultaneously increase the crowdfunding amount and the two-stage profit in the case of relatively low community benefit. When the funding target is relatively high, the creator will adopt a target-dependent pricing scheme to guarantee crowdfunding success. In this case, PG can increase the upper bound of the funding target but will decrease the profit in most situations. Our results also show that PG can increase both the creator’s and consumers’ payoffs under some conditions. The main findings are verified by means of empirical examples, and some managerial insights are obtained.

The role of trust and e-WOM in the crowdfunding participation: the case of equity crowdfunding platforms in financial services in Iran

PurposeThe aim of this research is to examine the roles of trust and electronic word-of-mouth (e-WOM) in crowdfunding (CF) participation for equity CF by taking into account the following antecedents of trust and e-WOM: intrinsic motivation (IM), extrinsic motivation (EM), deterrents, venture quality (VQ), third-party seal (TPS), value congruence (VC) and perceived accreditation (PA).Design/methodology/approachIn this research, a survey among 408 active and potential funders in Iran was conducted. The statistical analysis used partial least squares structural equation modeling (PLS-SEM).FindingsThe results of this research revealed a significant influence of trust and e-WOM on participation in CF for equity CF. Extrinsic motivation had the greatest impact on trust and VC had the greatest impact on e-WOM.Originality/valueThis research extends the equity CF research area to CF success and considers the effects of some parameters on CF participation. This research provides many theoretical and practical implications.

Crowdfunding in higher education: evidence from UK Universities

In contemporary higher education systems, funding is increasingly associated with performativity, assessment, and competition, and universities are seeking different forms of financing their activities. One of these new forms is crowdfunding, a tool enabled by the digitalization of finance. Based on data from the UK higher education system and two crowdfunding platforms, our study adds to previous crowdfunding research in academic settings that have, thus far, focused on research projects, and assesses who is participating, their level of engagement and the resources they have gathered from crowdfunding. Our findings show that crowdfunding is used more by universities that have fewer resources. These universities are more teaching-oriented, less prestigious, and have a student body largely derived from lower socio-economic sectors of society. The popularity of crowdfunding in this type of university suggests that crowdfunding may enhance the democratization of higher education funding. However, as optimal crowdfunding participation and engagement requires high academic-to-student ratios and total-staff-to-academic-staff ratios, universities facing a greater financial precarity may be disadvantaged in their access to and engagement with crowdfunding. Differentials between part-time and full-time student ratios may exacerbate this disadvantage. Our study suggests that crowdfunding is a viable means of obtaining additional financing for learning activities complementing the fundings from other sources, but raises concerns about the use of crowdfunding as a burden to academics and students to find resources to meet learning experiences that ought to be provided by universities in the first place.

The Effects of Consumption Value and Consumer Trust on Crowdfunding Participation Intention

The Effects of Consumption Value and Consumer Trust on Crowdfunding Participation Intention

The Study on the Difference in Corporate Performance and Employment Outcomes According to the Results of Equity-Based Crowdfunding Investment

The purpose of this study is to identify the difference in firm performance and employment growth between successful and failed capital procurement through equity-based crowdfunding. We conduct an empirical analysis using entire crowdfunding projects that attempted to raise capital through equity-based crowdfunding in South Korea in 2016. We summarize our findings as follows. Descriptive statistics show that the survival rate, sales growth rate, profitability growth, absolute employment growth, and employment growth rate of companies with successful crowdfunding are higher than those of companies with failed crowdfunding. However, from the difference analysis, we do not find a significant difference in the survival rate, sales growth rate, and profitability growth between companies with crowdfunding success and companies with crowdfunding failure. We find that the absolute employment growth and employment growth rate are significantly higher for companies that succeeded in crowdfunding projects compared to companies that did not. In this study, we find that the characteristics of these firms that are conducting or verifying new projects through equity-based crowdfunding financing are similar to those of prior studies results confirming the short-term effects of entrepreneurial activities or new business activities on economic performance and employment growth. In particular, it is very meaningful to confirm that the direct effect of employment growth is also found in start-up firms that raise capital through equity-based crowdfunding. By investigating the difference in firm performance and employment outcomes according to the results of equity-based crowdfunding investment, this study provides useful insights to investors for their efforts to validate participation in crowdfunding. Also, our study raises important policy implications for regulators in their efforts to resolve unemployment and the lack of capital problem for startups and new businesses.

Altruism and Internal Locus of Control as Determinants of the Intention to Participate in Crowdfunding: The Mediating Role of Trust

This paper aims to analyze the determinants of participation in crowdfunding. As any individual may participate in a crowdfunding project, the study analyzes the general audience as potential contributors. This study develops and tests a model that includes personal determinants-internal locus of control and altruism-of the intention to participate in crowdfunding. Trust in crowdfunding is proposed as a mediator in the model. Data from 245 individuals were gathered via an online panel to test the hypotheses. Altruism and internal locus of control are found to enhance trust in crowdfunding, which, in turn, influences individuals’ intention to participate. Companies or entrepreneurs that are currently using or expecting to use crowdfunding to finance their project should develop marketing strategies that focus on enhancing trust towards their projects. Likewise, they should target individuals who are more altruistic and with higher levels of internal locus of control.

Investment crowdfunding in the visitor economy: the roles of venture quality, uncertainty, and funding amount

ABSTRACT Investment crowdfunding is a growing means to finance startups and small businesses, including in the visitor economy (tourism, leisure, sports, creative media, arts, and culture). However, research on investor behaviour in investment crowdfunding is extremely limited in this area, particularly with respect to the impacts of venture quality, uncertainty, and funding amounts. To investigate this gap, a comprehensive and integrated model on the effects of venture quality and uncertainty level is developed and tested on crowdfunding participation in investing in visitor economy projects in South Korea. Results show that venture quality and uncertainty level had significantly positive impacts on crowdfunding participation which, in turn, highly influences word-of-mouth and re-participation. The funding amount invested was found to moderate the relationships among those constructs in the research model. Consequently, this study offers new insights for researchers and industry stakeholders in investment crowdfunding in the tourism and leisure sectors.

Subjective Norms and Intention- A Study of Crowdfunding in India

The study is aimed to explore the factors of subjective norms and their influence on shaping the intention of people to participate in crowdfunding. Data was collected from 155 respondents who have been involved in one or many crowdfunding campaigns as a contributor or fundraiser. Data was analyzed using various statistical tools like data reliability test, factor analysis, correlation, and regression. It was found that intention to participate in crowdfunding is shaped by the influence of family and friends and people have high motivation to comply with the approval of these reference groups. Influence of other reference groups like a supervisor, teacher, neighbor, social network friend, etc. has no impact on shaping the intention of people towards crowdfunding. The study will be useful for crowdfunding platforms to understand the influence of referent groups on people regarding crowdfunding participation.

Why people participate in online political crowdfunding: A civic voluntarism perspective

Digital technology allows people to participate in various social activities easily. In politics, online crowdfunding has been gaining attention because it gives politicians benefits to raise political funds from the public. It is also convenient for backers to donate money to support their chosen politicians. This study examines the factors driving people’s intention to participate in online political crowdfunding. By employing the civic voluntarism model and cognitive dissonance theory, this study develops an integrated model to explain people’s intention to participate in online political crowdfunding. The results show that perceived congruence between politicians and individuals is one of the most influential driving factors for online political crowdfunding participation. The findings further reveal that perceived congruence is lowered by individuals’ negative perception of the political situation. This research proposes important implications for researchers as well as practitioners to promote online crowdfunding not only in politics but also in other domains.

What drives crowdfunding participation? The influence of personal and social traits

Purpose Crowdfunding has become a popular and achievable means of funding projects worldwide. The purpose of this study is to determine which personal and social traits can increase individuals’ intention to participate in crowdfunding. Design/methodology/approach This study examines innovativeness, attitudes toward helping others and interpersonal connectivity as determinants of consumers’ intention to participate in crowdfunding. Social identification with the crowdfunding community is proposed as a mediator in the model. Findings The results show that both social identification with the crowdfunding community and innovativeness have a positive effect on intention to participate. In addition, attitudes toward helping others and interpersonal connectivity indirectly affect intention to participate in crowdfunding through social identification with the crowdfunding community. Research limitations/implications This study analyzes a general audience of potential crowdfunders; therefore, the results identify just the indications for potential intentions to participate in crowdfunding activities. Practical implications Companies or fund-seekers currently using or expecting to use crowdfunding have to develop strategies focused on promoting social identification with the crowdfunding community. More effort should be devoted for developing consumers’ social relationships and ties within the crowdfunding community. Originality/value This study contributes to the literature by clarifying the characteristics that potential crowdfunders should have to be more prone to participate in these types of projects.

When consumers become project backers: The psychological consequences of participation in crowdfunding

Crowdfunding involves financing new ventures by relying on a large number of individual project backers who typically receive the venture's new product as a reward for their financial support. In three experimental studies, it is revealed that crowdfunding participation increases the extent to which consumers can personally connect to and identify with the focal venture compared to customers who merely buy the product in a classic market exchange setting (the baseline in our analysis). This identification process, which is rooted in the insight that one's financial contribution is perceived to be more meaningful to the focal venture, is also shown to trigger behavioral effects on important outcome variables such as increased subsequent consumption of the venture's products and more positive word-of-mouth behavior. The studies thus validate the idea that crowdfunding may be an effective tool to build strong(er) relationships with the venture's initial customer base. Hence, crowdfunding might not only answer the question “Where could I get funding from?” but also another: “Where can I effectively connect with my future customers?” The findings further point to interesting consequences for participating consumers: because the venture is more strongly perceived as theirs, this means that also the associations linked to it may rub off more strongly on their sense of self compared to customers who merely buy the same venture's product in a classic market exchange setting. Crowdfunding participation may thus more strongly effect a qualitative change in the consumer's self-concept.

Examining Community Dynamics of Civic Crowdfunding Participation

Over the past decade, crowdfunding has emerged as a legitimate, albeit niche, resource for public service delivery. Predicated on utilizing the resources of the crowd to address public issues, civic crowdfunding has the potential to offer citizens a greater role in service delivery and community development. This study investigates community dynamics and their potential impact on project success in jurisdictions proposing civic crowdfunding proposals. The results highlight the dynamics and characteristics of communities where project proposals are likely to find funding success. The results further highlight several potential opportunities for future research to better understand how and why these projects truly work.

Which updates during an equity crowdfunding campaign increase crowd participation?

Start-ups often post updates during equity crowdfunding campaigns. However, little is known about the effects of such updates on crowd participation. We investigate this question by using hand-collected data from 71 funding campaigns and 39,399 investment decisions on two German equity crowdfunding portals. Using a combination of different empirical research techniques, we find that posting an update has a significant positive effect on the number of investments made by the crowd and the investment amount collected by the start-up. This effect does not occur immediately in its entirety; rather, it lags the update by a few days. Furthermore, the effect of updates loses statistical significance with the number of updates posted during a campaign. We also find that an easier language used in updates increases crowd participation, whereas the length of updates has no effects. With respect to the update’s content, we find that the positive effect can be attributed to updates about new developments of the start-up such as campaign developments, new funding, business developments, and cooperation projects. Updates on the start-up team, business model, product developments, and promotional campaigns do not have meaningful effects. Our paper contributes to the literature on the effects of information disclosure on equity crowdfunding participation. Furthermore, our results have practical implications for start-ups and their investor communication during equity crowdfunding campaigns.

When Consumers Become Project Backers: The Psychological Consequences of Participation in Crowdfunding

Crowdfunding involves financing new ventures by relying on a large number of individual project backers who typically receive the venture’s new product as a reward for their financial support. In four studies, it is revealed that crowdfunding participation increases the extent to which consumers can personally connect to and identify with the focal venture compared to those who merely buy the product in a classic market exchange setting. This identification process, which is rooted in the customer’s initiative to help and support the venture, is also shown to trigger more pronounced engagement activities, such as increased subsequent consumption of the venture’s products and more positive word-of-mouth behavior. The studies thus validate the idea that crowdfunding may be an effective “tool” to build strong(er) relationships with the venture’s initial customer base. The findings also reveal interesting consequences for participating consumers: because the venture is more strongly perceived as “theirs,” the associations linked to it also rub off more strongly on the consumers’ sense of self and may thus effect a qualitative change in the consumer’s self-concept.

Dynamics of the Crowdfunding Platform: Crowdfunding Participation Model Development and Empirical Analysis

Crowdfunding is a customer participation activity on an online platform that takes the form of financial support for a target project. Despite its importance in both research and practice, the nature of a crowdfunding platform and its effect on business and society are not fully understood. Therefore, in this study, we intend to develop a conceptual model of the crowdfunding process to understand its nature and to uncover the dynamics among the creators, projects, and sponsors of the crowdfunding platform. Based on the two-sided membership platform (TSMP) framework, we develop the Crowdfunding Participation Model (CPM) to represent how creators and sponsors are linked through projects on a crowdfunding platform. We use the CPM to propose a research model that links creator motivations, project characteristics, sponsor motivations, and funding behavior. Additionally, we empirically validate the relationships by combining survey data from the creators and sponsors of a crowdfunding platform and diverse transaction data. The results of the analysis enable us to determine the important variables, relationships, and paths in the CPM.

Crowdfunding

Crowdfunding is changing how, why, and which ideas are brought into existence. With the increasing number of crowdfunded projects, it is important to understand what drives people to either create or fund these projects. To shed light on this new social phenomenon, we present a grounded theory of motivation informed by the first cross-platform qualitative study of the crowdfunding community. By performing 83 semistructured interviews, we uncover creator motivations, which include the desire to raise funds, expand awareness of work, connect with others, gain approval, maintain control, and learn; and supporter motivations, which include the desire to collect rewards, help others, support causes, and be part of a community. We also explore deterrents to crowdfunding participation, including, among creators, fear of failure, and, for supporters, lack of trust. Based on these findings, we provide three emergent design principles to inform the design of effective crowdfunding platforms and support tools.