Reward Crowdfunding Research Articles

Recent advances in applications of machine learning in reward crowdfunding success forecasting

Recent advances in applications of machine learning in reward crowdfunding success forecasting

The VAT Treatment of “Reward Crowdfunding”

Crowdfunding is a fast-growing phenomenon of the new digital economy. Many different fundraising models exist, including donation, reward, pre-sale, loan and equity crowdfunding. In this article, the author argues that a distinction ought to be made between reward crowdfunding and pre-sale crowdfunding. The author further discusses the VAT treatment applicable to reward crowdfunding, depending on the type of reward that is granted by the fundraiser to the backer.

Take my word for it! The role of projected certainty signaling and certainty alignment in reward crowdfunding outcomes

Crowdfunding has emerged as a pivotal mechanism for entrepreneurs and innovators to source capital directly from a diverse audience of backers. Our study analyzes the nuanced impact of projected certainty signaling on the success of crowdfunding campaigns. We argue that the degree of certainty conveyed in project descriptions has a curvilinear influence on project success. We underscore the importance of the consensus on this projected certainty being shaped by interactions between founders and backers. Our study has several implications for founders, backers, and platforms by offering valuable insights for enhancing crowdfunding strategies and interactions toward positive outcomes.

DEVELOPMENT OF ECONOMIC SUPPORTING INFRASTRUCTURE IN THE NATION'S CAPITAL: A PROPOSAL USING A CROWDFUNDING SCHEME

Objective: This research aims to provide proposals for a comprehensive policy framework and strategic plan to advance economic prosperity through infrastructure development in the New Capital Region of East Kalimantan, Indonesia. Theoretical Framework: The theory used is crowdfunding from Kirby & Worner (2014). The crowdfunding model includes social crowdfunding communities, loans/donations, and reward crowdfunding. The financial benefits of crowdfunding encompass peer-to-peer (P2P) loans and equity crowdfunding. Method: The method employed is a qualitative approach using interview discussions supported by participant observation. Twenty-two stakeholders, including policymakers and community members, participated in the study, providing diverse perspectives. The research takes place from September 16 to November 19, 2023, with the research locus in the city of IKN Nusantara. Results and Conclusions: To comprehend the short-medium-and long-term perspectives, these plans require innovative financing methodologies, such as crowdfunding, which is considered an essential element. In the short term, community involvement is targeted through SBSN, facilitating direct community participation in infrastructure funding. This medium-term strategy integrates digital platforms and blockchain technology, increasing transparency and strengthening public trust. A mixed creative financing model is recommended for public transport, aligning crowdfunding with Public-Private Partnerships. In the long term, this study highlights the growing maturity of crowdfunding and its potential positive influence on the infrastructure supporting the economy, setting a precedent that can be imitated in other regions in Indonesia. Research Implications: In line with national aspirations to achieve advanced status by 2045, this proposal supports inclusive economic growth inspired by China's expertise in optimizing domestic resources. The importance of the Open Government concept was underlined, emphasizing community involvement to reduce foreign dependence and encourage sustainable economic growth. Originality/Value: This research includes concrete actions, such as implementing Government Sharia Securities, blockchain integration, and targeted financial education campaigns, all aimed at ensuring the effectiveness and long-term success of infrastructure development in the Capital Region.

“In this together”: on the antecedents and implications of crowdfunding community identification and trust

ABSTRACT Despite references to crowdfunding as a community-embedded phenomenon, few studies explore the antecedents and implications of crowdfunding communities. This study suggests community identification and trust as two core aspects of crowdfunding communities, while aiming to identify their antecedents and implications for crowdfunding campaign information-sharing intentions and behavior. Information-sharing is a necessary condition for successful entrepreneurial fundraising when using crowdfunding. For this purpose, we use survey data collected from users of Finland’s leading reward crowdfunding website, Mesenaatti.me, while analyzing it using structural equation modelling. Our findings show that community identification and trust are both positively associated with crowdfunding contribution attitudes and with information-sharing intentions. However, only community identification is associated with information-sharing behaviors. Enjoyment, homophily, and community outcome expectations are antecedents of both community identification and trust. Tie strength and normative pressures are antecedents of community identification. Finally, information-sharing intentions mediate the effect of community trust on information-sharing behavior. We discuss explanations for these findings and their implications for crowdfunding research and practice.

The reward crowdfunding campaign management process: an engagement perspective

PurposeCrowdfunding is an increasingly popular channel for project fundraising for entrepreneurial ventures. Such efforts require fundraisers to develop and manage a crowdfunding campaign over a period of time and several stages. Thus, the authors aim to identify the stages fundraisers go through in their crowdfunding campaign process and how their engagement evolves throughout this process.Design/methodology/approachFollowing a multiple case study research design analysing six successful campaigns, the current study suggests a taxonomy of stages the fundraisers go through in their crowdfunding campaign management process while identifying the types of engagement displayed and their relative intensity at each of these stages.FindingsThe study proposes a five-stage process framework (pre-launch, launch, mid-campaign, conclusion and post-campaign), accompanied by a series of propositions outlining the relative intensity of different types of engagement throughout this process. The authors show that engagement levels appear with high intensity at pre-launch, and to a lesser degree also at the post-launch stage while showing low intensity at the stages in between them. More specifically, cognitive and behavioural engagement are most prominent at the pre- and post-launch stages. Emotional engagement is highest during the launch, mid-launch and conclusion stages. And social engagement maintains moderate levels of intensity throughout the process.Originality/valueThis study focuses on the campaign process using engagement theory, thus identifying the differing engagement patterns throughout the dynamic crowdfunding campaign management process, not just in one part.

Explaining gender differences in crowdfunding contribution intentions

Crowdfunding represents digital fundraising channels that may enhance participation of females in project fundraising. The current study aims to analyze the gender differences in effects exerted by cognitive antecedents of financial contribution intentions (CCI) in the context of reward crowdfunding. Specifically, survey data was collected in Ghana, where crowdfunding is at its infancy, and where gender inequality is socially prevalent. Overall, 403 responses are included in the analysis. Data was analyzed using structural equation modelling (SEM), while examining associations between variables in male and female samples separately. First, when using an equality of means test, we show that females exhibit significantly higher levels of CCI, perceived risk, homophily, and prosocial orientation, as well as significantly lower levels of self-efficacy. Second, when using a between-group analysis comparing unstandardized betas, we observe that: (1) self-efficacy has stronger effects on CCI in males; (2) homophily has stronger effects on CCI in females; (3) prosocial orientation's effect on CCI does not differ between genders; (4) a stronger effect of susceptibility to social influence on CCI in females is partially evident; and surprisingly, (5) perceived risk has a stronger negative effect on CCI in males. The results, possible explanations, and implications are then discussed.

Do project quality and founder information signals always matter? Evidence from equity and reward crowdfunding

AbstractThis study provides a comparative analysis of the success factors of equity and reward‐based crowdfunding. We find that information signals related to venture/project quality are important determinants of both equity‐based and reward‐based crowdfunding success. However, signals on founder information matter only for equity‐based but not for reward‐based crowdfunding. Our study exemplifies the varying role of success factors that depend on the type of crowdfunding projects and provides a basis for further research to compare different forms of crowdfunding.

The contribution of crowdfunding for philanthropy: A systematic review and framework of donation and reward crowdfunding

AbstractWhich novelties do donation‐ and reward‐based crowdfunding bring to philanthropy? Scholars interested in crowdfunding contributed to developing empirical explanations on which features impact online giving. However, the focus on theory building is limited. We developed a theoretical framework by categorizing the empirical findings reported in 198 studies, which resulted in four crowdfunding features impacting giving: (1) project creator, (2) social information, (3) rewards, and (4) project description. We explain why these features impact giving by integrating them with insights from several fields of social sciences, deriving seven giving mechanisms. We conclude that with impacting donations via crowdfunding, three giving themes exist: being affected by (1) the perceived project's quality, (2) social connections and/or (3) tangible rewards. The categorization of mechanisms for giving allows initiators to extract best practice examples for increasing the probability of successful crowdfunding projects considering the giving mechanisms.

Explaining reward crowdfunding backers' intentions and behavior

PurposeEarlier research into crowdfunding adoption has drawn on social psychology, trust, signaling and well-being theories. Despite its wide appeal and use, the technology acceptance model (TAM) has received little attention in terms of explaining the adoption of crowdfunding platforms. The current study examines the applicability of two versions of this framework: the original TAM1 and the extended TAM2 frameworks.Design/methodology/approachData were collected through a survey distributed to the users of Finland's leading reward crowdfunding website, Mesenaatti, who have backed crowdfunding campaigns previously. The authors employed structural equation modelling (SEM–lavaan package) and conducted a series of quality tests to alleviate concerns with certain biases.FindingsAnalyses of 556 observations exhibit support for all hypotheses underlying both TAM frameworks, with two exceptions. Contrary to expectations, voluntariness does not moderate the effect of subjective norms on contribution intentions, and the effect of perceived ease-of-use is primarily mediated by perceived usefulness, rather than directly influencing intentions.Originality/valueFirst, the study extends the generalizability of TAM to the context of crowdfunding and with respect to financial contribution behavior. Second, it shows that backers' perceptions of platform usefulness and ease-of-use are important antecedents of crowdfunding contribution behavior, and that the former exerts greater influence than the latter. Third, it further clarifies the influences of relevant antecedents of crowdfunding backers' contribution intentions and behaviors. Specifically, the authors show that experience only weakly moderates the influence of subjective norms on contribution intentions, and voluntariness does not moderate this association. The authors discuss explanations for these findings and their implications for research and practice.

Reward crowdfunding and the success of campaigns: exploring the role of social capital of entrepreneurs and investors

Reward crowdfunding and the success of campaigns: exploring the role of social capital of entrepreneurs and investors

ЗАСТОСУВАННЯ УПРАВЛІНСЬКИХ ТА МАРКЕТИНГОВИХ ІННОВАЦІЙНИХ ТЕХНОЛОГІЙ ДЛЯ ЗАБЕЗПЕЧЕННЯ РОЗВИТКУ ЦИФРОВОЇ ТОРГІВЛІ НА ГЛОБАЛЬНИХ РИНКАХ

The development of digital trade causes the search for new levers to ensure it. Protest, the identification of certain obstacles in the system of digital trade slows it down somewhat. Obstacles are insufficient specialization in the IT field, outdated equipment, lack of specialists, etc., to eliminate existing problems, it is necessary to attract investments. It is appropriate to consider the experience of attracting foreign and domestic investments. Consideration of the research topic made it possible to make sure that the experience of crowdfunding can act as an alternative to such involvement. The work reveals the use of innovative technologies, namely crowdfunding to ensure the development of digital trade on global markets. The purpose of the study is to reveal the features of the crowdfunding process to promote the development of digital trade in global markets. The essential understanding of crowdfunding was studied by revealing its models and their characteristics. The work focuses on understanding the features of the identified models. An attempt was made to substantiate the need for the introduction of crowdfunding models in the process of developing digital trade by revealing trading platforms for its implementation. Crowdfunding platforms consist of real estate, high technology and science, investment in products, social ideas and charity, creative initiatives, securities of small and medium-sized businesses and platforms without a strict target orientation of investments. It was found that they contribute to the implementation of ideas through the implementation of commercial, non-commercial and social projects. The platforms facilitate the expansion of trading activities to all countries, which contributes to the development of digital trade in global markets. The role of crowdfunding as an innovative technology is to use crowdfunding models to promote the development of digital commerce in global markets by using them, namely: reward crowdfunding, donation crowdfunding, loan or debt crowdfunding and equity crowdfunding to create crowdfunding. The introduction of crowdfunding will allow to solve obstacles in the system of digital trade that slow down its development in global markets.

How Can SMEs Use Crowdfunding Platforms to Internationalize? The Role of Equity and Reward Crowdfunding.

Despite the exponential growth of crowdfunding in recent years, research on the role it plays in business internationalization is still embryonal. Building on the Resource Based View (RBV) and Knowledge Based View (KBV), this study explores how SMEs can use equity crowdfunding (ECF) and reward crowdfunding (RCF) to internationalize and the related potential limitations. Using an inductive qualitative research design, based on multiple case studies of Italian SMEs, our study showed that ECF and RCF models help SMEs in acquiring the financial resources needed to internationalize and, at the same time, offer significant added value to their internationalization. Our findings support the idea that ECF and RCF play a key role in helping companies to overcome their resource limitations in regard to internationalization, not only in terms of the provision of financial resources but, above all, by compensating for any lack of knowledge on aspects relevant to the internationalization process. Furthermore, our results show the limitations of SMEs use of crowdfunding in order to internationalize (i.e., a lack of ad hoc e-commerce policies in relation to equity crowdfunding and to the regulation of the pre-ordering mechanism in the reward model). This paper concludes by discussing the theoretical and managerial contributions to the international business domain, and highlighting fruitful avenues for future studies.

On relationship types, their strength, and reward crowdfunding backer behavior

This study examines the association among relationship types, their strength, and contribution behavior in reward crowdfunding. We analyzed data on 568 relational dyads between fundraisers and backers from successful campaigns on KarolinaFund. We collected data from fundraisers and classified the relations they had with backers before the campaign, and their strength. Our findings show that pre-existing relations contribute to a greater extent than previously unknown backers. Among backers with whom relations exist prior to the campaigns, those that have stronger relations with the fundraiser make higher contributions. Strength of relations negatively moderates the association between purely private relations and contribution extent, and positively moderates the association between professional relations and contribution extent. When comparing sub-samples of early and late contributors, we find that private relations contribute to a significantly greater extent at earlier stages, and professional relations contribute to a significant lesser extent in later stages.

An Exploratory Pledging Framework of Crowdfunding for Utilities Tunnel Engineering Project

This paper gives an exploratory mathematical framework for crowdfunding pledging of utilities tunnel engineering project. For two typical types of “All-or-Nothing” and “Keep-it-All” platforms, it analyzes the crowdfunding process how to operate on the platforms for the project. There are four types of crowdfunding modes, and a utilities tunnel project can flexibly choose one or several crowdfunding types analyzed in this paper to improve project construction according to the status of the project. Debt crowdfunding should design rational interest payment mechanism and Macaulay duration, and equity crowdfunding should consider the backers may get dividend and capital revenue for a utilities tunnel project. Simulation analyses of debt crowdfunding and equity crowdfunding give some cases for project fulfillment. The founder of reward crowdfunding can give free or low price energy products to the backers, while the backers of donation crowdfunding are completely philanthropic to supply the pledged capital.

How the tone of mass media news affects pledge amounts in reward crowdfunding campaigns

ABSTRACT We study whether the tone of daily news in mass media as a proxy for market sentiment affects the typical daily pledge amount in reward crowdfunding campaigns. Based on unique data for over 350,000 pledges in reward crowdfunding campaigns from over 2,600 cities in Brazil, we find that market sentiment affects the willingness of backers to make larger pledges. Our unprecedented results reveal that good news induces larger pledges. The effect of tone on pledge amounts is inhibited by the geographic distance between the backer and entrepreneur and is reinforced by income inequality in the backer’s city.

Effective entrepreneurial narrative design in reward crowdfunding campaigns for social ventures

One of the most important challenges for social venture entrepreneurs is acquiring resources. Reward crowdfunding is considered a suitable tool for meeting the financing needs of social ventures, whose backers are particularly interested in firm ideas and core values rather than in collaterals or business plans. A strategic factor that is able to influence the outcome of crowdfunding campaigns is the entrepreneurial narrative. Very few scholars have examined the key factors that support a crowdfunding campaign, particularly those on reward-based crowdfunding platforms, and the effects of entrepreneurial narratives on investors’ decisions. Aiming to fill this research gap, this paper investigates how entrepreneurs in the technology industry describe their social ventures and projects on Eppela, an Italian reward-based crowdfunding platform. Thematic analysis was applied to detect the five following key factors of effective entrepreneurial narratives in reward-based crowdfunding campaigns for social ventures: 1) problem/need; 2) project; 3) product; 4) team; and 5) venture. Each key factor includes specific subfactors. Lexical data analysis was then performed to identify the following expected effects of the examined entrepreneurial narratives on potential investors, leading these investors to understand, trust, and approve the project proposal, and thus, finance the social venture’s project: 1) reassurance, 2) reliability, and 3) credibility. Based on these results, this study proposes an explanatory model about how to design effective entrepreneurial narratives to be presented to contribute as much as possible to the success of projects in crowdfunding platforms.

A quantitative study on crowdfunders' motivations, their sense of meaning and social welfare

PurposeIn recent years, crowdfunding has developed as a new fundraising alternative. Yet, the effects of the backing experience in reward and donation-based crowdfunding (DBCF) on well-being were researched only through qualitative practices. The current study offers a novel quantitative inquiry of the association between backing motivation and backers' well-being.Design/methodology/approachThe study is based on a uniform questionnaire distributed among 700 Israeli adults, which included questions about backing experience, sense of meaning and social welfare.FindingsThe results indicate that only intrinsic backing motivation is associated with the sense of meaning in life. Non-investment crowdfunding offers a platform for people who are intrinsically motivated to increase their sense of meaning in life. Moreover, the authors find that the tendency to back further projects is associated with backers' sense of meaning in life.Social implicationsThe findings can promote a better matching between backers' desire for living the good life and entrepreneurs' desire to reach their funding targets. Social welfare implications are discussed.Originality/valueThe linkage between backers' well-being and crowdfunding has not been explored in quantitative studies. Hence, the study offers a novel approach and some new insights on this linkage.

Skin in the game: Self-funding and reward crowdfunding success

This article focuses on entrepreneurs’ self-funding behavior in the reward crowdfunding context and its relation to crowdfunding success. Theoretically anchoring our discussion in signaling theory, we argue that self-funding sends similar information to that conveyed by quick-fix bootstrapping efforts. Accordingly, we hypothesize that self-funding behavior is positively associated with crowdfunding success as it can help alleviate uncertainties around a fundraiser’s intent and quality as perceived by prospective backers. To show this, we use a sample of 1,583 campaigns collected from Zhongchou, the largest Chinese reward-based crowdfunding platform, to test our hypotheses. Our results demonstrate that entrepreneurs' direct self-funding is positively associated with crowdfunding success. Moreover, this effect is partially mediated by the quality of campaigns’ content elements.

Reward crowdfunding campaigns: Time-to-success analysis

The time-to-success of reward crowdfunding campaigns constitutes a relevant topic that has been neglected in business literature. In this study, we employ parametric and semi-parametric models of survival analysis to identify the determining factors of the duration of success of these campaigns. Based on more than 4200 reward crowdfunding campaigns, our results are robust for controls and reveal that the campaigns that attain success most rapidly are located predominantly in cities with greater income inequality. These are cities that are characterized by lower fundraising targets and receive a larger number of pledges. In addition, our covariates indicate a non-constant influence on time-to-success during the fundraising period.