Success Of Crowdfunding Campaigns Research Articles

Factors Influencing the Success of Crowdfunding Campaigns for Early-Stage Startups in Asia

Factors Influencing the Success of Crowdfunding Campaigns for Early-Stage Startups in Asia

Are we on the same wavelength? Interdimensional signal set and crowdfunding success

AbstractResearch SummaryUsing data from 1899 Kickstarter campaigns (2009–2019), we examine the impact of simultaneous emission of interdimensional signals of human capital and social causes on crowdfunding campaign success. We argue and demonstrate that backers respond positively to human capital signals, as reflected by prior work and entrepreneurial experiences, as they communicate the competencies of the entrepreneurs. Conversely, signaling a high level of commitment to social causes communicates competing demands, thereby reducing entrepreneurs' ability to secure funding. Moreover, when emitted jointly, interaction of these two signals negatively affects campaign success. Our theory and findings provide nuanced insights regarding simultaneously emitted interdimensional signals in crowdfunding context with a structured incentive system, thereby increasing our understanding about the ambiguous nature of bundling human capital with high social cause signals.Managerial SummaryWhen evaluating new ventures in the public sphere, potential backers simultaneously process the complex information emitted by founders (i.e., signals). These signals communicate the unobservable qualities of the founders. In this article, we investigate the independent and joint effects of two signals on crowdfunding campaign outcomes: founder's human capital and their commitment to social causes. We show that while human capital increases campaign success, a high commitment to social cause decreases this likelihood. We further demonstrate that when these two signals are emitted simultaneously, balancing issues between the signals reduce the chances of attaining campaign success in crowdfunding. These findings emphasize the importance for crowdfunding founders and campaign designers to communicate coherent and well aligned signals to ensure campaign success.

Crowdfunding: Nature, essence and conditions for the realization of innovative business projects

Aim. Formation of methodological foundations of crowdfunding, determination of conditions for realization of innovative business projects.Objectives. Clarification of terminology, functions, categories, types and features of stakeholder interaction in the process of realization of crowdfunding campaign; description of the process of realization of innovative business projects with the help of crowdfunding; analysis of foreign and Russian crowdfunding platforms, legislative base to determine the conditions of successful crowdfunding campaign of innovative business project.Methods. The research applied methods of benchmarking, comparative analysis, inductive approach to the formation of the methodological basis of crowdfunding, modeling of the process of implementation of crowdfunding campaign of investment business projects.Results. The methodological foundations of crowdfunding are presented, the functions are described, including the collection of funds, advertising and PR of the product/service produced, scaling of the business, as well as categories, types and features of stakeholder interaction in the process of realization of crowdfunding campaign. The process of realization of an innovative business project on a crowdfunding platform is divided into five stages: MVP of the innovative product, financing of the innovative project, launch of the innovative business project on the crowdfunding digital platform, control over the project realization, launch of the innovative product into production. The analysis of the Russian legislative framework revealed a number of shortcomings in the regulation of investment platforms: lack of clarifications on the regulation of activities with cryptocurrency transactions, the conduct of which is legally permitted; attracting investments is available only to legal entities and private entrepreneurs, which hinders the development of startups and does not provide opportunities for fundraising for the implementation of social projects by individuals.Conclusions. A successful crowdfunding campaign of an innovative business project can be conducted if the conditions and sequence of stages of the process under consideration are met. At the same time, the revision of the legislative base in the field of regulating the activities of investment platforms is of particular importance in the development of this area of the economy.

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.

Comparative analysis of BERT and FastText representations on crowdfunding campaign success prediction.

Crowdfunding has become a popular financing method, attracting investors, businesses, and entrepreneurs. However, many campaigns fail to secure funding, making it crucial to reduce participation risks using artificial intelligence (AI). This study investigates the effectiveness of advanced AI techniques in predicting the success of crowdfunding campaigns on Kickstarter by analyzing campaign blurbs. We compare the performance of two widely used text representation models, bidirectional encoder representations from transformers (BERT) and FastText, in conjunction with long-short term memory (LSTM) and gradient boosting machine (GBM) classifiers. Our analysis involves preprocessing campaign blurbs, extracting features using BERT and FastText, and evaluating the predictive performance of these features with LSTM and GBM models. All experimental results show that BERT representations significantly outperform FastText, with the highest accuracy of 0.745 achieved using a fine-tuned BERT model combined with LSTM. These findings highlight the importance of using deep contextual embeddings and the benefits of fine-tuning pre-trained models for domain-specific applications. The results are benchmarked against existing methods, demonstrating the superiority of our approach. This study provides valuable insights for improving predictive models in the crowdfunding domain, offering practical implications for campaign creators and investors.

Using Crowdfunding Campaigns to Examine Financial Toxicity and Logistical Burdens Facing Families of Children With Wilms Tumor

IntroductionTreatment for pediatric solid tumors is often intense and multidisciplinary and can create a substantial financial burden for families. Assessing these burdens, termed the financial toxicity of treatment, can be difficult. Using Wilms tumor as an example, we evaluated crowdfunding campaigns in an attempt to better understand the impact of economic and logistic challenges associated with pediatric solid tumor care and identify features associated with successful fundraising with this method. MethodsWe used a webscraping algorithm to identify crowdfunding campaigns on GoFundMe.com for pediatric patients with Wilms tumor in the United States. We conducted a cross-sectional analysis to describe the patients and families seeking crowdfunding support for cancer care. After fundraizing information was extracted using the webscraping algorithm, each fundraiser was verified and examined by two independent reviewers to assess demographic, qualitative, disease, and treatment variables. Successful fundraisers, defined as those meeting stated financial goals, were compared to unsuccessful campaigns to identify variables associated with successful crowdfunding campaigns. ResultsWe identified 603 children with Wilms tumor and an associated crowdfunding campaign. The median age was 4 y. The majority lived in two-parent households (68.5%). Patients mentioned siblings in 35.5% of fundraisers. While motivations for crowdfunding varied, hardships endured by families included loss of employment (52.2%), need for childcare for other children (9.8%), direct costs of care [co-payments, insurance, pharmaceuticals, out-of-pocket care costs, etc.] (80.9%), indirect costs associated with seeking care [transportation, parking, lodging, lost opportunity cost, etc.] (56.2%), and need for relocation to pursue complex cancer care (6.8%). Disease characteristics in this cohort were limited to self-reports by families. However, fundraisers mentioned disease characteristics, including tumor stage (47.6%), size (11.4%), positive nodal status (9.6%), metastatic disease (3.6%), pathology (11.8%), upstaging (4.6%), and disease recurrence (8.6%). No individually examined demographic, support, disease, or hardship-related factors varied significantly between successful and unsuccessful crowdfunding campaigns (all P > 0.05). However, successful campaigns requested less money ($11,783.25 successful versus $22,442.2 unsuccessful, <0.001), received more money ($16,409.5 successful vs 7427.4 unsuccessful, P < 0.001), and solicited larger donor numbers (170.3 successful versus 86.3 unsuccessful, P < 0.001). ConclusionsFamilies whose children undergo multimodal cancer care have significant expenses and burdens and can use crowdfunding to support their costs. Careful consideration of the financial and logistic strains associated with pediatric solid tumor treatment, including thorough analysis of crowdfunding sites, may support better understanding of nonclinical burdens, supporting therapeutic relationships and patient outcomes.

When investors meet consumers: The roles and interactions of different backers in the crowdfunding market

AbstractBy harnessing the power of the crowd, crowdfunding has changed the way startup ventures, innovation‐minded entrepreneurs, and private individuals raise capital. Reward‐based crowdfunding is an established and attractive fundraising option for entrepreneurs with creative projects, while investment‐based crowdfunding has also gained popularity thanks to the progress of related regulations. Both types of crowdfunding are drawing a growing number of startups that seek funding opportunities, although backers on different types of crowdfunding platforms exhibit distinct motivations. Understanding the behavior and interaction of different types of backers is thus critical for a startup to launch a successful crowdfunding campaign across distinct platforms.To address this issue, we conduct a field study on a popular crowdfunding platform, where each campaign offered both reward‐ and investment‐based funding. Interestingly, we find a positive relationship between investor contributions in the early stage of the campaign and the likelihood of the campaign's success. Our empirical analysis reveals that investor–consumer interaction mediates the main effect of early investor contributions. Moreover, the positive main effect is stronger when a larger amount of project‐relevant information is released and when a higher level of customization (using price discrimination or product differentiation) is offered in reward‐based funding options. These results are consistent with several robustness checks. Our findings provide relevant managerial implications for entrepreneurs and valuable insights regarding platform design.

Using machine learning approach towards successful crowdfunding prediction

Crowdfunding is a concept that emerged due to difficulties in raising funds for community business projects, social activities, micro-enterprises, and start-ups conventionally. Crowdfunding uses internet technology as a bridge between the donor and the recipient of funds so that it can reach a wider range of donors. This study aims to compare the performance of machine learning approaches in predicting crowdfunding campaign success. Three machine learning algorithms were employed to predict crowdfunding campaign success, namely logistic regression, random forest, and extreme gradient boosting (XGBoost). The dataset used in this study contains data about all projects posted on Kickstarter from January 2020 to September 2022. To improve the prediction model's performance, experiments using principal component analysis (PCA) feature reduction and log transformation were conducted. The results show that the implementation of log transformation on the dataset can increase the prediction model's performance. Meanwhile, XGBoost algorithm performs better than linear regression and random forest.

Using machine learning approach towards successful crowdfunding prediction

Crowdfunding is a concept that emerged due to difficulties in raising funds for community business projects, social activities, micro-enterprises, and start-ups conventionally. Crowdfunding uses internet technology as a bridge between the donor and the recipient of funds so that it can reach a wider range of donors. This study aims to compare the performance of machine learning approaches in predicting crowdfunding campaign success. Three machine learning algorithms were employed to predict crowdfunding campaign success, namely logistic regression, random forest, and extreme gradient boosting (XGBoost). The dataset used in this study contains data about all projects posted on Kickstarter from January 2020 to September 2022. To improve the prediction model's performance, experiments using principal component analysis (PCA) feature reduction and log transformation were conducted. The results show that the implementation of log transformation on the dataset can increase the prediction model's performance. Meanwhile, XGBoost algorithm performs better than linear regression and random forest.

Evaluation of Blockchain-Based Crowdfunding Campaign Success Factors Based on VASMA-L Criteria Weighting Method

When investing in blockchain-based crowdfunding campaigns, choosing the right one is difficult. Therefore, it is important to recognize success factors that express the value of the specific campaign. This study is aimed at determining the success factors impacting the investors’ decision to fund blockchain-based crowdfunding campaigns and ranking them according to their importance in decision-making. An online survey was employed to collect expert opinions. The modification of the visual analogue scale matrix for criteria weighting methodology called VASMA-L was presented in this study to rank the list of the predetermined factors. To reduce the uncertainties in the decision-making process and the cognitive overload of the survey respondents, all the predetermined success factors were split into two smaller groups and assessed as those that fit both traditional and blockchain-based crowdfunding models and those that are specific only to the blockchain-based crowdfunding model. The main findings disclose that the three factors with the highest VASMA weights are from the first group. This means that when selecting the specific crowdfunding campaign to invest in, investors use common factors rather than those specific to blockchain-based crowdfunding. Only investor preferences were chosen and analyzed for successful blockchain-based crowdfunding campaign investment in this research. The VASMA-L methodology might help compare several criteria groups and select the most important ones. In addition, this weighting methodology might help investors to choose the most thrilling blockchain-based crowdfunding campaigns to fund.

The dynamics of esports crowdfunding campaign success: a social exchange perspective

Esports—a professionalized, commercialized, and spectatorial form of video game competition—is a burgeoning industrial sector that has relied on entrepreneurial community support and multi-platform media distribution modalities to catalyze its growth. In particular, the esports industry is increasingly turning towards grassroots crowdfunding to gain access to financial resources that can be used to facilitate tournament prizes. However, what remains unclear is which factors contribute to grassroots esports crowdfunding campaigns’ success. We used social exchange theory to identify important social and economic attributes that may influence the outcomes of esports crowdfunding projects. For methods, we scraped crowdfunding data from Matcherino using Octoparse 8. A total of 14,497 esports crowdfunding projects were analyzed by using multiple regression analysis, as well as robustness checks that were estimated through machine learning techniques. We find that equal distribution of prize rewards, the endorsement of big brand sponsors, and genres of games significantly influence the success of esports crowdfunding. This contributes to our theoretical understanding of 1) the process of esports crowdfunding campaigns as a complex mechanism that incorporates financial incentives and social values, 2) esports as an emerging industry that is institutionalizing, 3) the heterogeneity of genre-based community, and 4) the importance of distributive justice of prize rewards for organizing grassroots esports tournaments and events. Furthermore, we discussed methodological implications regarding the use of econometrics approach and machine learning for future crowdfunding and esports research as well as managerial implications for esports entrepreneurs, esports teams and organizations, and sponsors and investors in terms of developing strategies tailored to the dynamics of esports communities.

Racial and gender disparities among highly successful medical crowdfunding campaigns

There has been growing recognition of the popularity of medical crowdfunding and research documenting how crowdfunding arises from, and contributes to, social and health inequities. While many researchers have surmised that racism could well play a role in medical crowdfunding campaign outcomes, research on these dynamics has been limited. No research to date has examined these dynamics among the most successful medical crowdfunding campaigns, focusing instead on average users’ experiences or specific patient subpopulations. This paper analyzes key characteristics and demographics of the 827 most successful medical crowdfunding campaigns captured at a point in time in 2020 on the popular site GoFundMe, creating the first demographic archetype of “viral” or highly successful campaigns. We hypothesized that this sample would skew towards whiter, younger populations, more heavily represent men, and reflect critical illnesses and accidents affecting these populations, in addition to having visually appealing, well-crafted storytelling. Analysis supported these hypotheses, showing significant levels of racial and gender disparities among campaigners. While white men had the greatest representation, Black and Asian users, and black women in particular, were highly underrepresented. Like other studies, we find evidence that racial and gender disparities persist in terms of campaign outcomes as well. Alongside this quantitative analysis, a targeted discourse analysis revealed campaign narratives and comments reinforced racist and sexist tropes of selective deservingness. These findings add to growing calls for more health research into the ways that social media technologies shape health inequities for historically marginalized and disenfranchised populations. In particular, we underscore how successful crowdfunding campaigns, as a both a means of raising funds for health and a broader site of public engagement, may deepen and normalize gendered and racialized inequities. In this way, crowdfunding can be seen as a significant technological amplifier of the fundamental social causes of health disparities.

The Success of Cancer Crowdfunding Campaigns: Project and Text Analysis.

Recent studies have analyzed the factors that contribute to variations in the success of crowdfunding campaigns for a specific cancer type; however, little is known about the influential factors among crowdfunding campaigns for multiple cancers. The purpose of this study was to examine the relationship between project features and the success of cancer crowdfunding campaigns and to determine whether text features affect campaign success for various cancers. Using cancer-related crowdfunding projects on the GoFundMe website, we transformed textual descriptions from the campaigns into structured data using natural language processing techniques. Next, we used penalized logistic regression and correlation analyses to examine the influence of project and text features on fundraising project outcomes. Finally, we examined the influence of campaign description sentiment on crowdfunding success using Linguistic Inquiry and Word Count software. Campaigns were significantly more likely to be successful if they featured a lower target amount (Goal amount, β=-1.949, z score=-82.767, P<.001) for fundraising, a higher number of previous donations, agency (vs individual) organizers, project pages containing updates, and project pages containing comments from readers. The results revealed an inverted U-shaped relationship between the length of the text and the amount of funds raised. In addition, more spelling mistakes negatively affected the funds raised (Number of spelling errors, β=-1.068, z score=-38.79, P<.001). Difficult-to-treat cancers and high-mortality cancers tend to trigger empathy from potential donors, which increases the funds raised. Gender differences were observed in the effects of emotional words in the text on the amount of funds raised. For cancers that typically occur in women, links between emotional words used and the amount of funds raised were weaker than for cancers typically occurring among men.

Quality Signaling Through Crowdfunding Pricing

Problem definition: This paper studies an entrepreneur’s pricing strategy in a reward-based crowdfunding campaign under asymmetric product quality information. We propose two signaling mechanisms and investigate how entrepreneurs can leverage their pricing strategy to signal a high-quality project. Academic/practical relevance: This problem is relevant to practice, as asymmetric quality information is a significant concern in reward-based crowdfunding. High-quality entrepreneurs seek credible mechanisms to signal the quality of projects to customers. Methodology: We develop a stylized game-theoretic signaling model with funding and regular selling periods that captures asymmetric quality information between an entrepreneur and customers. Results: We propose a new theory on quality signaling in crowdfunding. We show that contingent access to the regular selling market after running a successful crowdfunding campaign allows high-quality entrepreneurs to signal their quality through low funding prices (one-price signaling). A high-quality entrepreneur can increase his funding price and still signal his high-quality level if he commits to the future regular selling price (two-price signaling). We show that the distinct feature of crowdfunding, that is, the probabilistic nature of crowdfunding, plays different roles in one- and two-price signaling. It is the driving force for the separating equilibrium in one-price signaling, and in two-price signaling, it affects how the entrepreneur should manipulate his funding and regular selling prices to reduce signaling cost. Managerial implications: Entrepreneurs should be mindful of pricing in funding and regular selling periods because it could play an essential role in signaling quality information. Our findings suggest practical tools for quality signaling in crowdfunding. We also investigate when price commitment is the most beneficial for a high-quality entrepreneur, looking for potential signaling mechanisms. Funding: W. Zhou acknowledges financial support from the National Natural Science Foundation of China [Grant 72192823 and Grant 71821002]. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.1177 .

Crowdfunding as a form of financing sports projects. Example of football

Purpose – The goal of this article is to identify the possibilities of using crowdfunding in sports using football as an example. Research methodology – The article is theoretical and empirical in nature. The first part discusses the definition and process of organising crowdfunding collections and analyses selected successful crowdfunding campaigns involving local football sports club communities. A literature analysis and case study method were used and a SWOT analysis was conducted as a conclusion. The second part of the article complements the theoretical considerations in the form of a research report conducted among a group of football fans in Poland, in which their position towards crowdfunding is discussed. A diagnostic survey method was used for this purpose and a statistical analysis was carried out. The following research hypothesis was adopted: The use of crowdfunding as an alternative funding method can positively influence the development and support of football clubs, especially those in the lower leagues, by increasing the availability of funds and community involvement. The use of crowdfunding as an alternative funding method influences the development and support of football clubs by increasing the availability of funds and community engagement. Results – Based on the results of the study and the analysis of the literature, it was concluded that crowdfunding can be an effective tool to raise funds for football, but requires proper planning, community involvement, and effective communication. A good definition and understanding of the project’s goals and increased education of the fan community in crowdfunding will help convince them to support it financially. Football fans who support their favourite club financially consider crowdfunding a more effective funding method than fans who do not financially support their favourite club. In addition, we found that football fans financially supporting and not financially supporting their favourite club had a similar opinion regarding the impact of crowdfunding support on the development of small football clubs, and were similarly keen to crowdfund football projects. Originality / value / implications / recommendations – The article deals with the use of crowdfunding in football, which makes the paper original, as this sphere is still poorly covered in the literature.

The role of media, policy and regional heterogeneity in renewable energy project crowdfunding

Renewable energy public tenders require French project developers to rely on local crowdfunding to finance their projects in exchange for a mark-up on the energy selling price. In this paper, I study the effects of media-coverage and geographical restrictions on the number of participants of successful crowdfunding campaigns and their duration. I tackle this question using an internet scrapped dataset on the financing characteristics of successful renewable energy campaigns from a leading French crowdfunding platform, Lendopolis, over the 2017–2021 period. First, I find that the higher the media coverage, the larger the number of investors. I uncover that using a combination of social and traditional media attracts more investors than using a single outlet. Second, I show that an unintended policy consequence is that geographically restricted campaigns are longer and involve fewer investors. Third, I find evidence that the impact of geographical restrictions varies across regions. Regional heterogeneity in terms of income, internet connectivity, and population density affects the number of investors and the duration of the geographically restricted campaigns.

Conceptual framework of the crowdfunding success factors – Review of the academic literature

Abstract The authors’ aim is to create a conceptual framework from the academic literature dealing with the success factors of crowdfunding campaigns. The authors reviewed high-quality empirical articles written in English between 2013 and 2018, gathered from five relevant databases and Q1–Q4 journals. The results and conclusions sections of the selected articles were coded and analyzed using the rules of the qualitative content analysis methodology. The authors found success factors analyzed by top researchers and grouped them into categories and themes. This paper provides a typology of the factors contributing to the success of crowdfunding campaigns which can be used as a framework for further research. The conclusions can help project initiators in the planning and execution phases of crowdfunding campaigns while creating a new perspective about crowdfunding campaign success forecasting.

Determinants of Successful Crowdfunding Campaigns: Evidence from Russian Crowdfunding Platform Boomstarter

According to practice, about half of the projects on crowdfunding sites (based on rewards) do not collect the declared amount of funding. This is largely due to the lack of experience in running crowdfunding campaigns and ignoring important factors that are important to take into account when managing crowdfunding campaigns. Many foreign publications have studied the nature of the influence of various determinants on the success of fundraising on crowdfunding platforms, in particular, on Kickstarter, Indiegogo, Ulule, Eppela and others. As for research on Russian crowdfunding platforms, there is an extremely small number of such studies. Based on the construction of OLS regressions for 300 projects from July 2020 to May 2022 by the end date of the project from the Russian crowdfunding platform Boomstarter, we firstly obtained that such determinants as choosing a reasonable financial goal of the project, the number of sponsors, the numberof project comments and the availability of video materials about the project have a positive impact on the success of the crowd campaign. In addition, we have developed a model based on logit regression testing, which has a high predictive power. This model can be used to predict the results of a crowd campaign with given parameters.&#x0D; In further research in this area, it is possible to increase the number of observations, change the set of factors that potentially affect the success of a project’s fundraising on crowdfunding platforms, and also consider the influence of factors depending on the category of the project. A promising area of research is the analysis of social interactions between investors in the framework of crowdfunding campaigns and the identification of the nature of the dependence of the volume of collected financial resources throughout the entire project financing cycle in the Russian market.

Crowdfunding success in sustainability-oriented projects: An exploratory examination of the crowdfunding of 3D printers

Despite the significant accumulation of research on crowdfunding in general, much less attention has been paid to understanding the relationship between crowdfunding and sustainable innovations in particular. This is a significant oversight given the number of sustainability-oriented projects launched through crowdfunding platforms. Given the limited insight into what factors contribute to the success of crowdfunding sustainablity-oriented campaigns, we embarked upon an exploratory examination of this topic in the context of a sustainable innovation: 3D printers. We examined several factors that prior research had found to lead to crowdfunding success and ascertain their effectiveness in contributing to successful crowdfunding campaigns for sustainability-oriented projects. We also observed some notable institutional trends, suggesting that future research may want to shift its focus from primarly addressing variance questions, to also begin investigating more process-oriented questions in order to unpack the role and temporal ordering project creators, backers, and platforms may play in building broader ecosystems that support sustainability-oriented projects within the domain of crowdfunding.

Entrepreneurs’ Use of Impression Management within LinkedIn Profiles

In the last decade, crowdfunding has emerged as a novel yet prevailing way for new ventures to acquire capital. Successful crowdfunding campaigns are often accompanied by social networking activity by the entrepreneur. However, an entrepreneur’s ability to convey trustworthiness and generate investment interest on online social networking sites has only garnered minimal scholarly consideration. Hence, we explore how an entrepreneur can use impression management tactics online to increase investor interest. Using an experimental vignette design, we examine whether the use of smiling versus not smiling pictures and adjective enhanced headlines versus unadorned headlines on the LinkedIn platform influence both perceptions of trustworthiness and investment interest by crowdfunding investors. Results suggest that LinkedIn profile pictures with a smile (versus no smile) increase both perceptions of trustworthiness and investment interest. This study contributes to a better understanding of how impression management on social networking sites can affect online crowdfunding success.