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... CF "refers to the efforts by entrepreneurial individuals and groups -cultural, social, and forprofit -to fund their ventures by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries" (Mollick, 2014, p. 2.). Compared with other funding options (business angels or venture capital funds), CF offers some advantages but also involves some risks as the relationships established between founders and funders are mainly based on the interaction facilitated by the online environment of the platforms or other social media (Belleflamme, Lambert, & Schwienbacher, 2014;Moritz & Block, 2016). Nevertheless, the virtue of the CF as a financial source has been highlighted by the literature as a "modern phenomenon arising in the world of project financing" and one of the latest and most powerful methods to finance projects, or even business" (Hommerová, 2020, p. 144). ...
... CF is an open call to provide financial resources that takes place on an Internet-based platform and links fundraisers to funders with the aim of funding a particular campaign by typically many funders (Belleflamme, Omrani & Peitz, 2015). The most important characteristics of this new financial mechanism are: i) the process that could be initiated by a group or an individual for launching a new project of cultural, social or for profit nature; ii) the funds that are obtained from the crowd via online without financial intermediaries (Lehner, 2013;Ordanini, Miceli, Pizzetti & Parasuraman, 2011;Schwienbacher & Larralde, 2012;Belleflamme, Lambert & Schwienbacher, 2014;Ahlers, Cumming, Gunther & Schweizer, 2015;Agrawal, Catalini & Goldfarb, 2015;Gajda & Mason, 2013;Baumgardner, Neufeld, Huang, Sondhi, Mursalin & Tallha, 2017). ...
... early editions of new products or product reward) or emotional (e.g. thank-you note) (Belleflamme, Lambert & Schwienbacher, 2014;Giudici, Massimiliano & Rossi-Lamastra, 2017). The last two models are considered investment models as the investors supply funds to individuals, groups or small companies, expecting to be reimbursed after a given period, generally with interest rates, without the involvement of traditional financial intermediaries (lending model) (Guo, Zhou, Luo, Liu & Xiong, 2016). ...
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Entrepreneurial activity is important for the economic growth of nations. To promote the launch of entrepreneurial ventures it is critical the availability of funding mechanisms. Crowdfunding (CF) offers a platform that allows entrepreneurs to interact with funders and generate value through the creation of new ventures. This new tool is based on internet and information technologies that facilitate the participation of the "crowd" to fund entrepreneurial projects. Despite its importance, the availability of CF platforms and their level of market penetration varies in different countries. The aim of this study is to examine whether national culture as measured by the Hofstede's framework is associated with the level of knowledge and the predisposition to use CF. To attain this aim we used data from an online survey administered in four countries (Portugal, Brazil, Germany and North Macedonia) among well-qualified students to examine the degree of association with the cultural dimensions of Hofstede (power distance, individualism/collectivism, masculinity/femininity, uncertainty avoidance, short term/long term orientation, indulgence). The investigation draws on data for 251 respondents from the four countries. The results reveal that there are cultural differences in how individuals understand and are able to use CF. Specifically, the knowledge individuals have about CF is positively related with the countries' level of masculinity and individualism, and negatively associated with power distance and RESUMO: A atividade empreendedora é importante para o crescimento económico das nações. Para promover o lançamento de iniciativas empreendedoras é essencial a existência de mecanismos de financiamento. O crowdfunding (CF) consiste numa plataforma que permite aos empreendedores interagirem com financiadores e gerar valor através da criação de novos projetos. Esta nova ferramenta surge a partir da internet e tecnologias de informação, que facilitam a participação da multidão ("the crowd") no financiamento de projetos empreendedores. Apesar da sua importância, a disponibilidade e a penetração de plataformas de CF no mercado, diverge entre países. O objetivo deste estudo é avaliar em que medida a cultura nacional, medida através do modelo de Hofstede, se encontra associada ao nível de conhecimento e predisposição para o uso do CF. Para alcançar este objetivo, a investigação utiliza dados de um questionário on-line administrado em quatro países distintos (Portugal, Brasil, Alemanha e Macedónia do Norte) a estudantes altamente qualificados, que visa avaliar em que medida o CF se encontra associado às dimensões culturais de Hofstede (distância ao poder, masculinidade/feminilidade, aversão à incerteza, orientação a longo versus curto-prazo e indulgência). A investigação incide sobre dados obtidos através de 251 respostas fornecidas a partir dos quatro países. Os resultados indicam que existem diferenças culturais no modo como os indivíduos conhecem e usam o CF. Especificamente, o conhecimento que os indivíduos têm sobre CF está positivamente relacionado com o nível de masculinidade e de individualismo dos países, e negativamente associado às características nacionais relativas à distância ao poder e à aversão à incerteza. Por outro lado, a predisposição para o uso do CF está positivamente associada ao nível de indulgência dos países.
... The reasons might be very different, including estimation mistakes, overconfidence, emotions, etc. A growing line of theoretical research on crowdfunding and token issues focuses on the analysis of the role of these biases (Fairchild et al. 2017;Belleflamme et al. 2013Belleflamme et al. , 2014. For example, an overconfident entrepreneur can set a target of a crowdfunding campaign too high, which can ultimately affect the probability of project success. ...
... In Belleflamme et al. (2014), participants of crowdfunding campaigns enjoy community benefits. It is argued that equity-based crowdfunding should be preferred by large projects. ...
... In Belleflamme et al. (2014) 14 , a firm is facing potential funders with different demand functions. A funder's surplus from buying the product is v − p, where p is the price and v is the funder's product valuation. ...
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Entrepreneurial, innovative and small- and medium-sized firms experience difficulties with raising funds using traditional debt and equity. Consequently, they are constantly looking for new strategies of financing. The latest inventions are crowdfunding and token issues. In contrast to traditional ways of raising funds these innovations: (1) use modern technology (online transactions, blockchain, etc.) much more actively; (2) are usually quicker in reaching potential investors/funders; (3) use more active network benefits such as, for example, a large number of interactions between investors/funders and between funders and firms. These changes are so significant that some experts list them among the top business inventions of the 21st century. This article provides a review of the growing number of theoretical papers in the areas of crowdfunding and token issues, compares their findings with empirical evidence and discusses directions for future research. The research shows that a large gap exists between the theoretical literature and empirical literature.
... Des points de vue divergeant apparaissent concernant le rôle que la foule joue lors d'une collecte de financement participatif. Certains travaux appréhendent le financement participatif comme dérivant ou étant une branche du crowdsourcing (Howe, 2008 ;Belleflamme et al., 2014 ;Gerber et al., 2012 ;Gambardella, 2012) en tant que mode de mobilisation de la foule, au même titre que d'autres types de crowdsourcing ont recours à l'avis, à l'intelligence et au travail de la foule. D'autres auteurs (Pénin et al., 2013 ;Onnée et Renault, 2014 ;Brabham, 2013) Loveluck montre que l'avènement d'internet « est animé par de puissantes inclinations à contourner les hiérarchies instituées qui l'apparentent à une "société contre l'État", selon l'expression de l'anthropologue Pierre Clastres (1974) » (Loveluck, 2015, p. 238 des projets sur les plateformes pour faire tomber les « barrières » mises en place par les intermédiaires classiques : « On attend beaucoup de cette plateforme (il vient d'annoncer le lancement d'une plateforme de prêt rémunéré), parce que, que ce soit chez nous mais également auprès des nombreux entrepreneurs qu'on rencontre, parce que finalement, c'est la suite logique de ce qui se fait aujourd'hui, avec une réflexion globale qu'a déjà été très largement utilisée par mes prédécesseurs, [...], sur un élément de la société, de l'humanité, qui existe au plus profond de nous, mais qui est un petit peu camouflé malheureusement dans la société un petit peu oppressante dans laquelle on vit, avec ces grosses pyramides qui nous écrasent un peu, qui nous obligent souvent à nous mettre les uns contre les autres pour essayer de grappiller et de monter dans ces pyramides. ...
... C'est également ce que j'ai pu observer dans le cas précis d'une plateformes de don/contrepartie (Jouan, 2013). D'autres études (Belleflamme et al., 2014 ;Davidson et Poor, 2014 ;Agrawal et al., 2011Agrawal et al., , 2015 ont confirmé que les « contributeurs » sont majoritairement des membres de la famille, des amis ou des connaissances plus éloignées, ou encore des membres du réseau professionnel. ...
... Des économistes qualifient également le crowdfunding comme une « forme distincte de finance »(Belleflamme et al., 2014).131 Frenchweb, « Qui est Nicolas Lesur ? ...
Thesis
Depuis la fin des années 2000, les plateformes de financement participatif se développent en France avec la promesse d’une relation directe, désintermédiée, entre demandeurs de financement et financeurs, en facilitant l’accès aux fonds pour des porteurs de projet et en permettant aux Français de financer les projets de leur choix. Cette thèse vise à étudier ce phénomène à partir d’une enquête combinant observation ethnographique et entretiens menés auprès des différents acteurs qui se sont organisés pour faire exister et développer ce secteur d’activité. L’enquête montre que l’institutionnalisation du financement participatif en France résulte d’une action collective impliquant des professionnels du secteur, des représentants des pouvoirs publics, des partenaires de plateformes et des médias. Alors que les plateformes défendent un modèle d’auto-organisation et d’autonomie, il apparaît que le développement des plateformes n’aurait pas été possible sans l’intervention des pouvoirs publics qui ont créé un cadre juridique favorable au financement participatif, au nom d’une volonté de faire évoluer le rapport des Français à leur épargne et d’amener ces derniers à contribuer à la santé économique des entreprises dans un contexte de crise. L’enquête montre aussi que par-delà l’extrême hétérogénéité des trois modèles majoritaires de financement participatif étudiés (don/contrepartie, prêt et capital), un effort collectif est fait pour mettre en valeur les points communs et gommer l’hétérogénéité des secteurs concernés (d’un côté le monde de la création culturelle, de l’autre le monde de la finance). Les plateformes, en tant que dispositifs socio-techniques, cherchent à se présenter comme des instruments neutres qui favoriseraient un appariement naturel entre des demandeurs de fonds et des financeurs. Cette recherche montre au contraire que l’essor de ce modèle de financement est le fruit d’un travail marchand mené par les professionnels du secteur pour recruter deux types d’usagers sur leur plateforme : des demandeurs de fonds d’un côté et des financeurs de l’autre. L’enquête montre les arbitrages opérés par les plateformes entre une logique de volume et une logique de qualité. Pour réduire le risque, les plateformes mettent en place des systèmes de qualification et de sélection des projets, souvent importés de la finance traditionnelle, qui entrent en contradiction avec les discours de démocratisation de l’accès au financement. Dans leurs efforts de développement, elles cherchent aussi à nouer des relations avec les acteurs traditionnels du monde de la finance. Ce faisant elles réintroduisent de nouveaux intermédiaires qui viennent complexifier la relation entre demandeurs de fonds et financeurs.
... During the past decades, crowdfunding has emerged as an important alternative form of entrepreneurial finance. It enables entrepreneurs to seek funding for ventures, products, services, and projects through aggregating monetary contributions from a relatively large number of individuals (crowd or funders) via Web 2.0-enabled social and e-commerce platforms (Belleflamme et al., 2014;Mollick, 2014). These platforms enable initiators to bypass and/or complement traditional market capital funding centered on banking finance and venture capital markets, thereby removing barriers to accessing social networks for economic, social, and cultural projects and services that might not otherwise have had access to capital (Bruton et al., 2013;Langley & Leyshon, 2017). ...
... Along with the rapid growth of the crowdfunding industry, there has been a proliferation of academic research focusing on this new source of entrepreneurial finance (for reviews, see Jovanović, 2019;Landström et al., 2019). Many of the early studies on crowdfunding were descriptive in nature, focusing on explaining how crowdfunding platforms work (Lambert & Schwienbacher, 2010;Schwienbacher & Larralde, 2012;Tomczak & Brem, 2013;Younkin & Kashkooli, 2016), what motivates fund seekers and funders participate in crowdfunding (Cholakova & Clarysse, 2015;Gerber et al., 2012), and distinguishing between different crowdfunding models (i.e., reward-based, donation-based, debt-based, and equity crowdfunding (Belleflamme et al., 2014;Belleflamme et al., 2015;Tomczak & Brem, 2013). Apart from these studies explaining the crowdfunding phenomenon, another major research stream sought to identify campaign-, fund-seeker-, platform-, and funder-related factors that facilitate fundraising success, (for excellent reviews see Butticè et al., 2018;Hoegen et al., 2018;Kaartemo, 2017;Shneor & Vik, 2020). ...
Article
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Indigenous entrepreneurship is a process of drawing value from community-based resources (people, land, capabilities, culture, etc.) and contributing value back that is responsive to a community’s particular set of socioeconomic conditions (Colbourne, 2017a; Jack & Anderson, 2002; Kenney & Goe, 2004: 699). The advent of crowdfunding pointed to the potential of digital platforms to facilitate socioeconomic change through ameliorating disparities in access to entrepreneurial financing for marginalized communities. Thus, crowdfunding represents an opportunity for Indigenous peoples to access capital; showcase their ventures; and assert their right to design, develop, and maintain Indigenous-centric institutions. To investigate the emancipatory potential of Indigenous crowdfunding campaigns, we conducted a non-participatory netnographic explorative study that analyses over 1300 Indigenous campaigns launched between 2010 and 2020. Based on our findings, we develop a typology of Indigenous emancipatory crowdfunding across four orientations: (i) commercial, (ii) cultural, (iii) community, and (iv) activist campaigns.
... Recently, crowdfunding has emerged as a new alternative to intermediated finance. As described by Belleflamme et al. (2014) and Mollick (2014), crowdfunding platforms have allowed entrepreneurs to bypass the specialized intermediaries and directly "tap the crowd" themselves, giving a large population of individual investors the ability to make small investments directly in entrepreneurial projects. Before the emergence of crowdfunding, Short et al. (2017) explain how the time and costs of soliciting small amounts of funds from a large number of investors effectively prohibited entrepreneurs from this type of direct financing. ...
... Our paper is related to a fairly new, but rapidly growing theoretical literature on the economics of crowdfunding. In an early study, Belleflamme et al. (2014) examine a model in which a firm uses either rewards-based or equity crowdfunding to raise capital for a project. The external investors plan to purchase the final product and the ex post demand is known to the firm. ...
Article
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In this paper, we consider a two-period model where individual investors supply funds to entrepreneurs either indirectly, through a financial intermediary, or directly, using equity crowdfunding. The entrepreneurs vary in terms of the quality of their business projects and ex ante, both the investors and intermediaries are imperfectly informed about their types. The main trade off between the two forms of investment is that crowdfunding is assumed to involve lower costs and higher risk relative to how intermediaries invest their funds. Given this framework, we study investor behavior and find that at intermediate levels of risk for the crowdfunding investment, investors elect to utilize both crowdfunding and financial intermediation in equilibrium. Furthermore, we find that when transaction costs of investment are high, as can be the case with opaque types of small business ventures, this increases the incidence of crowdfunding as the optimal form of investment.
... For example, equity-based crowdfunding and its related forms (for reviews, see Block et al., 2021;Lambert, 2022;Mochkabadi and Volkmann, 2020;Moritz and Block, 2016) have partially eliminated Venture Capitalists (VCs) from more traditional venture financing, which has substantially increased the potential return on investment that investors receive, 1 and it has also expanded the supply-side market for venture financing to previously underserved individual investors. The crowdfunding revolution continues to have a dramatic impact on how ventures raise financing, and it also challenges classic scholarly paradigms in the entrepreneurial finance literature, which resulted in some of the most impactful research in economics and management of the last decade (e.g., Ahlers et al., 2015;Belleflamme et al., 2014;Mollick, 2014). ...
Article
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How efficient is Decentralized Finance (DeFi)? To answer this question, we study the efficiencyand the role of intermediation in a large DeFi segment, namely, the market for Initial Coin Offer-ings (ICOs). In particular, we advance a search-related theory of DeFi, in which search frictionspartly offset the efficiency gains from reduced transaction costs thanks to blockchain technologyand smart contracts. The intensity of search, i.e. the process of identifying valuable projects, isincreasing in market granularity. Blockchain technology increases market granularity throughlower entry barriers. Lower-end entrants, however, increase aggregate search intensity but lacksearch skills. The resulting search-related inefficiency creates a niche for DeFi intermediaries.Consistent with this theory, our findings suggest that DeFi intermediaries reduce search frictionsand extract economic rents for their services. Relative to the Walrasian equilibrium, DeFi is rela-tively inefficient, and search frictions reduce the welfare for society almost by half. The evidenceindicates that perfectly decentralized finance markets would not be optimal for society.
... To do so, entrepreneurs often tap into local entrepreneurial ecosystems (LEEs) which are typically constituted by co-located services (e.g., incubators, universities, venture capitalists) and communities of firms and professionals that jointly provide critical resources and facilitate market access for entrepreneurial ventures (Audretsch et al., 2012;Autio et al., 2014;Spigel, 2017). In addition, entrepreneurs make increasing use of digital platforms, such as crowdfunding, to facilitate the financing and marketing of new ventures (Belleflamme et al., 2013;Short et al. 2017;Wald et al., 2019). As a result, local ecosystems and digital platforms, such as crowdfunding, have become increasingly interconnected (Autio et al., 2017). ...
Article
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Entrepreneurs increasingly tap into both spatial and digital resource environments to mobilize critical resources in support of new ventures. Yet we know surprisingly little about how entrepreneurs make joint use of these environments. Linking the recent debate on spatial and digital affordances to the resource mobilization literature, this study examines how entrepreneurs mobilize critical resources from local ecosystems and the crowdfunding platform Kickstarter in complementary ways. We discuss two strategies of resource mobilization: (1) The circular strategy, which is mainly applied by social ventures, leverages community narratives and support for crowdfunding campaigns to strengthen and expand the very community support the campaigns are based on. (2) The cumulative strategy, which is mainly applied by commercial high-tech ventures, mobilizes the symbolic value of local institutional ties to attract crowdfunding backers, and uses crowdfunding success to attract new resource-holders in local ecosystems. Our findings contribute to research on entrepreneurial resource mobilization and our understanding of the interplay of spatial and digital affordances.
... In recent years, artists have increasingly explored alternative and crowd-based approaches for funding their projects (Boeuf et al., 2014;Dalla Chiesa, 2021;Mendes-da-Silva et al., 2016;Regner, 2021). Through crowdfunding, projects are financed mainly by private investors (Belleflamme et al., 2014). The financing volume is usually achieved due to many investors who provide a comparably small amount of capital (Agrawal et al., 2011;Elkins & Fry, 2021;Mendes-Da-Silva et al., 2016;Regner, 2021). ...
Article
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Artists make vital contributions to our society and lay the foundations for billiondollar industries. However, these artists consistently struggle to acquire sufficient funding for their projects and their livelihood. New technology-supported possibilities for funding artists and their projects have emerged in recent years. Initial Coin Offering (ICO) is a novel form of reward-based tokenized crowdfunding. Although ICOs are promising as a way to fund artistic projects, they lack widespread adoption in the creative and cultural industry (CCI). Based on 35 qualitative in-depth interviews, we identify four barriers that hinder the funding of artistic projects through ICOs: legal shortcomings, investment restrictions, lack of consumer interest, and intermediaries’ resistance. Our research contributes to cultural finance and funding literature by disclosing barriers that impede a promising form of financing artistic projects. Further, we outline possible solutions to overcome them. We also contribute to the research about ICOs by showing that rather than reducing investment risks, these offerings merely shift them.
... Decentralized Finance (DeFi) builds on blockchain technology to disintermediate, inter alia, entrepreneurial finance markets (Chen and Bellavitis, 2020). The trend toward disintermediation in entrepreneurial finance has started with the onset of equity-based crowdfunding platforms over a decade ago (e.g., Ahlers et al., 2015;Belleflamme et al., 2014;Mollick, 2014). The promise of disintermediation is that entrepreneurs and investors get to enjoy the transaction surplus exclusively, without the need to remunerate an intermediary. ...
Preprint
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Crypto Funds (CFs) represent a novel investor type in entrepreneurial finance. CFs intermediate Decentralized Finance (DeFi) markets by pooling contributions from crowd-investors and investing in tokenized startups, combining sophisticated venture-and hedge-style investment strategies. We compile a unique dataset combining token-based crowdfunding (or Initial Coin Offerings, ICOs) data with proprietary performance data of CFs. CF-backed startup ventures obtain higher ICO valuations, outperform their peers in the long run, and benefit from token price appreciation around CF investment disclosure in the secondary market. Moreover, CFs beat the market by roughly 2.5% per month. Their outperformance is persistent, suggesting that CFs deliver abnormal returns because of skill, rather than luck. These performance effects for CFs and CF-backed startups are driven by a fund's investor network centrality. Overall, our study paves the way for research on what some refer to as the "crypto fund revolution" in entrepreneurial finance.
... Decentralized Finance (DeFi) builds on blockchain technology to disintermediate, inter alia, entrepreneurial finance markets (Chen and Bellavitis, 2020). The trend toward disintermediation in entrepreneurial finance has started with the onset of equity-based crowdfunding platforms over a decade ago (e.g., Ahlers et al., 2015;Belleflamme et al., 2014;Mollick, 2014). The promise of disintermediation is that entrepreneurs and investors get to enjoy the transaction surplus exclusively, without the need to remunerate an intermediary. ...
Article
Full-text available
... To raise money through crowdfunding, entrepreneurs must develop narratives that convey key information about themselves and their venture to individuals interested in potentially backing the campaign (Anglin, Wolfe, et al., 2018). Ventures that seek crowdfunding are often in the earliest stages of formation, with many not yet engaged in any form of operation (Kuppuswamy & Bayus, 2018) nor able to offer much verifiable objective information from which backers can base funding decisions (Belleflamme et al., 2014). For these early-stage ventures, narratives are vital to ensuring funding goals are met (Davis et al., 2017). ...
Article
Entrepreneurship scholars argue that effective storytelling is critical to the fundraising process, yet scholars rarely examine how the inclusion of core story elements in resource appeals such as characters, plot, or setting impacts fundraising effectiveness. Drawing from narrative theory and research on narrative analysis, we examine how the inclusion of fundamental story elements impacts fundraising in 359 crowdfunding campaigns. We leverage a fuzzy set qualitative comparative analysis to provide a holistic exploration of how story elements shape funding and reveal five storytelling configurations that yield superior funding performance. We then unpack the theoretical and practical implications of our findings to provide a deeper understanding of storytelling in resource acquisition.
... 2. Literature review 2.1 Existing studies on donation-based crowdfunding The concept of crowdfunding comes from the broader concept of crowdsourcing, which is to use the crowd to obtain ideas, feedback and solutions to develop corporate activities Paths to medical crowdfunding performance (Belleflamme et al., 2014). Generally, there are four types of crowdfunding, namely, reward-based, loan-based, equity-based and donation-based crowdfunding (Vismara, 2019). ...
Article
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Purpose With the increasing use of crowdfunding platforms in raising funds, it has become an important and oft-researched topic to analyze the critical factors associated with successful or failed crowdfunding. However, as a major subject of crowdfunding, medical crowdfunding has received much less scholarly attention. The purpose of this paper is to explore how contingency factors combine and casually connect in determining the success or failure of medical crowdfunding projects based on signal theory. Design/methodology/approach The paper adopts the crisp-set qualitative comparative analysis to analyze the causal configurations of 200 projects posted on a leading medical crowdfunding platform in China “Tencent Donation.” Five anecdotal conditions that could have an impact on the outcome of medical crowdfunding campions were identified. Three relate to the project (funding duration, number of images and number of updates) and two relate to the funding participants (type of suffer and type of fund-raiser). Findings The results show that diversified configurations of the aforementioned conditions are found (six configurations for successful medical crowdfunding projects and four configurations for failed ones). Originality/value Despite the fact that there are a considerably large number of medical crowdfunding projects, relatively few researches have been conducted to investigate configurational paths to medical crowdfunding success and failure. It is found that there are certain combinations of conditions that are clearly superior to other configurations in explaining the observed outcomes.
... For example, equity-based crowdfunding and its related forms (for reviews, see Block et al., 2021;Lambert, 2022;Mochkabadi and Volkmann, 2020;Moritz and Block, 2016) have partially eliminated Venture Capitalists (VCs) from more traditional venture financing, which has substantially increased the potential return on investment that investors receive, 1 and it has also expanded the supply-side market for venture financing to previously underserved individual investors. The crowdfunding revolution continues to have a dramatic impact on how ventures raise financing, and it also challenges classic scholarly paradigms in the entrepreneurial finance literature, which resulted in some of the most impactful research in economics and management of the last decade (e.g., Ahlers et al., 2015;Belleflamme et al., 2014;Mollick, 2014). ...
Preprint
Full-text available
How efficient is Decentralized Finance (DeFi)? To answer this question, we study the efficiency and the role of intermediation in a large DeFi segment, namely, the market for Initial Coin Offerings (ICOs). In particular, we advance a search-related theory of DeFi, in which search frictions partly offset the efficiency gains from reduced transaction costs thanks to blockchain technology and smart contracts. The intensity of search, i.e. the process of identifying valuable projects, is increasing in market granularity. Blockchain technology increases market granularity through lower entry barriers. Lower-end entrants, however, increase aggregate search intensity but lack search skills. The resulting search-related inefficiency creates a niche for DeFi intermediaries. Consistent with this theory, our findings suggest that DeFi intermediaries reduce search frictions and extract economic rents for their services. Relative to the Walrasian equilibrium, DeFi is relatively inefficient, and search frictions reduce the welfare for society almost by half. The evidence indicates that perfectly decentralized finance markets would not be optimal for society.
... Recently, several other typologies have been envisaged, such as conventional funding-based enterprises/crowd-based enterprises, which use sharing and pooling of resources (Belleflamme et al., 2014), and enterprises with either an internal (Savall et al., 2017) or external (Hoogendoorn et al., 2019) environmental orientation. ...
Article
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PURPOSE: This work aims to assess the impact of entrepreneurial typologies on enterprise performance in line with a hidden cost approach. METHODOLOGY: To achieve this objective, a Multivariate General Linear Model (MGLM) was employed as it allowed the most impacting variables and modalities about the relationship between entrepreneurial typologies and enterprise performance to be highlighted. FINDINGS: The findings show that the variables with significant impact on enterprise performance in terms of hidden costs are enterprise size (small business-large enterprise) and activity sector (manufacturing firm-service firm). The performance variables most impacted are reconciliations between social-economic, structures-behaviours and material-immaterial. As for the modalities with significant impact on enterprise performance in terms of hidden costs, they are small business, non-hybrid enterprise and a combination of small and manufacturing firms. ORIGINALITY: The originality of this work lies in the fact that it is rarely discussed in social sciences, insofar as it deals with a topic establishing the relationship between entrepreneurship and hidden costs via an MGLM. This work is also original since it does not establish the typologies of entrepreneurship in terms of entrepreneurs as is the case with the majority of works on entrepreneurship, but presents them in terms of enterprise typologies.
... The investment-based form of crowdfunding is closely tied to FinTechs acting as entrepreneurs able to set up a business bypassing standard financial intermediaries and avoiding expensive registration requirements. They may, for instance, avoid complicated regulation requirements and reduce transaction costs, while setting up services based on pre-ordering or profit sharing (equity crowdfunding) (Belleflamme et al., 2014). Wei and Lin (2016) also describe how entrepreneurial FinTechs draw on the market mechanisms of P2P (Peer-to-Peer) lending between platform-mandated posted prices and contract interest. ...
... Decentralized Finance (DeFi) builds on blockchain technology to disintermediate, inter alia, entrepreneurial finance markets (Chen and Bellavitis, 2020). The trend toward disintermediation in entrepreneurial finance has started with the onset of equity-based crowdfunding platforms over a decade ago (e.g., Ahlers et al., 2015;Belleflamme et al., 2014;Mollick, 2014). The promise of disintermediation is that entrepreneurs and investors get to enjoy the transaction surplus exclusively, without the need to remunerate an intermediary. ...
Preprint
Full-text available
Crypto Funds (CFs) represent a novel investor type in entrepreneurial finance. CFs intermediate Decentralized Finance (DeFi) markets by pooling contributions from crowd-investors and investing in tokenized startups, combining sophisticated venture-and hedge-style investment strategies. We compile a unique dataset combining token-based crowdfunding (or Initial Coin Offerings, ICOs) data with proprietary performance data of CFs. CF-backed startup ventures obtain higher ICO valuations, outperform their peers in the long run, and benefit from token price appreciation around CF investment disclosure in the secondary market. Moreover, CFs beat the market by roughly 2.5% per month. Their outperformance is persistent, suggesting that CFs deliver abnormal returns because of skill, rather than luck. These performance effects for CFs and CF-backed startups are driven by a fund's investor network centrality. Overall, our study paves the way for research on what some refer to as the "crypto fund revolution" in entrepreneurial finance.
... On the other side, Tokens are not native to a specific Blockchain but built or added on top of one, and represent various Assets. Good examples of Blockchain could be "ownership stakes in profit-sharing crowdfunding campaigns" (Belleflamme, Lambert, & Schwienbacher, 2014) or even a way of raising funds by tokenising projects (a process called "ICO", similar to crowdfunding/IPO, but by selling shares of the company in the form of tokens to raise funds) (Ahluwalia, V.Mahto, & Guerrero, 2020). ...
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Blockchain technology is developing fast. It is gaining momentum among individuals, businesses, institutions and governments, notably with its most famous application-Cryptocurrencies. However, that is only a small part of what Blockchain can do. This study aims at exploring Tokenisation, an under-studied application of Blockchain technology. More specifically, it intends to combine three key notions to understand how they interact with each other and influence one another: Tokenisation, Entrepreneurial Opportunities and Business Model Innovation. Eventually, a new model is developed, to understand the theoretical and practical impacts of Blockchain and Tokenisation on business.
... Entrepreneurs use equity-based crowdfunding to urge others like minded backers to fund their projects in exchange for a share of equity securities (Belleflamme et al., 2014). In this case, the backers purchase shares of the business involved in the campaign, so becoming equity stakeholders with the intention of profit sharing in the future (Kraus et al., 2016). ...
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Crowdfunding in Africa is unique due to the unstable but budding macro-environment that enables offline backer contribution that fosters project success. This paper explores the reward-based crowdfunding macro-environment factors that motivate and demotivate backer contribution towards crowdfunding with a focus on Information Communication Technology Infrastructure, Social Capital, and Backer Identity fostered by the Geographical Location. We also offer solutions for improving rewards-based crowdfunding in Africa to ensure social and economic sustainability. The results of our predictive analysis reflect that creativity-oriented projects are the project categories with the highest success rate in Africa. The findings of this paper also shed light on the fact that the success of crowdfunding projects in Sub-Saharan Africa hinges on a type of hybrid model involving the "offline" community of backers.
... Given the challenges that entrepreneurs face in acquiring financial capital, crowdfunding has emerged as a viable way to seek resources for a project or venture (Belleflamme et al. 2014, Schwienbacher and Larralde 2010. Since its inception, crowdfunding has helped a large number of new ventures acquire the funds necessary to launch businesses and fulfill social visions . ...
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Crowdfunding platforms are characterized by an uneven distribution of quality and resources. Some projects achieve outstanding and exceptional performance. Those projects, which we define as “blockbuster projects,” are believed to have a considerable impact on crowdfunding platforms, especially on other concurrent projects. There are two plausible yet opposing predictions: they may exhibit both a negative effect by monopolizing backer attention and resources and a positive effect by increasing the activeness of backer side. This tension could be further complicated, considering that blockbusters are inherently heterogeneous, which could result in different inter-relations with other concurrent projects. To fully understand this tension, this study examines the effects of blockbuster projects on the overall performance of concurrent projects on the platform and the nuances of such effects for different inter-relations between blockbusters and other projects. Drawing on the cross-side network effects literature and integrating insights from the unique features of crowdfunding, we develop a theoretical framework that highlights the multidimensional view of blockbuster effects: we propose that blockbuster projects have an overall positive effect on the performance of concurrent projects (overall effect), and such positive effect is stronger for related blockbusters (local effect) and blockbusters emerging before (temporal effect). Using data from a leading reward-based crowdfunding platform, the proposed hypotheses are tested and largely supported. Additional analyses, based on off-platform data and backer data, verify the mechanism driving the blockbuster effects: blockbusters increase the popularity of the platform, whereby backers participating in the blockbusters tend to develop positive impressions and heightened expectations, so that they are likely to participate in other concurrent projects. This study contributes to the crowdfunding literature on interactions among projects, the literature on distinctive agents in online markets, and the cross-side network effects literature. We also discuss practical implications for project creators and platform operators.
... Selon Onnée et Renault (2014), le financement participatif comporte des traits caractéristiques : (a) le financement participatif met en relation un porteur de projet qui demande à des contributeurs (la foule) de financer un projet (ou des actions déjà engagées) ; (b) le projet peut être de nature commerciale (ou non), sociale, créative ou territoriale, de petite ou moyenne taille ; (c) les versements peuvent s'apparenter à une donation ou venir en échange d'une contrepartie qui peut prendre la forme d'une récompense ou d'une participation aux bénéfices qu'engendrerait le projet financé (Belleflamme et al., 2014) ; (d) la collecte des fonds se fait principalement via Internet, à travers un site créé par le porteur de projet ou, plus généralement, par l'intermédiaire d'une plateforme spécialisée. En définitive, Onnée et Renault (2013) proposent la définition suivante du financement participatif, regroupant les différentes caractéristiques : le financement participatif « consiste, pour un porteur de projet (quel que soit son statut : particulier, organisation marchande ou non marchande, etc.), à avoir recours aux services d'une plateforme de financement (généraliste ou spécialisée) afin de proposer un projet (finalisé ou non) auprès d'une communauté article en prépublication -innovations 2022 IX Le financement participatif est-il l'objet d'un biais domestique ? ...
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La littérature rappelle régulièrement l’intérêt des citoyens à financer des porteurs de projet. Lorsque ces contributeurs viennent à financer des projets via des plateformes de financement participatif, ils bénéficient, d’après la littérature, d’une asymétrie d’information réduite, d’un coût d’information proche de zéro et d’un accès à une myriade de projets. La théorie financière définit un biais local selon lequel les investisseurs préfèrent détenir des titres géographiquement proches. La théorie moderne du portefeuille de Markowitz (1952) considère cette situation comme une anomalie décisionnelle. Inversement, les investisseurs pourraient s’engager rationnellement dans des entreprises locales s’ils percevaient des rendements supérieurs à la moyenne, si la proximité géographique leur permettait d’obtenir des informations privilégiées sur l’entreprise (et ce faisant de réduire l’asymétrie d’information) ou les rendait plus à même d’exercer un droit de contrôle. À travers notre recherche sur une microbrasserie locale rochelaise, nous étudions le rôle du biais local et domestique (cercle familial et amical) dans les choix de financement participatif.
... Gerber et al., 2012), fundraising performance (e.g. Belleflamme et al., 2014) and project implementation (e.g. Mollick, 2014). ...
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Purpose The purpose of this paper is to investigate funders' decisions in supporting reward-based crowdfunding (RBCF) in the creative industries by providing insights into the role of trust in the decision-making process of funders. In doing so, the authors examine how trust is developed through online interaction. Design/methodology/approach Data were collected from interviews and participation at short-term immersive events and gatherings. In addition, data were gathered from online discussions and social media platforms related to RBCF campaign. Qualitative analysis was performed to offer a deeper understanding of funder decision-making processes. Findings New insights were revealed into funder decision-making processes. Using foraging practices, funders participating in RBCF campaigns build trust before framing their final funding judgments. The paper’s findings highlight the interplay of organizational competency with previously uncharted relational dimensions associated with funder decision-making processes. The authors also revealed how nascent and experienced funders differ in their evaluation of risk. Originality/value This study offers an understanding of funder decision-making processes in creative RBCF campaigns. Their support of RBCF campaigns in the creative industries can present some potential risks. Further investigation is still required to reveal the funder's decision-making process. By looking at the roles of trust, the authors provide a conceptualization of competence and the relational dimension of trust, and how trust is developed as a means for mitigating risk.
... Belonging to the FinTech revolution, crowdfunding (CF) is a comprehensive term used to describe a new form of funding projects, companies or ideas by raising many small amounts of capital from a large number of people, typically via online platforms (Ahlers et al., 2015;Cicchiello, 2020). This novel form of financial intermediation makes it easier for those seeking funding (whether individuals or companies) to reach a high number of potential investors, who receive some form of physical or moral reward in proportion to the invested funds (for a detailed description, see Belleflamme et al., 2014). Beyond traditional forms of financing, crowdfunding has recently emerged as a new player in entrepreneurial finance (Block et al., 2018;Cicchiello & Leone, 2020), significantly reducing the funding gap for cultural and creative firms that make an important contribution in Europe in economic and social terms (Hutter & Throsby, 2008;Klamer, 1996). ...
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The trend towards digitalisation and technological innovation has reshaped the cultural and creative industries (CCIs) by changing the existing funding models and structures. The aim of this article is to explore the impact of cultural dimensions and policies on the adoption of reward-based crowdfunding as a new form of finance for firms in the CCIs in 12 different European countries during the 2015–2019 period. Our results show that national cultural dimensions and policies significantly affect the demand for cultural and creative crowdfunding. Specifically, the adoption of crowdfunding is broader in individualistic countries and in societies characterised by higher uncertainty avoidance, indulgence, short-term orientation, and lower levels of discrimination between genders. Furthermore, we find that the liberal welfare state model, characterised by limited government interference, market orientation, privatisation and a focus on self-responsibility, and the Southern European welfare model, based on a weak and inefficient state, increase the adoption of crowdfunding in the CCIs. The presence of a central ministry with cultural competence also increases the adoption of crowdfunding in the CCIs. Our findings show a U-shaped relationship between European grants and the demand for crowdfunding, mainly driven by a high or low European involvement within these sectors. We also identify a moderation effect of EU grants on the relationship between cultural dimensions and crowdfunding adoption, suggesting that the magnitude of this relationship depends on the amount of EU grants awarded in a specific country. As a robustness check, we run a set of Poisson regressions with correlated random effects (CREs), confirming our main results.
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Digital patronage is an emergent revenue model in which fans provide recurring financial support to a content creator, as exemplified through platforms like Twitch and Patreon. Whereas previous research has investigated creator-supporter relationships, the current study investigates creators’ multi-platform practices through in-depth interviews. We build on trends in creative labor studies and communication to examine how creators perceive Patreon and integrate it into their existing workflow. This study’s findings contribute to a better understanding of the role of digital patronage within the broader ecosystem of creative labor platforms.
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Crowdfunding projects on a platform could be relevant, such as those adopting similar technologies or based on similar ideas. Such connections are important for new projects since potential backers may make funding decisions by referencing existing projects, especially in the technology entrepreneurship context where technological development and change rely on collective innovation. Still, we know little about the impact of existing projects. Applying network externality theory, this study extended the source of that inter-project impact to existing similar projects and explored the mechanisms through which they affect the focal project's performance. We proposed that they may affect the focal one from three features, namely the number, performance, and effort of existing similar projects. Moreover, this study further explored how the interval between projects moderates these three effects. Data on 19,910 technology projects on Kickstarter from 2009 to 2018 were analyzed to test our hypotheses. This study has implications not only for research on technology entrepreneurship, crowdfunding performance, and network externality theory, but also for the crowdfunding industry.
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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.
Article
Crowdfunding platforms often display information signals about the funding activity of a project throughout the fundraising campaign. We assess the impact of two of these signals, the progress towards the project’s funding goal and the current number of backers, on project-level funding outcomes. Estimating a discrete-choice model of backer behavior and then conducting simulations under alternative information regimes, we find that, for both content-oriented (Film, Music, and Publishing) and product-oriented (Games, Technology, and Design) projects, the number of backers increases with the funding status and the backer volume. The difference between the two project types is that the number of backers decreases for content-oriented projects that have already reached their funding goal, while product-oriented projects see an increase in the number of backers after reaching the goal. Because of this, displaying the funding status information decreases (increases) the number of product (content)-oriented projects that are successfully funded.
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We contribute to institutional and social capital theory by developing a theoretical framework that suggests that informal and formal institutions are important in mitigating moral hazard in reward-based crowdfunding. We analyze a large sample of Kickstarter campaigns to test these predictions. We find a strong positive relationship between entrepreneurs' home-county social capital and their crowdfunding performance. A rule change that strengthens entrepreneurs' obligation to provide backers with the promised rewards is associated with a reduction in the effect of social capital, suggesting that formal institutions can substitute for informal ones and provides causal evidence of the effect of social capital.
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Reward-based crowdfunding has emerged in recent years as an interesting channel business that can leverage to obtain new financial resources outside the traditional ones. In this study, we explore how the creators of a reward-based crowdfunding campaign have engaged the crowd to create value and co-create knowledge to reduce both financial and market risks. Accordingly, we analyze the case study of the Kickstarter Campaign for Pathfinder Arena, a board game created by Giochi Uniti, an Italian Gaming Company. Through the lens of the social identity theory, we show that backers can generate the feedback processes needed to improve the product, when they want to belong in a community and when they want to interact with the creators. This research could have important implications for both researchers and future creators of reward-based crowdfunding projects, showing them the way to implement some instrument for involving the crowd to generate value.
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Increasingly serious environmental problems and the important role of consumers in value creation activities have made closed-loop supply chain value co-creation a popular research topic. Equity crowdfunding provides a new way for investors outside the closed-loop supply chain to cooperate with enterprises within the chain. This makes these enterprises much easier to finance and achieve environmental protection goals. However, the impact of equity crowdfunding on value co-creation in closed-loop supply chains has not been studied in depth. This study uses multi-level programming and Karush–Kuhn–Tucker conditions to construct and solve a closed-loop supply chain value co-creation model that considers equity crowdfunding, and obtain the optimal equity transfer ratio. The smartphone closed-loop supply chain is used to analyze the impact of equity crowdfunding on closed-loop supply chain value co-creation through numerical simulation and to propose an effective path to achieve a win-win situation between the economic value and environmental value of the closed-loop supply chain. The research found the following: (1) Although the manufacturer pays attention to consumer value and then its value and the excess income of equity crowdfunding investors are lost, value of the consumer, retailer, remanufacturer, and closed-loop supply chain as well as the environmental value are increased; (2) The manufacturer should actively create conditions to attract consumers to participate in value co-creation, and allocate added value with equity crowdfunding investors according to the equity transfer ratio and investment amount in time; (3) The manufacturer and equity crowdfunding investors should strengthen cooperation, jointly determine the appropriate capital demand and expected yields, and strive to increase extra income; (4) The retailer and remanufacturer should focus on increasing product sales and recycling quantity of waste products to promote the achievement of economic and environmental value.
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This study aims to shed some light on crowdfunding as a new and complementary financial source for NGOs. Qualitative data was collected through semi-structured individual interviews with the members of the study sample of NGOs operating in northern Syria, namely: "Molham Volunteering Team", "Syrian Expatriate Medical Association (SEMA)" and "International Association for Relief and Development (ONSUR)". The descriptive approach was utilized to characterize and analyse the various types of crowdfunding campaigns for the study sample. The findings indicated that Crowdfunding helps NGOs diversify their funding sources and reduce the risks associated with restricted financing, but does not cover all their needs. It also supports the marketing efforts of NGOs. Furthermore, crowdfunding allows NGOs to select projects based on a real need assessment.
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This study aims to elucidate the effects of a prosocial orientation on investments in entrepreneurial businesses through crowdfunding platforms. By drawing on the theory of empathy in social psychology, we focused on social issues that campaigns address, rather than the rhetoric and narratives used in campaigns. We applied a topic modeling method to identify types of social issues expressed in campaign documents. Furthermore, we conducted a questionnaire survey to measure the degree of empathic feeling about social issues. The results revealed that high levels of empathy to social issues do not directly lead to supporting behavior, and in particular, high levels of emotional empathy suppress the effects of cognitive empathy. Instead, backers are more likely to invest in campaigns that address social issues that evoke cognitive empathy and that are perceived to be a viable business.
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This paper provides an analysis on the emergence of new technologies in the financial industry and their application to financial and investment activities, where organizations are highly equipped with the technology needed to overshadow traditional financial institutions. In addition, three of the most important and controversial areas of this sector -challenges, regulation and collaboration- are reviewed and analyzed in depth through a systematic literature review. VOS Viewer software has been used to classify the different keywords, according to their co-citation, following clustering techniques. Thanks to the studies carried out by other researchers, it has been possible to structure clearly the distribution and trends in the financial sector, mentioning also possible future trends and gaps to be researched in the sector.
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This study employed the dynamic panel ARDL (1, 1) estimators and the static fixed effect estimation techniques to investigate how the adoption of Fintech would affect bank liquidity among the BRICS (Brazil, Russia, India, China, and South Africa) economies over the period 1995–2018. The principal component analysis was used to generate an index for Fintech. The results showed that aside from finding a consistent conclusion with previous studies that both internal and external factors drive bank liquidity, and it also confirmed the existence of a U-shaped relationship between bank liquidity and Fintech adoption. Furthermore, this suggested that BRICS banks face a dampening effect of Fintech on their liquidity risk to a certain threshold after which further adoption will significantly raise liquidity risk. The sufficient condition of the U-test also revealed a consistent conclusion. The present study recommends the optimization of the right Fintech adoption, and the improvement of the internal management of banks among the BRICS market to mitigate liquidity risk.
In this study, we explore how the religiosity and social orientation affects crowdfunding success through the lens of the moral foundation theory. Using a sample of 17,000 crowdfunding campaigns from 91 countries hosted on the LaunchGood platform over the period 2013-2020, we find that narratives expressing religious identity and social orientation increase individual contribution, attract more crowdfunders, and increase the probability of achieving fundraising goals. We also find that this positive effect is conditional to societal cultural characteristics – stronger in individualistic, masculine, long-term oriented, and indulgent societies, but weaker in high power-distance and uncertainty avoiding societies. Our findings provide new evidence for the importance of religiosity in influencing crowdfunding behavior.
Article
Equity crowdfunding is a form of capital market concerning the online offering of private company securities to a group of people for investment. Over the years, it has emerged as a valid financing alternative for sustainability‐oriented startups to conventional sources of funding to support their establishment and growth. This research explores the role that the elements of sustainable business models (SBM), which creates, delivers, and captures value for all its stakeholders without depleting the natural, economic, and social resources it relies on, can play as success discriminants of equity crowdfunding campaigns. A configuration approach was selected, and Fuzzy Set Qualitative Comparative Analysis (fsQCA) was used to investigate the causal configurations of 33 crowdfunding campaigns posted on the six most popular Italian equity crowdfunding platforms from 2014 to 2020. The analysis revealed that the SBM elements, and combinations of them, can positively affect the outcome of a campaign. Results also show that negative outcomes may be primarily due to campaign‐related features, such as high minimum investment requirements and high funding target.
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Crowdfunding is an innovative strategy for financing a new business venture from the general public instead of seeking funds in traditional ways, such as issuing bonds or bank lending. This study aims to identify the determinants affecting the success of a crowdfunding campaign and how different measurements for crowdfunding success, different crowdfunding models, and the selection of subdivided determinants influence the determinants’ impacts on crowdfunding success. We set the disciplines in the search strategy to select studies related to crowdfunding success. Ultimately, 94 empirical papers are selected to reveal the different findings for the determinants of crowdfunding success; based on this information, we construct an integrated framework for future research. There has been much research on project- and creator-related factors; however, many of these factors have inconsistent relationships with crowdfunding success due to varying measurements of success. In particular, different measurements used within the same study for determinants or crowdfunding success may also produce inconsistent results. In addition, different crowdfunding models of a project have been found to induce additional findings. Our review of the determinants of crowdfunding success and the definitions of the determinants, as well as the proposed integrated framework, can help focus future work on relatively new or unique determinants rarely addressed in the existing literature. This work provides practical implications for both theory and practice, and directions for future research.
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We examine whether firms that acquire FinTech firms experience improved post-acquisition operating performance and/or reductions in risk profile. We employ a difference-in-differences methodology to analyze changes in the acquiring firm’s operating performance and risk profile before and after an acquisition. We present strong evidence that the risk profiles of acquirers significantly improve in the post-acquisition period, but our results provide no evidence that acquirers experience improved firm operating performance following a FinTech acquisition (in terms of higher CFR or ROA).
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Sustainable development comprises two key factors: new energy and digital finance. In the case of China, given the significant investment and financing problem that confronts its new energy development plans, it remains unclear whether digital finance plays a role in the matter. In this study, panel data of 157 Chinese listed new energy companies and the digital finance index constructed by Peking University Institute of Digital Finance are analyzed via the system of generalized moment method to determine the effects of digital finance and financial constraints on a firm's financial performance. The results show that digital finance can contribute to new energy firms' financial performance, while financial constraints have a robust negative effect on the same. Further, financial constraints weaken the role of digital finance. Moreover, a heterogeneous analysis reveals the following. First, the promotion effect of digital finance is larger among small firms and non-state-owned enterprises. Second, the magnitude of the inhibition effect of financial constraints is higher among larger firms. This study elucidates the role of digital finance in promoting the development of new energy industry and bears critical policy implications.
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A model for controlling the risk of crowdfunding services (Case: Bank Mellat) Abstract: Nowadays, thanks to the emergence of new approaches in social networks, definitions and behavioral models of businesses have undergone structural changes and by peeling in some dimensions has led to redefining concepts in the field of business and that business in the context of a society and with New and innovative structures try to create sustainable development.Achieving this depends on sustainable and reliable financing in accordance with current standards in this area. This paper uses the crowdfunding structure as an alternative digital economy solution or the Manifesto of Dynamic Technological and Financial Investment, which in fact includes both dimensions, for financing and provides a model for controlling perceived imaginary risks.The main factors in creating risks for crowdfunding, including risks of the sponsor, the applicant, infrastructure and information exchange, and the components of each were identified through qualitative studies. Since banks and their subsidiaries have the necessary potential to operate in this field and are involved in some way due to new approaches in business, banks should consider integrating the "crowdfunding" structure with their services. To use this approach in their business ecosystem, so the research was conducted in the context of one of the developed banks in Iran in terms of banking services. In order to test the findings of this descriptive study, data collection method was used through a questionnaire at two levels of experts (Delphi team) and general and raw data were analyzed using statistical techniques. In order to validate the model, the structural equation method has been used. Based on the results of statistical studies, all factors had the necessary validity and financial support and infrastructure had the greatest impact on the risks of the tested model, and therefore in the implementation of the model with more sensitivity can be monitored these two factors. Keywords: crowdfunding, risk control, financial sponsor, financial applicant, information exchange
Article
The financial market offers many opportunities for projects funding. However, in its development, the financial market becomes more complex; it loses such features as flexibility and ease of fund-raising, including increased regulation. As a result, new, sometimes niche types of financial markets and instruments appear in the search for convenient channels for the movement of funds from lenders and investors to borrowers and issuers. Crowdfunding has become such a niche component of the financial market, a kind of ecosystem that consists of investors (lenders, donors), crowd platforms, and beneficiaries (project owners), among which startups occupy a special place. Accordingly, the purpose of the study was to clarify the features of crowdfunding, the factors predetermining its development, and the prospects for its development. To achieve the goal,we use s tatistical methods. We note the positive trends in the development of crowdfunding in all regions, despite that China showed a crucial decline. Thus, the average annual growth rate of crowdfunding in Europe and America has been more than 60 % since 2013. We also analyze the factors influencing crowdfunding development, particularly economic development, gross savings, the number of crowdfunding platforms, regulation. The constructed panel multivariate regression models showed that the following factors were significant: gross savings and the number of crowdfunding platforms. Finally, we have determined the features of the functioning of crowdfunding in Ukraine. Among those, the use of crowdfunding mainly for charitable financing projects, an insufficient number of platforms, an insignificant amount of funds raised, and the absence of state regulation. As a result, we have identified measures that will contribute to the development of crowdfunding in Ukraine, including the adoption of best practices of crowdfunding regulation, ensuring the transparency of its functioning, establishment of specialized crowdfunding platforms, and creating a crowdfunding culture. Keywords: funding, crowd platforms, financial technologies.
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The presentation of a prototype is pervasive when technology entrepreneurs pitch to potential resource providers. Yet, we know little about how the fidelity of a prototype—the degree to which it approximates the final product—can affect funding decisions. We study the relationship between prototype fidelity and resource acquisition of nascent technology ventures in online crowdfunding. Based on the community logic under which crowdfunding operates and the diverse motivations of funders to participate, we develop the seemingly counterintuitive idea that moderate prototype fidelity is more effective in gaining support from funders than high prototype fidelity. Across our three empirical studies, we find support for the hypothesis that prototype fidelity has an inverted U-shaped relationship with crowdfunding performance. This relationship is moderated by the materiality of the offered rewards and the quality of the prototype presentation delivered through the online interface.
Article
Purpose-The concept of donation crowdfunding has been drawing enormous attention as it connects donors worldwide in a shorter time at a relatively lower cost. This paper aims to integrate two unified theories, namely, behavioral finance and unified theory of acceptance and use of technology model, to investigate on the motivators and deterrents that influence prospective donors to adopt and use donation crowdfunding. The study also substantiates the significance of donors' behavioral biases through the moderating effect in the crowdfunding adoption process. Design/methodology/approach-The study used survey method for data collection and the data set was obtained from the sample of respondents belonging to India and Bangladesh. The proposed structural equation modeling is tested using SPSS 23.0 and AMOS 23.0. Findings-The study reveals that performance expectancy, effort expectancy, facilitating conditions and trust significantly enhance the intention to adopt donation crowdfunding. Also, biases including overconfidence bias, herding bias and regret aversion bias are found to have significant moderating effects on the relationship between the behavioral intention to adopt donation crowdfunding and use behavior. Practical implications-By investigating motivators and deterrents of the adoption of donation crowdfunding, the study renders lucrative insights for the donation crowdfunders in devising a donation fundraising campaign that motivates the prospective donors to provide financial contribution. Originality/value-The study establishes its novelty in explaining the adoption behavior of donation crowdfunding with behavioral bias moderators as a theoretical paradigm. Furthermore, the unified theory of acceptance and use of technology model is extended by introducing, the variable "trust," while studying the adoption behavior of donation crowdfunding.
Article
Purpose Although fashion products feature a short lifespan owing to rapid changes in trends, fashion is one of the most active sectors in reward-based crowdfunding. This study aims to explore what drives backers to be involved in fashion projects despite the delay in obtaining rewards. Design/methodology/approach This study used the mixed method approach by conducting a critical incident technique and two online surveys with 801 crowdfunding backers. Findings Eight dimensions of backers' motivations were identified: altruism, enjoyment, novelty, information, economic incentive, reward, recognition, and social relationship. The finding was validated by testing the relationship with external variables. Research limitations/implications The findings provide the empirical foundation for studies on reward-based crowdfunding motivation and marketing strategy development appealing to backers' specific motivations. They highlight the importance of motivations in funding fashion projects and sharing information. Originality/value This study applies three motivational orientations and reflects the characteristics of product categories of rewards.
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This research objective is to study crowdfunding donation by digital platforms for the community. The sample is made up of any individuals who have donated in the past by using an online convenience sampling random method of 638 respondents. This research is a quantitative research, collecting data through online questionnaires. The study of concepts and theories related to the research is used as the basis for the research and to collect all the requirements for analysis and processing. The questionnaire created as a tool is divided into 3 parts: 1) general information and personal information including gender, age, education, occupation and monthly income. The communication tool is a multiple choice questionnaire; 2) Factors for donation data in the past include the number of times of past donation (per year), the average donation amount per time, and whether the donation was intended to help something; 3) Reviewing funding factors, such as confidence and security, and the reason for the donation which involves data validation and analysis using a computer program. The results of the research on understanding investment by crowdfunding donation showed that some online respondents donate money for community development, accounting for 19.7 percent, while those who do not want to donate amount to 80.3 percent of all respondents. From the analysis of the relationships between demographic factors, it was found that the level of education, occupation and communication tools are associated with community crowdfunding donation on digital platforms and past donation information in the comment category is associated with community crowdfunding donation on digital platforms. Suggestions from the research show that most respondents are unsure about raising funds by crowdfunding by means of a flat in the digital age. Therefore, a picture or a short video clip should be attached when seeking donations, which will make donors more reliable.
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Low success rates have been one of the critical issues in crowdfunding. Previous studies already indicated that the project description will affects the success of the crowdfunding project. However, there is no research to explore which factors should be included in the project description for directly affecting the success of the project. The participants’ text comments have been confirmed that they might change supporters’ decisions. In most of crowdfunding related studies, they often used questionnaires survey which may have sampling bias and require a lot of manpower and time. In addition, they merely focus on music and sports fields but have not yet discussed the movie projects. Consequently, this study attempts to present a scheme to identify the key success factors, especially for project description and user comments, using text mining and data mining approaches. In our presented scheme, feature selection methods, including Decision Trees (DT), Least Absolute Shrinkage and Selection Operator (LASSO), and Back Propagation Network (BPN) pruning method are employed to select important factors from real projects in Kickstarter and Indiegogo. Then, a support vector machine (SVM) is performed to evaluate the performances of selected candidate factor subsets. Finally, we can determine the key success factors for movie crowdfunding projects. Experimental results can give the fundraisers useful suggestions for increasing the success rate of movie crowdfunding projects.
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Thoroughly revised according to classroom feedback, Industrial Organization: Markets and Strategies offers an up-to-date and rigorous presentation of modern industrial organization that blends theory with real-world applications and derives implications for firm strategy and competition policy. This comprehensive textbook acquaints readers with the most important models for understanding strategies chosen by firms with market power and shows how such firms adapt to different market environments. The second edition includes new and revised formal models and case studies. Formal models are presented in detail, and analyses are summarized in 'lessons' which highlight the main insights. Theories are complemented by numerous real-world cases that engage students and lead them to connect theories to real situations. Chapters include review questions, exercises, and suggestions for further reading to enhance the learning experience, and an accompanying website offers additional student exercises, as well as teaching slides.
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We study the fund-raising strategy of an entrepreneur when investors have private information about his project’s profitability. The entrepreneur cares about monetary profits and about the probability to obtain financing. If he contacts both venture capitalists (VCs) simultaneously, he obtains high monetary profits. If he commits to a period of exclusive negotiation with one VC, he increases the probability to obtain financing but deal terms deteriorate. The optimal negotiation strategy results from this tradeoff. We also solve for the equilibrium financial contracts and obtain implications for VCs’ portfolios and entrepreneurs’ deals.
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