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CATCHWORD
Enterprise Crowdfunding: Foundations, Applications,
and Research Findings
Alexander Simons •Lena Franziska Kaiser •
Jan vom Brocke
Received: 15 March 2018 / Accepted: 26 June 2018 / Published online: 4 December 2018
Springer Fachmedien Wiesbaden GmbH, ein Teil von Springer Nature 2018
Keywords Enterprise crowdfunding Crowdfunding
Internal crowdfunding Organizational crowdfunding
Corporate crowdfunding
1 Introduction
Crowdfunding has become the most important approach to
online fundraising, with a global transaction value that is
expected to annually grow by nearly 30 percent from 2018
to 2022 and total roughly US$26 billion in 2022 (Statista
2018). Crowdfunding leverages the power of crowd work
to collect money for financing startups and small busi-
nesses. While most traditional funding models collect large
amounts of money from a small number of (often profes-
sional) investors, crowdfunding usually collects small
amounts of money from a large number of (often casual)
investors (e.g., Ahlers et al. 2015, p. 955; Belleflamme
et al. 2014, p. 585; Hammon and Hippner 2012, p. 165). In
only a few years, crowdfunding websites like Kickstarter
and Indiegogo have helped people worldwide acquire
funding for tens of thousands of projects and campaigns
(Niemeyer et al. 2016, p. 2800). Kickstarter alone, laun-
ched less than 10 years ago, has collected pledges that
totaled more than US$4 billion (Kickstarter 2018).
Against this backdrop, it is not surprising that estab-
lished companies have also developed an interest in
crowdfunding. For example, Indiegogo recently launched a
program called ‘‘Indiegogo Enterprise’’, which several
large companies, including Hasbro, Heineken, and Motor-
ola, have joined (http://enterprise.indiegogo.com). In
addition, companies like IBM and Siemens have imple-
mented individual crowdfunding practices within their
corporate realms (see, e.g., Hesse 2016; Muller et al. 2013).
Since companies this big have ready access to traditional
funding sources, why do they engage in crowdfunding? As
this article explains, enterprise crowdfunding differs fun-
damentally from conventional crowdfunding, as it pursues
targets other than fundraising.
Section 2characterizes crowdfunding at a general level
as a foundation for distinguishing between enterprise
crowdfunding and conventional crowdfunding. Section 3
presents examples of how BMW, Bose, IBM, and Shock
Top have used enterprise crowdfunding, and Sect. 4
reviews the extant research on enterprise crowdfunding.
Section 5synthesizes the findings from research and
practice to conceptualize and characterize enterprise
crowdfunding. Section 6presents promising topics for
future research, and Sect. 7concludes the paper.
2 Foundations
The concept and practice of crowdfunding, a specific form
of crowd work (Durward et al. 2016, p. 283), has been a
topic of interest to researchers from several domains,
including entrepreneurship and finance (Moritz and Block
2016, p. 45). A combination of the terms crowdsourcing
and funding, crowdfunding’s meaning seems intuitive, but
the definition remains elusive because a variety of crowd-
funding practices have emerged over the past few years
(Mollick 2014, p. 2), including a wide variety of crowd-
funding websites that serve considerably different purposes
Accepted after one revision by Prof. Weinhardt.
Dr. A. Simons (&)L. F. Kaiser Prof. Dr. J. vom Brocke
Institute of Information Systems, University of Liechtenstein,
Fu
¨rst-Franz-Josef-Strasse, 9490 Vaduz, Liechtenstein
e-mail: alexander.simons@uni.li
123
Bus Inf Syst Eng 61(1):113–121 (2019)
https://doi.org/10.1007/s12599-018-0568-7
(Haas et al. 2014, p. 2). Based on what investors receive for
their money on these websites, researchers have identified
four basic crowdfunding practices (e.g., Burtch et al. 2014,
p. 213): lending-based crowdfunding, which is used for
private credits whose investors usually receive interest
(see, e.g., Lin and Viswanathan 2016); equity-based
crowdfunding, which is used for business startups whose
investors usually receive revenue shares (see, e.g., Agrawal
et al. 2014); reward-based crowdfunding, which is used for
creative projects whose investors usually receive a non-
monetary reward, typically the product itself (see, e.g.,
Mollick 2014); and donation-based crowdfunding, which is
used for charitable projects whose investors usually par-
ticipate for altruistic reasons rather than tangible reward
(see, e.g., Burtch et al. 2013).
This variety of crowdfunding practices has resulted in
several definitions (Bouncken et al. 2015, p. 408), but most
definitions have in common:
1. The primary purpose of fundraising (Cho and Kim
2017, p. 313), although crowdfunding also can serve
other purposes, such as marketing (Mollick 2014, p. 3);
2. An open call for funding (Ahlers et al. 2015, p. 955),
so crowdfunding reaches out to a large and undefined
crowd (Kuppuswamy and Bayus 2018, p. 169);
3. Being Internet-based, so crowdfunding runs on inter-
mediary platforms (Haas et al. 2014) or individual
websites (Belleflamme et al. 2013).
In line with these characteristics, one of the most
widely used crowdfunding definitions is that it ‘‘involves
an open call, mostly through the Internet, for the provi-
sion of financial resources […] to support initiatives for
specific purposes’’ (Belleflamme et al. 2014, p. 588).
However, as the following sections demonstrate, enter-
prise crowdfunding does not necessarily share these
characteristics. We present examples of how companies
have used enterprise crowdfunding and review available
research findings, thereby providing a foundation on
which to conceptualize and characterize enterprise
crowdfunding and to assess its relevance to Information
Systems research.
3 Applications
3.1 Overview
Enterprise crowdfunding is the most recent term in the
crowdfunding arena, so even though several companies
have used enterprise crowdfunding in the past few years,
detailed information regarding drivers, objectives, solu-
tions, and results is available for only a few cases. Against
this backdrop, we present examples of enterprise crowd-
funding from BMW, Bose, IBM, and Shock Top. While we
identified the IBM and BMW cases based on a systematic
literature review of some of the largest electronic data-
bases, the Bose and Shock Top cases were identified based
on a structured analysis of enterprise-crowdfunding cam-
paigns on Indiegogo. The results of these analyses suggest
that enterprise crowdfunding is usually used to create,
collect, and assess ideas or to research and enter new
markets – that is, to support a variety of innovation-related
processes. The crowdfunding campaigns we selected
illustrate the diversity of purposes that enterprise crowd-
funding may serve, so they provide a good foundation on
which to base a description and conceptualization of
enterprise crowdfunding.
3.2 The Case of BMW
The German automobile-maker BMW was one of the
earliest adopters of enterprise crowdfunding. As early as
2014, BMW launched the ‘‘Mobility Experience Chal-
lenge’’ on Startnext, the largest crowdfunding website that
is presented in German. The campaign was open to all,
including customers, developers, mobility experts, and
even BMW’s employees, who were asked to propose,
describe, and evaluate innovative ideas for car apps, so the
crowdfunding campaign was an idea contest, not a funding
request (Jovanovic
´et al. 2017, pp. 1 and 10). While the
campaign resembled crowdsourcing, it leveraged the idea
of crowdfunding to improve BMW’s understanding of
customers’ needs and involve them in product develop-
ment. Participants did not pledge their own money but
received a virtual budget of €100, which they could
‘‘spend’’ on other participants’ app ideas that were sup-
posed to fall into one of three categories: ‘‘car’’, ‘‘travel’’,
or ‘‘search and scout’’ (Boeriu 2014). BMW provided three
sample ideas to illustrate what ideas should look like, and
the idea-submission phase lasted 8 weeks, while the
‘‘funding’’ phase lasted 4 weeks (Jovanovic
´et al. 2017,
p. 5). BMW employee experts evaluated the ten app ideas
that received most of the crowd’s virtual funds, and three
were awarded prize money totaling US$2500 (Boeriu
2014). The three winners were then invited to present their
ideas to BMW’s App Decision Board.
By the time the campaign ended, 591 people had con-
tributed by either proposing or evaluating app ideas; thirty-
five participants contributed 44 app ideas, and 602 votes
were placed (Jovanovic
´et al. 2017, p. 6). The experts did
not select the three ideas that received the most funding but
chose among the top ten apps that helped users learn about
driving (‘‘Drive Wise’’), find assistance in an emergency
(‘‘Emergency-App’’), and connect mobile devices with car-
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114 A. Simons et al.: Enterprise Crowdfunding, Bus Inf Syst Eng 61(1):113–121 (2019)
navigation systems (‘‘RouteSync’’).
1
Bastian Bansemir,
initiator of BMW’s crowdfunding campaign, told us that
the campaign helped BMW to improve their understanding
of customers’ needs and improve innovation development,
concluding, ‘‘I think the initiative was a great success and
made innovation development even more customer-centric.
I highly appreciated the ideas shared by the community and
really enjoyed its spirit’’.
3.3 The Case of Bose
Bose Corporation, a U.S.-based, privately held audio
equipment maker, recently launched an Indiegogo cam-
paign to fund development of earplugs that can help people
sleep better by masking unwanted noises and replacing
them with soothing sounds (Bose 2018). Bose’s ‘‘Sleep-
buds’’, which also incorporate an alarm that does not wake
up the user’s sleep partner (Carnoy 2017), differ from what
Bose has produced in the past in that they do not play
music and are much smaller than any of Bose’s other
wireless devices (Casserly 2017). However, with estimated
sales of around US$3.8 billion in 2017 (Bose 2017), Bose
could easily have developed the product with its own
money. So why did Bose engage in crowdfunding?
As Brian Mulcahey, Bose’s Director of Emerging
Business, explained, ‘‘We want[ed] to bring customers in
earlier than we have traditionally done at Bose [to] validate
the product vision’’ (as quoted in Casserly 2017). There-
fore, the primary goal of Bose’s crowdfunding campaign
was not funding but prototyping. Bose used Indiegogo to
find motivated testers and collect feedback on its prototype,
so the Sleepbuds, whose estimated retail price is US$249,
were offered for only US$150 (Casserly 2017). ‘‘We
believe that testers who pay for the prototype are likely
living with a severe ‘noise in the bedroom’ problem,
they’re going to use the prototype rigorously, and they’ll
provide more and better feedback’’ (as quoted in Ridden
2017). Bose was confident that Indiegogo’s comment and
survey functions would support this mission.
Bose’s crowdfunding campaign was highly successful.
The discounted US$150 Sleepbuds quickly sold out, so
Bose added several other reward tiers. In less than
3 months, all rewards were completely sold out, and the
campaign had collected US$450,320 in pledges from 2930
backers – 901% of Bose’s funding goal of US$50,000.
2
The Sleepbuds have recently been shipped, so Bose has
already received some feedback from its customer-testers
and decided to officially launch the product soon (Carnoy
2018). As Indiegogo (2018) commented on the campaign,
‘‘Who knew that there was a market for wireless earbuds
that don’t play music? Our community of 9.5 million early
adopters did. They gave Bose a resounding green light for
their new sleep technology by voting, not just with opin-
ions, but with their wallets’’.
3.4 The Case of IBM
To foster internal innovation and collaboration, IBM
launched probably the largest implementation of enterprise
crowdfunding in 2012 through several campaigns, which
helped IBM to collect employees’ ideas and expertise (see
Frick 2013). IBM’s enterprise-crowdfunding platform
(which was initially referred to as ‘‘1x5’’) was first tested in
two research departments, then adopted by a large IT
department (‘‘iFundIT’’), and finally used to collect ideas
from all IBM employees (‘‘iFundIT3’’) (Feldmann and
Gimpel 2016; Feldmann et al. 2014; Muller et al.
2013,2014). All versions of IBM’s enterprise-crowdfund-
ing platform offered functionalities that were inspired by
popular crowdfunding websites like Kickstarter and
Indiegogo (Feldmann et al. 2014, p. 4; Muller et al. 2013,
p. 504). Employees participated in these campaigns vol-
untarily using company money provided by senior man-
agement (Feldmann et al. 2014, p. 4). They lost any
unspent money after the funding period expired (‘‘use it or
lose it’’), and their projects could not collect more money
than they targeted (Muller et al. 2013, p. 505).
The participation rates were high in IBM’s enterprise-
crowdfunding campaigns – participants submitted a variety
of proposals that addressed diverse organizational and
individual challenges – and, enterprise crowdfunding
stimulated collaboration across departmental borders and
organizational hierarchies (Muller et al. 2013, p. 510), so it
helped IBM collect and evaluate innovative ideas from
diverse employee groups (Feldmann et al. 2014, p. 4). The
first campaign, which had a budget of only US$50,000, still
resulted in nineteen ideas that were funded out of thirty-
four proposed (Muller et al. 2013, pp. 505 f.). The IT
campaign, which had a budget of US$150,000, yielded ten
projects that were funded out of fifty-five proposed (Feld-
mann et al. 2014, p. 4), and the corporate campaign, which
had a budget of US$4 million, resulted in forty-two ideas
that were funded out of 204 proposed (Feldmann and
Gimpel 2016, pp. 2 and 6). According to Power (2014), this
expansion demonstrates ‘‘how social networking systems
have begun to cross over from the consumer world to
corporations to drive innovation. Not only does this
approach give more control to employees, it results in
innovative projects that are launched in a matter of weeks,
not months’’.
1
Visit www.startnext.com/pages/bmw#contest for more information
about BMW’s Startnext campaign (accessed 05 Mar 2018).
2
Visit www.indiegogo.com/projects/bose-noise-masking-sleepbuds-
sold-out-sleep#/ for more information about Bose’s Indiegogo cam-
paign (accessed 05 Mar 2018).
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A. Simons et al.: Enterprise Crowdfunding, Bus Inf Syst Eng 61(1):113–121 (2019) 115
3.5 The Case of Shock Top
Shock Top, a California beer brand owned by Anheuser-
Busch, used Indiegogo to launch the ‘‘Shock the Drought’’
campaign, which supported projects that addressed the
California drought and helped reduce water use (Anheuser-
Busch 2015). Shock Top’s campaign differed from the
other companies’ crowdfunding campaigns because Shock
Top played only a supporting role and did not seek funding
for any of its own projects or products. From August 2015
to January 2016, Shock Top supported three projects:
Drop-A-Brick 2.0, which promoted use of a rubber brick
that can be placed into toilet tanks to save water, with
US$100,000; EvaDrop, a shower head with sensors and a
timer that can significantly limit water use, with
US$62,000; and Droppler, a smart water gauge that pro-
vides data on water usage, with US$50,000, plus marketing
support (Brown et al. 2017, p. 191). Shock Top’s financial
support helped reduce these products’ retail prices, and
Shock Top also donated some of these products to water-
conservation organizations in California (Hessekiel 2015).
Jake Kirsch, Vice President of Shock Top, said, ‘‘Working
together, we can Shock the Drought by sharing great ideas,
pledging support and funding new inventions, and we’re
excited to lead this charge’’ (Anheuser-Busch 2015).
3
The official objective of the Shock the Drought cam-
paign was to ‘‘to identify, fund and distribute water-saving
innovations that have the potential to make a real impact on
reducing water usage in the state’’ (Anheuser-Busch 2015),
but it also strengthened Shock Top’s brand identity (Brown
et al. 2017, p. 192). The preservation of natural resources,
particularly water, is of major concern to millennials, who
are Shock Top’s core customers, and one out of every four
Shock Top brews is sold in California (Hessekiel 2015).
Accordingly, Shock Top had good reason to show it was
committed to California’s environment, so it used enter-
prise crowdfunding to strengthen its brand’s identity by
building it around a good cause (Brown et al. 2017, p. 191).
4 Research Findings
Despite these examples from practice, which suggest that
companies increasingly use enterprise crowdfunding, aca-
demic research on enterprise crowdfunding is still in its
infancy. Most of the few studies that have been published
have focused on the IBM case, which has been studied
from a social-networking perspective and from a decision-
making perspective.
Muller and colleagues studied the IBM case from a
social-networking perspective and suggested that enterprise
crowdfunding can have significantly higher participation
rates than other social-media campaigns, as it helps over-
come both hierarchical and departmental barriers and
allows employees to initiate organizational change (Muller
et al. 2013, pp. 506 ff.); that geographical similarities,
work-group similarities, and company-division similarities
among project creators and supporters are associated with
higher investments, while prior relationships between them
play only a minor role (Muller et al. 2014, pp. 782 ff.); that
joint projects from several creators have higher success
rates than projects with fewer or single creators (Muller
et al. 2016, pp. 1251 ff.); and that people with larger social
networks take more prominent roles in enterprise crowd-
funding, which can also help them extend their social
networks (Muller et al. 2018, pp. 24 f.).
The studies on the IBM case that have taken a decision-
making perspective have suggested that employees tend to
make decisions about whether to fund a project idea
quickly (Feldmann et al. 2014, pp. 5ff.). The presentation
and design of project ideas have also been studied from the
perspective of decision-making. For example, Feldmann
and Gimpel (2016, pp. 7 f.) found that idea elaboration
positively affects funding success, while self-containment
negatively affects funding success, and that measures of
idea quality – such as novelty, relevance, and feasibility –
play a surprisingly small role. The design of IBM’s internal
crowdfunding platforms has also been studied, and design
principles have been proposed (e.g., to create guidelines for
idea description or to implement separate rounds of
crowdfunding based on project categories) (Feldmann et al.
2014, p. 8).
Another internal enterprise-crowdfunding campaign has
been studied at Siemens, a German-based manufacturing
company. Siemens launched its own Intranet website,
‘‘Quickstarter’’, in 2015 and has held several crowdfunding
contests since then (see Hesse 2016). The Quickstarter
contests resembled IBM’s crowdfunding campaigns,
although Siemens separated theirs into two phases: an
ideation phase during which employees submitted ideas,
and an investment phase during which employees spent
company money on these ideas (Schweisfurth et al. 2017b,
p. 7). The contests sought to support innovation by col-
lecting ideas from employees, so they also helped foster
inter-departmental discussions among employees. The
Siemens case supports some of the findings from the IBM
case; for example, it suggests that enterprise crowdfunding
may suffer from hierarchical similarity biases (i.e.,
employees’ idea evaluations tend to be more favorable if
they are hierarchically similar to the idea creator) (Sch-
weisfurth et al. 2017b, p. 1), especially for highly inno-
vative and novel ideas (Schweisfurth et al. 2017a).
3
Visit www.indiegogo.com/campaign_collections/shock-the-
drought for more information about Shock Top’s Indiegogo cam-
paign (accessed 05 Mar 2018).
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116 A. Simons et al.: Enterprise Crowdfunding, Bus Inf Syst Eng 61(1):113–121 (2019)
While researchers have given some attention to crowd-
funding that has used corporations’ intranets, enterprise-
crowdfunding campaigns that have used the public Internet
have rarely been studied. Apart from the IBM studies, most
researchers have approached enterprise crowdfunding from
a conceptual perspective. For example, enterprise crowd-
funding has been conceptualized from a prediction-market
perspective (Feldmann et al. 2013), a marketing perspec-
tive (Brown et al. 2017), and a process perspective (Go
´mez
et al. 2016). However, only a few researchers have used
empirical data to study Internet-based enterprise-crowd-
funding campaigns. An exception is the BMW case, which
was used to identify design elements for online crowd-
funding contests (e.g., regarding time frames, target
groups, budgets, and rewards) (Jovanovic
´et al. 2017, pp. 6
ff.). As Brown et al. (2017, pp. 193 f.) concluded, estab-
lished companies’ increasing engagement in online
crowdfunding may have a profound impact on the crowd-
funding industry, but this impact and other urgent questions
have yet to be studied. The following sections provide a
foundation for future research by offering a conceptual-
ization of enterprise crowdfunding and an outlook on
potentially useful research topics.
5 Synthesis
The available applications and extant research demonstrate
that crowdfunding is useful not only for startups and small
businesses but also for established companies. They also
show that companies have used enterprise crowdfunding in
diverse ways, which makes it difficult to define enterprise
crowdfunding. Still, the synthesis of results from research
and practice provides a foundation on which to conceptu-
alize enterprise crowdfunding at a general level and sepa-
rate it from conventional crowdfunding. At the most basic
level, enterprise crowdfunding takes either of two
approaches: internal or external.
Internal crowdfunding happens within corporations, so
it is not open to the public. For example, IBM, Siemens,
and companies like Daimler (see Lehrbass 2017) have
created their own internal crowdfunding platforms. In
internal crowdfunding, employees propose and evaluate
projects, so part of the objective is to involve and engage
them in innovation management and to foster collaboration
among them (see, e.g., Feldmann et al. 2014; Muller et al.
2013). Employees spend corporate money to fund the
project ideas and engage in enterprise crowdfunding
because it gives them an opportunity to address organiza-
tional and individual challenges, initiate organizational
change, and have a say in project management (Muller
et al. 2013, p. 511). The budgets the corporations allocate
to these projects are shared resources that employees spend
on ideas that they believe provide the best benefits to
themselves or their organization (Muller et al. 2014,
p. 779), so internal crowdfunding can help to overcome
corporate borders and hierarchies and may foster collabo-
ration across departments and among diverse groups of
employees (Muller et al. 2013, p. 503). As it leverages
collective intelligence, internal crowdfunding can also help
companies manage their increasingly large portfolios of
ideas and accelerate the approval process for novel projects
(Feldmann et al. 2014, p. 2).
While the earliest corporate crowdfunding campaigns
were internal, external crowdfunding has also gained
momentum, especially on Indiegogo. External crowd-
funding involves an open call to the public. External
crowdfunding projects tend to be much more diverse than
internal crowdfunding projects are. For example, the Bose
case and cases like FirstBuild (Kapoor et al. 2017,p.3)
demonstrate that companies increasingly use crowdfunding
for prototyping. As Joel Hughes, Indiegogo’s Director of
UK and Europe, explained, ‘‘recently, established busi-
nesses have been using crowdfunding platforms before
they prepare for mass-manufacturing of their products [,
n]ot because they need the funds, but because the market
validation and opportunity to connect with customers
through crowdfunding is incredibly useful’’ (as quoted in
Knowles 2017). However, companies also use enterprise
crowdfunding for other reasons. For example, BMW used a
crowdfunding website for an idea contest, which was
similar to how companies like Hasbro have engaged in
enterprise crowdfunding (Key 2017). As these companies
did not have a finished product to be crowdfunded, they
used the crowd to collect and evaluate innovative product
ideas (Brown et al. 2017, pp. 192 ff.). In addition, as the
Shock Top case demonstrates, some companies have also
used crowdfunding to strengthen their brand identities.
Camden Town, a London beer brewery, even used
crowdfunding to raise funds to expand its production
capacity and export beer outside the U.K. (Brown et al.
2017, p. 191).
Clearly, the reasons of why companies engage in
enterprise crowdfunding differ, and an enterprise-crowd-
funding campaign usually pursues diverse objectives. For
example, as Jovanovic
´et al. (2017, p. 1) explained,
BMW’s idea contest had three major strategic objectives:
marketing, evaluation, and financing. Brown et al. (2017,
p. 192) analyzed established companies’ crowdfunding
campaigns on the Internet and concluded that they all
pursued several objectives, many of which were similar,
even though they all had unique primary targets that drove
the campaigns. Therefore, internal and external enterprise
crowdfunding can also have similar objectives. For
example, the BMW case was external but had objectives
that resembled those of IBM’s and Siemens’ internal
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A. Simons et al.: Enterprise Crowdfunding, Bus Inf Syst Eng 61(1):113–121 (2019) 117
campaigns. Still, the common denominator in all these
cases is that the crowdfunding campaigns were promoted
by established companies, not startups or small businesses,
and that fundraising usually was not the primary goal but
was used as a way to pursue other objectives (e.g., idea
creation, marketing, branding, and/or prototyping).
As these objectives were diverse, the reasons of why
participants engaged in enterprise crowdfunding also dif-
fered. While BMW offered monetary rewards, IBM and
Siemens employees had an intrinsic motivation to engage
in crowdfunding, and Bose reached out to potential cus-
tomers of its earbuds. As a result, the process of crowd-
funding also varied. In the Bose case, for example, backers
pledged their own money to get early access to product
prototypes, just like conventional crowdfunding campaigns
that use rewards, while BMW collected virtual money and
rewarded the best ideas, and IBM employees spent com-
pany money to evaluate ideas that they believed would
benefit the company.
These findings provide a foundation on which to sepa-
rate enterprise crowdfunding from conventional crowd-
funding. We used a review of the extant literature to
identify three characteristics of conventional crowdfund-
ing: (1) its primary objective is fundraising; (2) it involves
an open call; and (3) it is typically online, using either
intermediary platforms or individual websites. However,
the synthesis of results from research and practice suggests
that enterprise crowdfunding does not necessarily share
these characteristics: (1) enterprise crowdfunding does not
usually seek funds; (2) only external crowdfunding
involves an open call, while internal crowdfunding is
limited to a company’s employees; and (3) only external
crowdfunding is Internet-based, as internal crowdfunding
uses Intranet platforms. Based on these conclusions, we
characterize enterprise crowdfunding as follows:
Enterprise crowdfunding is used by established
companies and is not typically used for fundraising
but for other reasons, which determine how it is
implemented. Internal enterprise crowdfunding is
primarily used to foster innovation and collaboration
among employees, who propose and evaluate project
ideas on Intranet platforms by allocating company
money. External enterprise crowdfunding is often
used to collect ideas from people outside a company,
who propose and evaluate ideas on Internet plat-
forms, but it can also serve other purposes, including
prototyping and branding.
As enterprise crowdfunding is an emerging phenomenon,
and because some companies have used it for other
purposes, including fundraising, this definition is not meant
to be exhaustive and may require adaptation. Still, it may
help researchers to conceptualize enterprise crowdfunding
in future research studies.
6 Future Research
Several useful topics may guide future research. First,
future research should focus on further conceptualizing
enterprise crowdfunding, both from an internal and exter-
nal perspective. As explained, the term crowdfunding is a
combination of the terms crowdsourcing and funding, and
while conventional crowdfunding leverages the idea of
crowdsourcing for fundraising (see Mollick 2014, p. 2), it
is the opposite with internal crowdfunding, which lever-
ages the idea of fundraising for crowdsourcing (see Mal-
hotra et al. 2017, p. 73). Therefore, internal crowdfunding
has much in common with several well-known concepts,
including participatory budgeting (Niemeyer et al. 2016),
idea-evaluation communities, intra-organizational idea
markets, and bottom-up idea-evaluation systems (Schwe-
isfurth et al. 2017b, p. 3), from which future research
should distinguish internal crowdfunding. As for external
crowdfunding, future applications are likely to extend its
scope as described in this article, so future research is
challenged to develop a conceptualization of external
crowdfunding that considers the diversity of purposes that
Internet-based crowdfunding campaigns may serve. In
doing so, researchers should also take into account recent
technological trends, particularly blockchain (see Mendling
et al. 2018), as companies like Chainium have started to
build crowdfunding platforms based on blockchain tech-
nology with which private and public businesses can sell
equity (Smith 2018). As blockchain may provide a more
secure, efficient, and low-cost crowdfunding solution than
intermediaries (Zhu and Zhou 2016, p. 1), future research is
challenged to evaluate the usefulness of blockchain tech-
nology in crowdfunding contexts.
Second, internal crowdfunding is particularly interesting
for design-oriented research. While research on conven-
tional crowdfunding has studied the design of crowdfund-
ing projects in pursuit of funding targets, the design of
crowdfunding websites has been taken largely for granted.
That companies typically develop and use individual
platforms in internal crowdfunding offers opportunities for
design-science researchers. Research on the IBM case has
delivered first design principles (Feldmann et al. 2014,
pp. 7 f.), but researchers are still challenged to study other
companies’ crowdfunding campaigns to theorize about the
design and use of internal crowdfunding platforms on a
more general level. In fact, several calls for further research
remain unanswered, even though research on internal
crowdfunding has considerable potential from the
123
118 A. Simons et al.: Enterprise Crowdfunding, Bus Inf Syst Eng 61(1):113–121 (2019)
perspective of data analysis, as new data sources, such as
log files (e.g., Feldmann et al. 2014, p. 3), can be analyzed.
Such data sources may facilitate a holistic exploration of
crowdfunding from a decision-making perspective. The
reasons that employees engage in enterprise crowdfunding
differ significantly from those of conventional crowd-
funding (Muller et al. 2013, pp. 507 f.), so employees may
also make their decisions differently than the public does.
For example, Feldmann et al. (2014, p. 3) argued that
participants in enterprise crowdfunding may be prone to
heuristic system-1 thinking, which is fast, effortless, and
often unconscious, rather than slow, controlled, and
reflective system-2 thinking (Evans 2008, p. 257). While
research on conventional crowdfunding has also found that
backers may be prone to system-1 thinking, but only under
certain conditions (e.g., Simons et al. 2017, p. 4346), future
research should explore to what extent employees, who
engage in enterprise crowdfunding by pledging corporate
money, make use of heuristics. Such research could be
useful to those who design internal crowdfunding in par-
ticular because it may suffer from hierarchical similarity
bias (Schweisfurth et al. 2017a,b). For example, employ-
ees may tend to support ideas that are proposed by col-
leagues in their own divisions, especially when they are
part of a small subdivision (Reitzig and Sorenson 2013,
pp. 790 ff.). From a design perspective, knowledge about
cognitive heuristics and biases can be used to alter
employees’ behavior in a beneficial way (e.g., to promote
sustainable, charitable, or social projects), a process known
as digital nudging (Weinmann et al. 2016).
Future research should also observe the impact that
established companies’ engagement in crowdfunding has
on crowdfunding communities and the crowdfunding
industry as such (Brown et al. 2017, pp. 193 f.). People
engage in crowdfunding for various reasons: for financial
returns, to collect rewards like products, for altruism, for
fun, or because they identify with projects and project
teams and want to support small-business owners’ inno-
vative ideas (Bretschneider et al. 2014, pp. 4 ff.). It will be
interesting to see to what extent regular backers also
identify with established companies and how crowdfunding
communities will perceive and accept established compa-
nies’ engagement in crowdfunding. In addition, this
engagement may make fundraising more difficult for star-
tups and small businesses that have much smaller mar-
keting budgets and professional networks (Brown et al.
2017, p. 194). Accordingly, future research should explore
backers’ motivation to support established companies’
crowdfunding projects and identify the characteristics of
the companies, projects, and websites that have used
enterprise crowdfunding successfully. In addition, several
other questions deserve researchers’ attention. For exam-
ple, fraud is a major problem on several crowdfunding
websites, so trust has become a major barrier to online
fundraising (Kang et al. 2016, p. 1801). Such may not be
the case with established companies’ projects, as they tend
to have credible reputations that help them compete with
small and largely unknown businesses. As Brown et al.
(2017, p. 193) proposed, future research should also
explore reputational risks that are associated with compa-
nies’ engagement in crowdfunding, as projects could fail to
reach their funding targets, exceed their delivery dates, or
result in products that do not meet backers’ expectations,
among other risks. While other questions are likely to
emerge as established companies increasingly make use of
crowdfunding, it is safe to say that enterprise crowdfunding
has much to offer for researchers from several domains,
including Information Systems.
7 Conclusions
While crowdfunding on the Internet is used increasingly to
finance startups and small businesses, many established
companies have also realized that crowdfunding has much
to offer. However, enterprise crowdfunding differs funda-
mentally from conventional crowdfunding practices. We
presented examples of how companies have used enterprise
crowdfunding and reviewed available research findings to
clarify the meaning, functionality, and scope of enterprise
crowdfunding. The synthesis of results from research and
practice suggests that established companies do not use
enterprise crowdfunding for fundraising, although there are
exceptions, but for several other purposes, including idea
creation, prototyping, branding, and collaboration. While
enterprise crowdfunding has received little attention from
academia, it offers research opportunities from both a
design-oriented perspective and a behavioral perspective.
Therefore, this article may guide future research on
enterprise crowdfunding in the Information Systems
domain.
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