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Enterprise Crowdfunding: Foundations, Applications, and Research Findings



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 businesses. While most traditional funding models collect large amounts of money from a small number of (often professional) 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, launched 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 established companies have also developed an interest in crowdfunding. For example, Indiegogo recently launched aprogram called ‘‘Indiegogo Enterprise’’, which several large companies, including Hasbro, Heineken, and Motorola, have joined ( In addition, companies like IBM and Siemens have implemented 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 fundamentally from conventional crowdfunding, as it pursues targets other than fundraising. Section 2 characterizes 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 5 synthesizes the findings from research and practice to conceptualize and characterize enterprise crowdfunding. Section 6 presents promising topics for future research, and Sect. 7 concludes the paper.
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 ( 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,
¨rst-Franz-Josef-Strasse, 9490 Vaduz, Liechtenstein
Bus Inf Syst Eng 61(1):113–121 (2019)
(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-
114 A. Simons et al.: Enterprise Crowdfunding, Bus Inf Syst Eng 61(1):113–121 (2019)
navigation systems (‘‘RouteSync’’).
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.
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’’.
Visit for more information
about BMW’s Startnext campaign (accessed 05 Mar 2018).
sold-out-sleep#/ for more information about Bose’s Indiegogo cam-
paign (accessed 05 Mar 2018).
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).
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).
drought for more information about Shock Top’s Indiegogo cam-
paign (accessed 05 Mar 2018).
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
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
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
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
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... Crowdfunding harnesses the power of a crowd using internet platforms for funding and has been classified into four types based on backers' motivations: lending (Lin and Viswanathan, 2016), equity (Agrawal et al., 2014), donation (Burtch et al., 2014) and reward-based (Sahaym et al., 2021). These types contain some common factors, but enterprise crowdfunding (including internal and external types) does not necessarily share the same (see Table 1) (Simons et al., 2019). Brands have shown an interest in external enterprise crowdfunding (similar to BCF), but despite past successful results (Moradi and Badrinarayanan, 2021), few brands have fully capitalized on it, most likely because brands borrowed external crowdfunding platforms for their campaigns. ...
... BCF uses the brands' established social media platforms instead of borrowed ones. Past research on BCF is scant (Fortezza et al., 2021); therefore, there exists an opportunity to explore types of campaigns and behavioral perspectives (Simons et al., 2019). Given this dearth in research, this study leverages literature from reward-based and external enterprise crowdfunding as a starting point, given its similarities with BCF. ...
Purpose Brand crowdfunding, launched through brands’ social media platforms, can provide a myriad of crowdfunding and branding benefits, such as strengthening brands’ social networks, validating product launches, generating mass exposure and enabling cocreation. Gamification positions brand crowdfunding as an exciting and joyful activity that more deeply engages prosumers. Anchored on resource-based theory, theory of planned behavior and service-dominant logic, this paper aims to develop a brand crowdfunding framework for established brands with insights from two emerging markets: China and India. Design/methodology/approach A deductive cross-sectional design is used to gather data from an established brand’s (e.g. Xiaomi) social media followers in China ( n = 826) and India ( n = 358), which is analyzed through PLSc-SEM. Findings The results reveal that social media brand engagement is an antecedent of brand crowdfunding participation, brand crowdfunding intention is a predictor of brand loyalty and gamification is a significant moderator in technology-oriented societies. Originality/value The paper develops a brand crowdfunding framework that provides insights on how established brands can leverage crowdfunding to enhance their new product development process. The results contribute to the social media brand engagement, crowdfunding, gamification and emerging markets literature.
... Interest among researchers in this form of financing is still quite high, especially since, despite the COVID-19 pandemic, CF continues to be a popular form of online capital raising [4,5]. ...
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This paper presents the results of a survey of small and medium-sized enterprises (SMEs) in Poland that have benefited from crowdfunding (CF). Based on these results, a new business model was developed. On this basis, the CF equity, reward and donation models were analyzed, and the impact of CF on the way of creating value in the company in the context of sustainable development was determined. The survey results show that the use of CF promotes the sustainable development of SMEs in Poland and significantly impacts their business model. In practical terms, this research has contributed to a better understanding of value creation by these companies. The results of our analysis are useful for consulting companies and CF platforms that help SMEs organize campaigns. In theoretical terms, the study conducted and the methodology used allow the presentation of a new definition of CF and a sustainable business model for a company using CF as well as contribute to the value management theory in SMEs.
... the procurement of funds (Brown et al., 2017;Troise, 2019). In addition, donation crowdfunding can also be viewed from the lenses of social welfare (Hoque et al.,2018;Zhao and Sun, 2019), brand awareness (Allison et al., 2015;Aitamurto, 2015;Brown et al., 2017;Simons et al., 2019) and virtual interactive platform allowing an exchange of ideas and resources (Greenberg et al., 2013;Ryu and Suh, 2020). ...
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This paper conducts a bibliometric analysis of the literature on donation-based crowdfunding by identifying important publications, authors, journals, countries, and frequently occurring keywords using VOSviewer. It analyzes a dataset of 701 publications sourced from the SCOPUS database with the help of five bibliometric techniques, including co-citation analysis, citation analysis, co-occurrence analysis, co-authorship, and bibliographic coupling. The citations and co-citation analysis of references reveal that "The dynamics of crowdfunding: An exploratory study" by Mollick, 2014 is the most cited article". Citation, Co-citation, and co-occurrence analysis of authors indicate that Snyder, J., Burtch, G., Schwienbacher, A., Lambert, T., Beleflamme, P., Catalini, C., Goldfarb. A., and Agrawal, A. are the prominent authors in the field. Bibliographic coupling of sources suggests that the journal "Sustainability" (20) leads in publications, followed by "Technological Forecasting and Social Change" (16). Moreover, a co-occurrence analysis of author keywords reveals that the keywords which frequently occur around donation-based crowdfunding are "Social Media," "Entrepreneurship," "Entrepreneurial Finance," "Social Capital," and "Fundraising." Finally, the citation analysis of the country of publications shows that the United States leads in the number of publications (187), followed by China (89).
... Crowdfunding has become an important channel for innovators, entrepreneurs, and incumbents to raise funds for developing new technology products and business ideas (Yuan et al., 2016;Kraus et al., 2016;Dushnitsky et al., 2016;Brem et al., 2019;Popescul et al., 2020;Rrustemi & Tuchschmid, 2020;Sahaym et al., 2021). Crowdfunding has been defined as "the efforts by entrepreneurial individuals and groups -cultural, social, and for-profit -to fund their ventures by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries" (Hörisch, 2015;Simons et al., 2019). Unlike traditional funding and investment options, crowdfunding is an alternative digital multisided marketplace that stays open to everyone (Kraus et al., 2016;Hoegen et al., 2018;Isabelle et al., 2019;Koch & Siering, 2019). ...
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... Fourth, in line with previous research we categorize all remaining investors as regular crowd investors (Estrin et al., 2018;Goethner, Luettig, et al., 2021;Simons et al., 2019). According to Goethner, Luettig, et al. (2021), this group of investors primarily pursues financial interests and tries to keep the probability of financial losses small. ...
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Now a day, crowdfunding is the most prominent area which the people are using to generate and create the funds. This is not only popular in developed countries, but also popular in developing countries. In India, the scope of the crowdfunding is increasing exponentially. Blockchain is one of the best way to do the fundraising and Crowdfunding. Many MSE and organizations are practicing the crowdfunding to raise funds for their infrastructures and the projects. The large number of people can easy contribute their funds electronically. Traditionally, the task was done in form of bank loans and partnerships, now the digital world has given so many options to raise the funds. Entrepreneur can easily generate the fund through the crowdfunding platforms. The proposed system addressed the various issues and their solutions to use the crowdfunding platforms. The article shows an approach and methodology which is secure and transparent to raise the fund using blockchain architecture.KeywordsBlockchainCrowdCrowdfundingEntrepreneurshipFund raisingSmart contractsSocial entrepreneurshipTransparency
Building Back Better (BBB) is a key international concept as a guiding framework for disaster recovery. This chapter explores how different socio-cultural contexts have affected the trajectories of post-disaster recovery processes in two countries, Indonesia and Japan. It will show how economic embeddedness has affected recovery efforts and mobilisation of resources through crowdfunding from the community. Similar financial or social schemes can produce different outcomes, and are subject to the influences of giving as a specific cultural practice. In Indonesia Muslim almsgiving reflects empathy and compassion whilst in Japan donations target economic and social returns. This chapter argues that achieving BBB requires policy-makers to understand economic embeddedness in giving in different societies. It highlights the importance of identifying an appropriate local strategy to enhance disaster recovery and community resilience.
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When employees participate in organizational crowdfunding, they seek partial funding from their existing social networks. Among proposers of projects, teams with larger social networks tend to be more successful in reaching their funding goals. However, little is known about the consequences of participation on employees' social networks, during and after the crowdfunding campaign. In a study of activity logs and social networks from a very large scale organizational crowdfunding campaign, we found that people in different crowdfunding roles experienced different degrees of growth in their social networks, during and after the crowdfunding campaign, as compared with baseline nonparticipants. These findings contribute to previous work on the strongly social nature of crowdfunding. Organizations can use these results to increase the density of their internal social networks. Employees can use these results to strategize their participation in workplace social networks and in organizational innovation.
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This paper presents a first-ever empirical examination of the effectiveness of signals that entrepreneurs use to induce (small) investors to commit financial resources in an equity crowdfunding context. We examine the impact of venture quality (human capital, social (alliance) capital, and intellectual capital) and uncertainty on fundraising success. Our data highlight that retaining equity and providing more detailed information about risks can be interpreted as effective signals and can therefore strongly impact the probability of funding success. Social capital and intellectual capital, by contrast, have little or no impact on funding success. We discuss the implications of our results for theory, future research and practice.
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Idea contests integrate customers into innovation processes and enhance product development of companies. Utilizing the " wisdom of the crowd " as means to improve idea generation and idea assessment has received rising popularity in research and practice alike. One new mechanism to enhance such crowd-based approaches is a crowdfunding idea contest. Crowdfunding as important platform-based financial concept is based on the collective intelligence or rather wisdom of crowd-mechanism as the crowd decides what projects to fund and thus realize. In a corporate context, crowdfunding enables customers to propose own ideas on digital platforms and to promote other ideas by allocating a given monetary budget, leading to knowledge sharing and improving innovation management processes. Enterprises employing a crowdfunding idea contest have to cope with strategic decisions and design issues. In this paper, we analyze the strategic decision process that lead to the design of a crowdfunding idea contest and investigate the design elements of such a customer-oriented innovation approach. The research method for our study is twofold. First, in a pre-study we derive design elements for crowdfunding idea contests by conducting expert interviews. Second, we use a case study approach to analyze the case of an idea contest called " Mobility Experience Challenge " carried out by the German automotive company BMW in collaboration with the crowdfunding platform Startnext. The idea contest addressed external individuals that were asked to submit their ideas for innovative apps used in conjunction with cars and to evaluate them. We were able to accompany the decision-making process of BMW during the design of the crowdfunding initiative, including challenges and ways of how to overcome these. The results show that BMW's idea contest is based on the triad marketing, evaluation and financing. Moreover, several strategic discussion rounds and adjustments were needed until the initiative was designed. The contest design includes several different factors that can be clustered in organization, funding object and contest. Organization refers to the strategic level of the initiative, focusing on BMW. Funding object and contest contain concrete design elements that focus on the crowd. The findings of this study are highly relevant for the implementation of a new idea generation and selection approach in innovation management, which is critical for being competitive in technology driven markets. We introduce crowdfunding as new form of an idea contest on digital platform. Our employed design perspective of a company-driven crowdfunding has concrete practical implications for the implementation by companies.
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(Note that we have updated the paper to the accepted version on 23 Jan 2018) Blockchain technology offers a sizable promise to rethink the way inter-organizational business processes are managed because of its potential to realize execution with- out a central party serving as a single point of trust (and failure). To stimulate research on this promise and the limits thereof, in this paper we outline the challenges and opportunities of blockchain for Business Process Management (BPM). We structure our commentary alongside two established frameworks, namely the six BPM core capabilities and the BPM lifecycle, and detail seven research directions for investigating the application of blockchain technology to BPM.
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Equity crowdfunding via the Internet is a new channel of raising money for startups. It features low barriers to entry, low cost, and high speed, and thus encourages innovation. In recent years, equity crowdfunding in China has experienced some developments. However, some problems remain unsolved in practice. Blockchain is a decentralized and distributed ledger technology to ensure data security, transparency, and integrity. Because it cannot be tampered with or forged, the technology is deemed to have great potential in the finance industry. This study examines current problems in the practice of equity crowdfunding in China. Based on the analysis of the characteristics of blockchain technology, this study further explores its practical applications in equity crowdfunding. 1) Blockchain technology may be a secure, efficient, low-cost solution for the registration of stocks and shares of a firm financed by crowdfunding; 2) Blockchain technology simplifies the transaction and transfer of crowdfunding equities, and thus facilitates their circulation; 3) Blockchain technology enables peer to peer transactions between investors and entrepreneurs, and solves the problems of regulatory compliance and security of fund management; Blockchain technology can be used to develop a voting system for crowdfunders, which enables them to be involved in corporate governance. This helps protect the rights and interests of small investors; 5) Blockchain technology helps regulators know about market conditions, and supports regulatory activities such as managing investors and fighting money laundering. Keywords Blockchain Equity crowdfunding Equity registration and transaction Voting of Shareholders Regulation of equity crowdfunding
Despite the popularity of crowdfunding in academy and practice, there is a lack of cross-cultural study. To fill the research gap, this research explored similarities and differences of successful crowdfunding. In addition, by applying Hofstede's cultural dimensions, this research compared crowdfunding projects of U.S. and South Korea. By employing the content analysis method, the study addresses how culture influences the success of crowdfunding and message strategies. This research contributes to the knowledge building of crowdfunding and cultural significance, as well as providing guidelines for practitioners.
Websites such as Indiegogo and Kickstarter have attracted much attention for their ability to enable organizations and individuals to raise funds from ordinary people who contribute for a number of reasons. This phenomenon is called crowdfunding. Crowdfunding permits organizations and individuals to obtain investments they otherwise might not receive from more traditional sources such as banks, angel investors, and stock markets. A number of now well-known startups had their origins in crowdfunding. More recently, established organizations have begun to use crowdfunding websites not only as a source of finance, but also as marketing platforms. In this way, they have been able to ensure a ready market for their new offerings, with full sales pipelines, and to use the platforms as vehicles to boost brand image and gain support for brand-related causes. This adaptation of crowdfunding for marketing purposes is not without its problems, however, and organizations would be well advised to consider not only the opportunities these platforms provide, but also their limitations and risks.