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Does first impression count A look at Indiegogo campaigns on the 'Explore All Projects' page
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Background:
Recent studies have analyzed the factors that contribute to the variations in the success of crowdfunding campaigns for a specific cancer type, but little is known about the influential factors among crowdfunding campaigns for multiple cancers.
Objective:
The purpose of this study is to examine the relationship between project features and the success of cancer crowdfunding campaigns, and to determine whether text features affect campaigns' success for various cancers.
Methods:
Using cancer-related crowdfunding projects on the GoFundMe website, we transformed textual descriptions in the campaigns into structured data using natural language processing techniques. Next, we utilized penalized logistic regression and correlation analyses to examine the influence of project features and text features on fundraising project outcomes. Last, we examined the influence of the sentiment of the campaign descriptions on crowdfunding success using Linguistic Inquiry and Word Count (LIWC) software.
Results:
Campaigns were significantly more likely to be successful (P <.05) if they featured a lower target amount for fundraising, a higher number of previous donations, agency (versus individual) organizers, project pages containing updates, and project pages containing comments from readers. The results reveal an inverted U-shaped relationship between the length of the text and the amount of funds raised. In addition, more spelling mistakes negatively affected the funds raised (P <.05).
Conclusions:
Difficult-to-treat cancers and high-mortality cancers tend to trigger empathy from potential donors, which increases the funds raised. There were gender differences in the effects of emotional words in the text on the amount of funds raised. For cancers that typically occur in women links between emotional words used and the amount of funds raised were weaker than for cancers typically occurring among men.
Purpose
This study examines the determinants of medical crowdfunding performance. Drawing on signaling theory, the authors investigate how funding-related signals (funding goal and duration), story-related signals (text length, text sentiment, and use of first-person pronouns), and donor-related signals (donor identity disclosure) affect medical crowdfunding performance.
Design/methodology/approach
This study analyzed the data of 754 medical crowdfunding projects collected from the Qingsongchou platform in China to test the proposed model.
Findings
The empirical findings reveal that both funding goal and funding duration exhibit a U-shaped relationship with crowdfunding performance. Additionally, the authors find evidence that story text length and donor identity disclosure are positively related to crowdfunding performance, whereas the use of first-person pronouns is negatively related to crowdfunding performance.
Originality/value
This study extends the understanding of the determinants of medical crowdfunding performance through the signaling theory. Specifically, this study provides new insights into the roles of funding goal and funding duration in predicting medical crowdfunding performance and identifies several new predictors of crowdfunding performance, including the use of first-person pronouns in project story text and donor identity disclosure.
Crowdfunding is an innovative strategy for financing a new business venture from the general public instead of seeking funds in traditional ways, such as issuing bonds or bank lending. This study aims to identify the determinants affecting the success of a crowdfunding campaign and how different measurements for crowdfunding success, different crowdfunding models, and the selection of subdivided determinants influence the determinants’ impacts on crowdfunding success. We set the disciplines in the search strategy to select studies related to crowdfunding success. Ultimately, 94 empirical papers are selected to reveal the different findings for the determinants of crowdfunding success; based on this information, we construct an integrated framework for future research. There has been much research on project- and creator-related factors; however, many of these factors have inconsistent relationships with crowdfunding success due to varying measurements of success. In particular, different measurements used within the same study for determinants or crowdfunding success may also produce inconsistent results. In addition, different crowdfunding models of a project have been found to induce additional findings. Our review of the determinants of crowdfunding success and the definitions of the determinants, as well as the proposed integrated framework, can help focus future work on relatively new or unique determinants rarely addressed in the existing literature. This work provides practical implications for both theory and practice, and directions for future research.
A common phenomenon that increasingly stimulates the interest of investors, companies, and entrepreneurs involved in crowd funding activities particularly on the Kickstarter website is identifying metrics that make such campaigns markedly successful. This study seeks to gauge the importance of key predictive variables or features based on statistical analysis, identify model-based machine learning methods based on performance assessment that predict success of a campaigns, and compare the selected different machine learning algorithms. To achieve our research objectives and maximize insight into the dataset used, feature engineering was performed. Then, machine learning models, inclusive of Logistic Regression (LR), Support Vector Machines (SVMs) in the form of Linear Discriminant Analysis (LDA), Quadratic Discriminant Analysis (QDA), and random forest analysis (bagging and boosting), were performed and compared via cross validation approaches in terms of their resulting test error rates, F1 score, Accuracy, Precision, and Recall rates. Of the machine learning models employed for predictive analysis, the test error rates and the other classification metric scores obtained across the three cross-validation approaches identified bagging and gradient boosting (the SVMs) as more robust methods for predicting success of Kickstarter projects. The major research objectives in this paper have been achieved by accessing the performance of key statistical learning methods that guides the choice of learning methods or models and giving us a measure of the quality of the ultimately chosen model. However, Bayesian semi-parametric approaches are of future research consideration. These methods facilitate the usage of an infinite number of parameters to capture information regarding the underlying distributions of even more complex data.
Low success rates have been one of the critical issues in crowdfunding. Previous studies already indicated that the project description will affects the success of the crowdfunding project. However, there is no research to explore which factors should be included in the project description for directly affecting the success of the project. The participants’ text comments have been confirmed that they might change supporters’ decisions. In most of crowdfunding related studies, they often used questionnaires survey which may have sampling bias and require a lot of manpower and time. In addition, they merely focus on music and sports fields but have not yet discussed the movie projects. Consequently, this study attempts to present a scheme to identify the key success factors, especially for project description and user comments, using text mining and data mining approaches. In our presented scheme, feature selection methods, including Decision Trees (DT), Least Absolute Shrinkage and Selection Operator (LASSO), and Back Propagation Network (BPN) pruning method are employed to select important factors from real projects in Kickstarter and Indiegogo. Then, a support vector machine (SVM) is performed to evaluate the performances of selected candidate factor subsets. Finally, we can determine the key success factors for movie crowdfunding projects. Experimental results can give the fundraisers useful suggestions for increasing the success rate of movie crowdfunding projects.
This study explores how restaurant entrepreneurs incorporate various intrinsic and extrinsic cues into the design of reward-based crowdfunding campaigns to maximize their probability of success. This study aims to identify the optimal levels of each of these cues to guide entrepreneurs’ strategic behavior. Based on the cue utilization theory and the concept of optimal arousal, this study collected restaurant project data from Kickstarter. Linguistic Inquiry and Word Count (LIWC) was also used to quantify linguistic cues in the project title. Linear and quadratic terms of cues were included in the logistic regression model. An optimal campaign should have 13 pictures, 2 videos, a detailed but succinct description, and many rewards. The project title should have a neutral and conservative style instead of being extremely positive.
This article focuses on entrepreneurs’ self-funding behavior in the reward crowdfunding context and its relation to crowdfunding success. Theoretically anchoring our discussion in signaling theory, we argue that self-funding sends similar information to that conveyed by quick-fix bootstrapping efforts. Accordingly, we hypothesize that self-funding behavior is positively associated with crowdfunding success as it can help alleviate uncertainties around fundraiser’s intent and quality as perceived by prospective backers. To show this, we use a sample of 1,583 campaigns collected from Zhongchou, the largest Chinese reward-based crowdfunding platform, to test our hypotheses. Our results demonstrate that entrepreneurs' direct self-funding is positively associated with crowdfunding success. Moreover, this effect is partially mediated by the quality of campaigns content elements.
Researchers have attempted to measure the success of crowdfunding campaigns using a variety of determinants, such as the descriptions of the crowdfunding campaigns, the amount of funding goals, and crowdfunding project characteristics. Although many successful determinants have been reported in the literature, it remains unclear whether the cover photo and the text in the title and description could be combined in a fusion classifier to better predict the crowdfunding campaign's success. In this work, we focus on the performance of the crowdfunding campaigns on GoFundMe across a wide variety of funding categories. We analyze the attributes available at the launch of the campaign and identify attributes that are important for each category of the campaigns. Furthermore, we develop a fusion classifier based on the random forest that significantly improves the prediction result, thus suggesting effective ways to make a campaign successful.
Crowdfunding has broken the barriers between an aspiring entrepreneur and financial markets. Kickstarter, a leading crowdfunding platform, which works on the 'all-or-nothing' model, provides various facilities to the project owners to gather the funds from the contributors in return of a reward. The facts signify that most of the projects fail to reach the funding goal. This study sampled 200 successful projects randomly by quota sampling from each category to assess commonalities in the successful projects on Kickstarter. The study assessed the marketing appeals, video presentation, shipment facilities, and project owner details to check the commonalities among successful projects. The results revealed that although rational appeals generate more funding, however, emotional appeal is widely used in successful projects. The paper will be helpful for the fundraisers to know the recipe for a successful project and to funders to enhance their chance of exceeding the funding goals.
Crowdfunding allows the public to donate small amounts of money to entrepreneurs through online platforms. In contrast with traditional financial institutions, this new method facilitates the financing process through direct and easy online contact between initiators and investors. Based on the data obtained from Kickstarter, the largest crowdfunding platform, we investigate 27,117 crowdfunding projects from 1 January 2015, to 30 June 2015, and we find that a crowdfunding campaign with a realistic funding goal, a suitable funding period, and more updates and interactions with investors is much more likely to be successfully funded. In addition, the different types of founders are very influential in crowdfunding outcomes. For example, females tend to be more successful than males at collecting funds. Founders in the form of teams, companies, or a specific project are also beneficial to funding outcomes.
This paper examines the determinants that influence crowdfunding success. In particular, this study focuses on reward-based crowdfunding, in which funders receive a reward for supporting a project.
By studying hand-collected data from 335 reward-based crowdfunding projects and 33,036 investment decisions from the Spanish Goteo platform and using the ordinary least squares regression, the negative binomial, the logit and the Cox proportional hazard models, we highlight the factors that explain the success of a project.
We find statistically significant results for crowdfunding project success for the following variables: location, experience, human capital and gender. Thus, the success of crowdfunding campaigns depends on the experience of the project members since it lends credibility to the project.
Furthermore, the geographic location variable indicates that crowdfunding success is higher in projects located in Spain than in those located outside of Spain. Our results also suggest that crowdfunding related to the support of social impact initiatives that involve the ecological typology does not perform well.
Crowdfunding has been widely used by small and micro enterprises, which can raise funds through launching a project in crowdfunding platform. It is also beneficial to sustainable financing. What is more, the success of crowdfunding projects facilitates the sustainable development of those growing enterprises. In this study, from the perspective of information communication and based on information asymmetry and signaling theory, we identify three dimensions of information description, including information quantity (word count, picture count and video count), information attitude (as measured by comment), and information quality (readability and update). We empirically examine their direct effects on crowdfunding success and the moderating effect of information attitude using binary logistic regression. Data (N = 7207) is collected from Kickstarter, a popular crowdfunding platform. The results reveal that when considering these three dimensions of information description together, word count is associated with crowdfunding success in an inverted-U shape. Picture count, video count, comment, and update have positive effects on crowdfunding success. In contrast, readability is negatively related to crowdfunding success. In addition, we find that comment negatively moderates the effect of picture count on crowdfunding success. These findings show the significance of information description on crowdfunding success, bringing theoretical and practical insights for project creators.
This study aims to determine the multi-sided factors of crowdfunding campaigns on the fundraising success of crowdfunding projects conducted in ASEAN-5 (five big countries in The Association of Southeast Asian Nations) countries between 2014 and January 2019 through a multi-theory approach. Using secondary and cross-section data from Kickstarter, this research uses the probit regression method to analyze the data and test the hypotheses. First, in line with the goal setting theory, small-sized projects are more likely to be funded. Second, the large teams are preferable by the potential backers, in line with the resource-based view of firms. Further, the self-determination theory shows that rewards are one of the big extrinsic motivations for the backers in ASEAN. Moreover, our paper also shows the remarkable result with the funding target which has negative influence to probability success of crowdfunding. This is because our project samples are used from the ASEAN countries whose owner or investor is more concerned to be risk averse than a risk taker. These results provide insight and bring a contribution to the crowdfunding literatures in ASEAN.
This paper introduces a neural network and natural language processing approach to predict the outcome of crowdfunding startup pitches using text, speech, and video metadata in 20,188 crowdfunding campaigns. Our study emphasizes the need to understand crowdfunding from an investor’s perspective. Linguistic styles in crowdfunding campaigns that aim to trigger excitement or are aimed at inclusiveness are better predictors of campaign success than firm-level determinants. At the contrary, higher uncertainty perceptions about the state of product development may substantially reduce evaluations of new products and reduce purchasing intentions among potential funders. Our findings emphasize that positive psychological language is salient in environments where objective information is scarce and where investment preferences are taste based. Employing enthusiastic language or showing the product in action may capture an individual’s attention. Using all technology and design-related crowdfunding campaigns launched on Kickstarter, our study underscores the need to align potential consumers’ expectations with the visualization and presentation of the crowdfunding campaign.
We assess the relative importance of project, product category, entrepreneur, and location effects on reward-based crowdfunding success. Applying variance decomposition analysis to a sample of 98,336 crowdfunding projects launched between May 2009 and May 2014 on the Kickstarter platform, we find that agency factors, specifically the project and entrepreneur effects, explain the highest relative variance (over 80% of total variance) across three crowdfunding success outcomes – pledge amount, number of backers, and funding success. Structural factors, specifically product category and location effects, have lower but still significant effects. Our study extends prior variance decomposition studies in strategy and entrepreneurship research by incorporating location effects and examining the nascent stage of firm formation. It also contributes to crowdfunding research by providing a systematic framework to compare key determinants of reward-based crowdfunding outcomes. The findings are of practical relevance to aspiring entrepreneurs seeking funding through reward-based crowdfunding platforms.
Existing research on antecedent of funding success mainly focuses on basic project properties such as funding goal, duration, and project category. In this study, we view the process by which project owners raise funds from backers as a persuasion process through project descriptions. Guided by the unimodel theory of persuasion, this study identifies three exemplary antecedents (length, readability, and tone) from the content of project descriptions and two antecedents (past experience and past expertise) from the trustworthy cue of project descriptions. We then investigate their impacts on funding success. Using data collected from Kickstarter, a popular crowdfunding platform, we find that these antecedents are significantly associated with funding success. Empirical results show that the proposed model that incorporated these antecedents can achieve an accuracy of 73 % (70 % in F-measure). The result represents an improvement of roughly 14 percentage points over the baseline model based on informed guessing and 4 percentage points improvement over the mainstream model based on basic project properties (or 44 % improvement of mainstream’s performance over informed guessing). The proposed model also has superior true positive and true negative rates. We also investigate the timeliness of project data and find that old project data is gradually becoming less relevant and losing predictive power to newly created projects. Overall, this study provides evidence that antecedents identified from project descriptions have incremental predictive power and can help project owners evaluate and improve the likelihood of funding success.
While equity crowdfunding provides ventures with an opportunity to collect funding from a large base of investors, many campaigns tend to remain unsuccessful. We draw from two fields of financing adjacent to equity crowdfunding, venture capital (VC) and angel investing, as well as rewards-based crowdfunding, to develop an understanding of the drivers of investment decisions in equity crowdfunding. Using data from a leading equity crowdfunding platform in Northern Europe, we explore factors that drive the number of investors and amount of funding attracted by equity crowdfunding campaigns. The results suggest that the investment decision criteria traditionally used by VCs or business angels are not of prime importance for success in equity crowdfunding. Instead, success is related to pre-selected crowdfunding campaign characteristics and the utilization of private and public networks. The findings are relevant for the decision making of entrepreneurs and crowdfunding platforms, as both parties benefit from campaign success.
Crowdfunding via the internet is a relatively new phenomenon in research and gaining momentum currently. While taking a data-driven approach into investigating the properties and dynamics of crowdfunding campaigns would allow the use of computational social science in investigations on crowdfunding, existing data-driven research on crowdfunding remains very limited. This is particularly true on the level of individual funder data. In this study, we contribute to the empirical body of knowledge on crowdfunding by introducing Indiegogo as a data source and, more specifically, the development and implementation of a crawler and scraper for accessing Indiegogo campaign data, and sharing this openly for other researchers. Due to the extremely dynamic and rapidly increasing amount of crowdfunding data in terms of the number of crowdfunding campaigns and the available investment and individual investor data, we believe our approach is useful for supporting public and open data-driven research, instead of providing merely a static data set.
Crowdfunding is a process where commercial or non-commercial projects are initiated in a public announcement by organizations or individuals to receive funding, assess the market potential, and build customer relationships. Crowdfunding is employed in a variety of different categories, ranging from technology to arts and even disaster relief. Even though crowd-funding has received widespread attention, not only in the media, literature on the subject is still sparse and lacks especially empirical research. In contrast, research in new product preannouncement is established and more mature, and, due to similarities in process and goals, yields entry points for crowdfunding research. This paper contributes by reducing the gap in crowdfunding research by drawing on insights from new product preannouncement literature. To this end, a common definition of crowdfunding, which is currently lacking in literature, is derived and used to characterize commonalities with new product preannouncement. This theoretical discussion is complemented by empirically testing the derived hypotheses about common success factors. Conclusions are drawn from the logistic-regression, using the technology category of a project dataset with 45,400 observations. Research shows that while timing and communication are key success factors, common to both new product preannouncement and crowdfunding, other success factors may already be standard and cannot separate the successful crowdfunding projects from the unsuccessful.
Crowdfunding allows founders of for-profit, artistic, and cultural ventures to fund their efforts by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries. Drawing on a dataset of over 48,500 projects with combined funding over $237 M, this paper offers a description of the underlying dynamics of success and failure among crowdfunded ventures. It suggests that personal networks and underlying project quality are associated with the success of crowdfunding efforts, and that geography is related to both the type of projects proposed and successful fundraising. Finally, I find that the vast majority of founders seem to fulfill their obligations to funders, but that over 75% deliver products later than expected, with the degree of delay predicted by the level and amount of funding a project receives. These results offer insight into the emerging phenomenon of crowdfunding, and also shed light more generally on the ways that the actions of founders may affect their ability to receive entrepreneurial financing.
Medical crowdfunding helps low-income patients raise money for medical treatment and has grown tremendously in recent years. The most appropriate messaging strategy for writing charitable appeals to attract donations remains unclear. This study fills this gap by drawing on Aristotle's three modes of persuasion to explore factors affecting willingness to donate to medical crowdfunding projects from three aspects: logos, pathos, and ethos. This study adopted a multi-method approach by conducting two laboratory experiments (N = 125 and N = 123) and a field study (N = 1645). Analysis of variance (ANOVA) in Study 1 showed that high information quality (F = 9.774, p = 0.002) and gain frame (F = 8.620, p = 0.004) have positive effects on the trustworthiness of the project initiator (ethos), which in turn promoting potential donors’ willingness to donate (β = 0.339, p = 0.001). Study 2 confirmed the findings about information quality in Study 1, and further show that there was no significant difference between gain-first and gain-last frame on trustworthiness and willingness to donate (p > 0.05). Then, information quality is further detailed into three sub-dimensions in Study 3: text length, number of images, and number of health-related words. The results of ordinary least squares (OLS) regression with robust standard error indicate that the text length (β = 0.350, p < 0.001) and number of images (β = 0.048, p < 0.001) positively influence donation behavior, but the opposite conclusion yields health-related words (β = -0.027, p < 0.01). This study provides theoretical insights into the role of medical crowdfunding charitable appeals by verifying the persuasion effects of rational, emotional, and credibility appeals. This study also contributes to persuasion theory by highlighting the role of emotional appeals and identifying the mediating impact of credibility appeals in the context of medical crowdfunding. This study also has important practical implications by guiding funders to write persuasive charity appeals that will attract the attention of potential donors.
This study explores the main and interaction effects of framing messages and cause-related marketing on backing intentions by manipulating frame types, frame valences, and cause-related marketing in the message narratives of crowdfunding projects. We conduct an online experiment for a crowdfunding campaign and analyze data using independent-samples t-test and ANOVA. This study's findings show that negative messages lead to higher backing intentions than positive ones regarding attribute and goal framing messages. Narratives with cause-related marketing in crowdfunding projects had a more significant effect on increasing backing intentions than those without cause-related marketing. Positive attribute framing messages combined with cause-related marketing had significantly higher backing intentions than messages without cause-related marketing; for negative attribute framing, there was no significant difference between with and without cause-related marketing. This study theoretically advances the literature on reward-based crowdfunding, which provides scholars with insight into the effects of the written narrative design of crowdfunding projects on backing intentions and extends to the applications of framing effect theory and cause-related marketing. Practically, this study provides project initiators and crowdfunding platform operators with new perspectives on proposal copywriting content design and project operation.
Many reward-based crowdfunding platforms encourage entrepreneurs to introduce their projects and make a personal appeal with a video clip. In this study, we investigate the impact of such a pitch video on financing outcomes. Grounded in social perception literature, we propose that effective use of nonverbal cues in a pitch video increases funding success. We coded and analyzed videos of crowdfunding campaigns and found that an entrepreneur could improve the funding outcomes by gazing less, appearing early, and reducing speech hesitations in a pitch video. We also found that smiling has no impact on funding success.
In this study, we pay special attention to the effects of social capital in crowdfunding performance. Previous researches already investigate the influencing factors of crowdfunding performance, but the influence mechanism of social capital on crowdfunding performance is unclear. We first explore the effects of social capital on crowdfunding performance through an empirical study based on the large-scale real-world dataset with 103,582 campaigns collected from Indiegogo. The empirical results suggest social capital has remarkable influence on crowdfunding performance. Some interesting findings are indicated. For example, the longer descriptions about campaigns improve the crowdfunding performance, but the longer descriptions about campaign owners worsen the crowdfunding performance. In addition, we deeply test the moderating effects of campaign category. Then we further develop a prediction method for crowdfunding performance from the perspective of social capital. The experiments demonstrate the effectiveness of our social capital-based prediction model.
Outlines the key challenges, state-of-the-art remedies, best practices, and corresponding standards for evaluation for web scraping in consumer research. Provides a structured workflow designed to achieve consistency and standardization in how web scraping is conducted, documented, reported, and evaluated in both the research and peer review process. The authors propose four interdependent facets necessary for generating credible scientific findings from web scraping-based research: (1) design transparency, (2) analytic reproducibility, (3) analytic robustness, and (4) effect replicability and generalizability.
This study examines how small, entrepreneurial enterprises can design crowdfunding projects for their aftermarket offerings. Drawing from signaling theory and the elaboration likelihood model, we investigate the direct and interactive effects of brand prominence (i.e., conspicuous display of a brand name in project titles and descriptions) and narrative features (i.e., language styles and narrative length) on funding success of crowdfunding projects by entrepreneurial aftermarket enterprises. Analysis of data from 343 crowdfunding projects shows the positive influence of brand prominence, language style, and narrative length on funding success. Findings also show that brand prominence increases the effects of language styles and narrative length on funding success. Based on these findings, we identify multiple theoretical contributions and directions for future research as well as practical recommendations for entrepreneurial aftermarket enterprises on designing crowdfunding projects.
Fund-seekers launching crowdfunding campaigns must provide information about their product or service to attract potential fund-providers. They usually provide information about their product using text, videos, and images. However, the amount of information that maximizes the likelihood of funding success is unknown. This study amalgamates the communications and crowdfunding literature and argues that the total-information has a curvilinear relationship with the likelihood of funding success. This study collects data from more than two thousand rewards-based crowdfunding campaigns, conducts multiple logit regression analyses, and demonstrates that total-information initially positively and later negatively affects the likelihood of crowdfunding success. Furthermore, this study indicates that fund-seekers should focus on providing information through text and videos rather than images.
Crowdfunding is an innovative and relatively new financial method that connects entrepreneurs and investors through the Internet. It allows entrepreneurs to raise often small amounts of funds from a large number of investors to finance start-ups. The gaming industry is a suitable market for crowdfunding and has uniquely interesting characteristics that are worthy of exploration. The article examines which factors can influence the success of crowdfunding campaigns in this industry. The study uses principal components analysis, logistic regression and the OneRule method to analyze 9962 projects between 2009 and 2018. Several attributes, including textual variables are identified that influence the success of crowdfunding campaigns. The findings provide valuable insights for the success surrounding such campaigns and have implications for practice.
Optimists contend that crowdfunding, in which project backers use online campaigns to assemble numerous small donations, can democratize access to finance, but there are legitimate concerns that this funding approach remains discriminatory. Drawing on recent readings emphasizing the geographic components of Bourdieu’s field theory, we argue the relationship between crowdfunding teams’ resources and crowdfunding success is mediated by spatial capital—the ability to draw capital from other social spaces due to geographic context. We use logistic regressions predicting success rates for 134,098 campaigns launched in the USA on the Indiegogo platform between 2009 and 2015, combined with other spatial data, to model the relationship between spatial capital and other success predictors. Our models suggest spatial context mediates the relationship between resources and success. Rural areas, in particular, have lower success rates than urban areas, and affluent areas have the highest success rates. Given that only around 10% of Indiegogo campaigns are fully funded, spatial inequalities place significant limits on who can benefit from crowdfunding campaigns, suggesting crowdfunding may not democratize access to finance, as optimists hope.
This study explores the determinants of restaurant crowdfunding success, inspired by success determinants found in independent restaurant literature. The results indicate that community orientation, images that show elements of the restaurant concept, and frequent communication with funders are key drivers for success. We conclude that restaurant entrepreneurs who show that their project benefits the community where they operate, provide constant updates that maintain project interest, and are responsive to funders’ comments are more likely to succeed in reward-based crowdfunding.
Crowdfunding has been discussed as a tool for acquiring resources, a way of communicating information to potential investors, and a means of testing the market potential of entrepreneurial projects. Yet, little is known about how successful crowdfunding influences consumers' perceptions about a product or its features. We assume that mentioning a successful crowdfunding campaign in a product advertisement can provide valuable quality signals. Such signals are particularly relevant for sustainability-oriented products because sustainability attributes are often not directly accessible to potential consumers. Based on a 2 (crowdfunding: yes vs. no) × 3 (product category: low complexity vs. medium complexity vs. high complexity) experimental study (n = 530), we find that signaling crowdfunding success has an influence on product perceptions and on the credibility of sustainability attributes. Furthermore, we show that the effects of this signal depend on different levels of product complexity.
Crowdfunding has received a lot of attention from IS academics, and it is important to understand what led to crowdfunding success. Many studies examined determinants of crowdfunding success, but little attention has been paid to the interaction between creators and backers. We examine effects of comment (including quantity, sentiment, and length) and reply (including ratio, length, and speed) to understand the importance of creator-backer interaction in crowdfunding success. A total of 959 projects from a major crowdfunding platform in China were collected and analyzed. The results indicate that comment quantity, comment score, reply length, and reply speed are positively associated with the fundraising success. In addition, comment sentiment positively moderates the effect of comment quantity on crowdfunding success. The findings demonstrate the importance of interaction between creators and backers in crowdfunding success, providing both theoretical and practical implications.
Purpose
The purpose of this paper is to investigate the extent to which rewards-based crowdfunding really does provide financial support for start-ups and small businesses relative to other types of activity such as creative and cultural projects.
Design/methodology/approach
The paper reports findings from a series of multiple regression on a unique data set covering around 205,000 rewards-based crowdfunding projects across a number of leading platforms in the USA, the UK and Canada.
Findings
The authors report two main findings. First, rewards-based crowdfunding is highly inequitably distributed and that success is concentrated within a relatively small number of platforms and campaigns. Second, crowdfunding campaigns explicitly related to business perform relatively poorly compared with those in other categories; particularly those in creative areas such as music and dance.
Originality/value
These findings call into question the extent to which rewards-based crowdfunding really is a means by which significant numbers of start-ups can bridge gaps in the provision of finance.
Crowdfunding is regarded as a novel way of collecting money for innovators to introduce products or services they ultimately wish to launch. The question arises, however, of what makes funding projects on these online platforms, with their different features of project evaluation and risk management, more successful than traditional fundraising approaches. We examine this question in the context of a pre-ordering model, which is also known as the reward-based crowdfunding model. A large-sample data analysis based on 116,956 crowdfunding projects on Kickstarter showed that most founder (i.e., identity disclosure and prior experience) and project (i.e., comments, updates, description elaborateness, and campaign duration) features have a positive effect on successful crowd fundraising. We also found a negative relationship between the funding goal amount and successful fundraising. Our findings may contribute not only to knowledge accumulation in crowdfunding research, but also to founders by offering evidence-based guidelines on the design of successful crowdfunding projects in an online fundraising platform.
Crowdfunding has enabled various entrepreneurs, artists and other individuals and organisations to bring projects to life. Despite all success stories, 63% of all projects initiated on the biggest crowdfunding platform kickstarter.com and 46% of all projects initiated on the biggest German crowdfunding platform startnext.com, do not raise enough money to be realised. This study investigates which factors beyond project quality and personal network impact the success of a crowdfunding campaign. Using data collected from startnext.com, we analyse the impact of six factors on the probability of success and provide practical recommendations for initiators. The six factors we analyse are: inclusion of a video, length of project description, communication with backers, curation by a third party, crowdfunding activity of the project initiator and number of rewards. In particular, we show that the inclusion of a video, an intensive communication with backers via blog posts, a history in supporting projects and the creation of a variety of rewards can significantly increase the likelihood that a project succeeds.
The development of Internet crowdfunding platforms has transformed how businesses, nonprofits, and even congregations seek funding from large numbers of donors who each give a relatively small amount of money. In particular, Indiegogo’s religion category for campaigns has developed into a platform used by Christian communities seeking funding for expanding their ministries. Drawing upon a rhetorical analysis of five faith-related campaigns that closed funding between December 2013 and April 2015, I consider how the giving rhetoric varies between the campaigns’ mode of communication, comparing their textual rhetoric to their video messaging. Using the lens of multimodal theory (Córdova, Shipka), I argue that while the textual rhetoric of the campaigns studied emphasizes communicating practical information about the ministry, the giving rhetoric of the campaign videos highlights a more personal, emotional connection between the ministry and potential backer.
The World Wide Web Consortium provides software developers with guidelines for designing accessible, cross browser compatible websites. Currently however, there are no guidelines in this area specific to the features of an e-commerce website. This paper explores the current usability issues relevant to users with visual impairment and further proposes a framework that seeks to ensure the site is suitable for visually impaired users. This paper includes data analysis which compares current issues in web technologies suitable for e-commerce and proposes system adaptations which can be conducted to portray the improvements in overall user experience. To this extent, several validation tools and testing techniques have been used to identify the usability issues that visually impaired users currently face when shopping online.
How does a proponent’s internal and external social capital impact crowdfunding performance? Based on the theory of social capital, we developed a research model and conducted an econometric analysis using the objective data collected from a Chinese comprehensive crowdfunding platform, ZhongchouNet. Results of an econometric analysis of a sample of 862 projects show that two types of the proponent’s external social capital have significant effect on crowdfunding performance alone. Moreover, the effect of internal and external social capital on the success of a campaign is fully moderated by the type of the project. These results suggest that, to improve crowdfunding performance, the proponents, especially proponents of for-profit projects, should make good use of the mechanisms of social capital construction existed inside the crowdfunding platform.
The realisation of many environmental ventures requires funding from external parties, which is not always easy to obtain. Crowdfunding offers a new potential source of financing, which is frequently expected to favor environmentally oriented ventures. However, little is known if and how crowdfunding can be effectively used for such ventures. The article empirically examines this phenomenon by analysing how the environmental orientation of crowdfunding projects influences their likelihood of successful funding. Surprisingly, no positive connection between environmental orientation and crowdfunding success can be observed in the dataset used. Therefore, reasons for the relatively low rate of success of environmentally oriented crowdfunding projects are discussed and potential measures to assist in the more effective use of crowdfunding in the context of sustainability are suggested.
Crowdfunding platforms enable the financing of projects by soliciting small investments from a large base of potential backers over the Internet. These platforms create a dynamic funding network. We use data collected from Kickstarter, the largest crowdfunding platform, to study some of the dynamics of such a network. We focus on project owners who choose to operate on both sides of the market, creating campaigns of their own as well as backing the projects of others. We find that an owner’s backing-history has a significant effect on financing outcomes; campaigns initiated by entrepreneurs who have previously supported others have higher success rates, attract more backers and collect more funds. We extend network exchange theory to the domain of crowdfunding and find evidence for both direct and indirect reciprocity. We quantify the impact of such reciprocal forces on the performance of crowdfunding platforms and campaigns. We also show that owners who are backers form a sub-community that is active in backing projects, especially those initiated by its members. These findings suggest that backing the projects of others is a rewarding strategy.
The nascent crowdfunding literature has highlighted the existence of a self-reinforcing pattern whereby contributions received in the early days of a campaign accelerate its success. After discussing what sustains this pattern, we maintain that the internal social capital that proponents may develop inside the crowdfunding community provides crucial assistance in igniting a self-reinforcing mechanism. Results of an econometric analysis of a sample of 669 Kickstarter projects are consistent with this view. Moreover, the effect of internal social capital on the success of a campaign is fully mediated by the capital and backers collected in the campaign's early days.
In online peer-to-peer commerce places where physical examination of the goods is infeasible, textual descriptions, images of the products, reputation of the participants, play key roles. Visual image is a powerful channel to convey crucial information towards e-shoppers and influence their choice. In this paper, we investigate a well-known online marketplace where over millions of products change hands and most are described with the help of one or more images. We present a systematic data mining and knowledge discovery approach that aims to quantitatively dissect the role of images in e-commerce in great detail. Our goal is two-fold. First, we aim to get a thorough understanding of impact of images across various dimensions: product categories, user segments, conversion rate. We present quantitative evaluation of the influence of images and show how to leverage different image aspects, such as quantity and quality, to effectively raise sale. Second, we study interaction of image data with other selling dimensions by jointly modeling them with user behavior data. Results suggest that "watch" behavior encodes complex signals combining both attention and hesitation from buyer, in which image still holds an important role when compared to other selling variables, especially for products for which appearance is important. We conclude on how these findings can benefit sellers in a high competitive online e-commerce market.
