A Comparative Analysis of Crowdfunding in Poland and Romania

Abstract

Given the difficulty to access traditional bank funding by creative businesses and start-ups, crowdfunding as an alternative way to finance innovative and creative projects has been adopted, enacted and successfully used by several Western countries, which can serve as best practice examples. However, in many countries crowdfunding is still an emerging phenomenon due to its novelty and variety, the general awareness regarding this alternative funding method being relatively low. The aim of this paper is to investigate the extent to which Poland and Romania, the two largest Central and Eastern European member states, have adopted and used crowdfunding to support innovative and creative projects and to assess the sustainability of such a novel funding method in the respective countries. The objective of the comparative analysis is to determine how the existing legal framework supports the implementation of crowdfunding activities and what crowdfunding types are being used in each country based on the existing local crowdfunding platforms, to identify and explain the main strengths and weaknesses of each of the two markets, as well as to provide a set of measures and proposals that can be adopted by the two countries in order to promote and enhance the crowdfunding phenomenon, which we argue is a factor that ensures business sustainability in creative and innovative activities carried out especially by start-up companies. Apart from the empirical analysis of legislation and platforms, the research methodology includes a survey among business students and fresh graduates of business schools, the purpose of which being to assess the level of awareness of young entrepreneurs-to-be regarding this funding method.

Crowdfunding in Kenya: Factors for Successful Campaign : The Case of Kickstarter Crowdfunding Platform

“…donation-based crowdfunding has also been described as the acceptance of donations in terms of monetary resources through the internet without the expectation of receiving any form of reward (Noelia et al, 2021). According to Fanea-Ivanovici and Siemionek-Ruskań (2019), crowdfunding has developed from its initial forms such as donation-based and reward-based to more developed forms such as equity-based, lending-based, hybrid, and invoice trading crowdfunding. Crowdfunding if well utilized is useful in economic growth and development through exploiting the available opportunities in the community and innovation particularly in areas where obtaining finance is difficult (Hervé and Schwienbacher, 2018).…”

“…There are connections between regular updates and successful projects. Yin et al (2019), study revealed that project updates and communication positively affect the success of crowdfunded campaigns. Additionally, Borst et al (2018), found a positive effect of project updates and tweets on the success of crowdfunding campaigns.…”

“…Regular updates also create a sense of trust from the backers. Song et al (2019) stated that crowdfunding platforms and campaigns require openness and trustworthiness to succeed. Their study suggested that trust is very essential for the success of crowdfunded activities and is gained through sharing information with the intended investors.…”

Psychological Determinants of Investor Motivation in Social Media-Based Crowdfunding Projects: A Systematic Review

“…The crowdfunding mechanisms spreads to more and more countries around the world. Yang et al, 2016;Dikaputra et al, 2019;Fanea-Ivanovici and Siemionek-Ruskan, 2019;Mendes-Da-Silva et al, 2019;Wang and Xue, 2019 Crowdfunding enables the democratizing of financing by eliminating barriers and diminishing restrictions. It supports the equitable distribution of financing for innovation and the underestimated economic power of investor-users.…”

“…Crowdfunding mechanisms are legally recognized by the governments of more and more countries, which leads to their rapid development and increase in popularity worldwide, beyond the traditional western space. The development is rapid or promising in countries such as China (Wang and Xue, 2019 ) or ASEAN-5 (Indonesia, Malaysia, Singapore, Philippines, and Thailand) (Dikaputra et al, 2019 ), Eastern-European countries such as Poland and Romania (Fanea-Ivanovici and Siemionek-Ruskan, 2019 ), but still hesitant in African countries (Jaziri and Miralam, 2019 ).…”