Crowdfrauding: Avoiding Ponzi entrepreneurs when investing in new ventures

Baucus, Melissa S.; Mitteness, Cheryl R.

doi:10.1016/j.bushor.2015.08.003

Cited by 40 publications

(24 citation statements)

References 8 publications

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“…Other research suggests that Investors are more careful in accepting investment offers by reviewing all information related to the offer (Melissa S. Baucus and Mitteness, 2016). Other studies tends to be dominated by the use of statistical anomalies (Bolton and Hand, 2002;Drew and Drew, 2010); bias ratio and sharpe ratio (Sikka and Willmott, 1995;Clauss, Roncalli and Weisang, 2015;King and van Vuuren, 2016) as a method of detecting investment frauds.…”

Section: Introductionmentioning

confidence: 99%

Individual Characteristics, Financial Literacy and Ability in Detecting Investment Scams

Chariri

Sektiyani

Nurlina

et al. 2018

JAA

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This study aims to explore important indicators applicable for the early detection of investment scams and to investigate the effect of age, education and financial literacy on the ability to detectinvestment scams. Data were collected using a questionnaire survey with respondents inSemarang, Indonesia. A total of 311 respondents completed the questionnaires, for a 62.2%response rate, but only 304 questionnaires were usable. Confirmatory factor analysis was used toverify the indicators of investment scams, and a regression model was then employed to analyzethe data. The findings show five main indicators applicable for early detection of investmentscams: a) investments with unreasonably-high returns, b) investment involving salespeople thattend to force potential investors to make an immediate decision about the investment, c)investments without reasonable underlying cores of business, in accordance with principles offairness and prudence in financial investment sectors, d) investments with no clear explanationon how the investment funds are managed, and e) investments without any information on thestructure of management, ownership, and business, and the address of the companies. Finally,the finding shows that the level of individual financial literacy positively affects the ability todetect investment scams. However, age and education do not affect the ability to detectinvestment scams.

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Section: Introductionmentioning

confidence: 99%

Individual Characteristics, Financial Literacy and Ability in Detecting Investment Scams

Chariri

Sektiyani

Nurlina

et al. 2018

JAA

View full text Add to dashboard Cite

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“…Despite the presence of numerous inroads by researchers into explaining how crowdfunding campaigns may succeed in attracting funds [43,44], important issues that correspond to the development stage of crowdfunded projects remain largely unexplored [16]. This lack of attention is disappointing because of several examples of crowdfunding campaigns that, despite strong social and capital support, have not managed to establish themselves as successful initiatives [24].…”

Section: Discussionmentioning

confidence: 99%

How to Manage Crowdfunded Projects: Empirical Evidence from a Comparative Study of Game Development Projects

Ghobadi¹

2020

Proceedings of the Annual Hawaii International Conference on System Sciences

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This study expands current understanding of the crowdfunding phenomenon by explaining how crowdfunding initiatives that have succeeded in hitting their financial targetÑ referred to as crowdfunded projectsÑ can continue to succeed by delivering their promise within the schedule, budget, and quality guidelines. The study develops propositions that elaborate the importance of undertaking four broad strategiesÑnamely, project management, communication, community, and open innovationÑ during crowdfunded projects. It then reports the results of an in-depth, comparative qualitative study of two exemplary game development projects to evaluate the applicability of the propositions and create a better understanding of their underlying concepts. The findings confirm the propositions by demonstrating how the two projects differed greatly in the use of strategies. Furthermore, the exploratory nature of the comparisons enriches the propositions by revealing new concepts that need to be considered in the successful implementation of the identified strategies.

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“…Crowdfunding implies a double switching behaviour: first, entrepreneurs move from traditional banking financing towards crowdfunding for reasons like speed, flexibility, simplicity, process transparency; second, the community diversifies investment options being motivated by a reward or the expected gains (Maier, 2016). Increased transparency, entrepreneur's ethics and speed of reaction on crowdfunding platforms can enhance the herding behaviour of the community (Porlezza & Splendore, 2016;Baucus & Mitteness, 2016;Farajian et al, 2015). Therefore, crowdfunding platform owners should provide all contractual details and updated financial information in real time.…”

Section: Literature Reviewmentioning

confidence: 99%

A Comparative Analysis of Crowdfunding in Poland and Romania

Fanea-Ivanovici

Siemionek-Ruskań

2019

Proceedings of the International Conference on Business Excellence

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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.

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Crowdfrauding: Avoiding Ponzi entrepreneurs when investing in new ventures

Cited by 40 publications

References 8 publications

Individual Characteristics, Financial Literacy and Ability in Detecting Investment Scams

Individual Characteristics, Financial Literacy and Ability in Detecting Investment Scams

How to Manage Crowdfunded Projects: Empirical Evidence from a Comparative Study of Game Development Projects

A Comparative Analysis of Crowdfunding in Poland and Romania

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