Does more crowd participation bring more value to crowdfunding projects? The perspective of crowd capital

Abstract

Purpose The purpose of this paper is to focus on investigating the impact of crowd participation on degree of project success, which is defined as the total amount of funds a project can obtain after it reaches its initial funding goal threshold. Design/methodology/approach Drawing on the theory of crowd capital, this study develops six hypotheses about the impact of crowd capability of a fundraiser (i.e. project updates, goal setting, reward levels and social media usage) and crowd participation (i.e. namely, funds pledge and on-site communication) on degree of project success. The hypotheses are tested using data sets of successful projects collected from two popular crowdfunding websites. Findings This study finds that funds pledge has an inverse U-shaped relationship with degree of project success. Project updates, reward levels and on-site communication positively influence degree of project success, while funding goal negatively affects degree of project success. Research limitations/implications This study contributes to prior literature by investigating the degree of project success determinants using the perspectives of both fundraisers and crowds, which provides a more comprehensive understanding of what makes a crowdfunded project a success. Practical implications The empirical results of this study provide fundraisers with guidelines about how to access more funds after achieving the initial funding goals. Originality/value This work is one of the first to investigate the degree of project success and its determinants from the perspectives of both fundraisers and crowds.

Love cannot buy you money: Resource exchange on reward‐based crowdfunding platforms

“…Examinations of rewards on crowdfunding platforms have been lacking from the literature, with one study stating ‘the most distinctive feature of reward‐based crowdfunding – rewards – has seldom been studied’ (Simons et al, 2017, p. 4346). To date, research on crowdfunding rewards has emphasised basic characteristics of rewards offered in reward portfolios, such as the number of rewards or limited availability rewards (eg, Kunz et al, 2017; Lin et al, 2016; Yin et al, 2019; Zhang & Chen, 2019). Our study extends this research through an in‐depth examination of the content of the rewards project campaigns offer and the effects of the reward portfolio design on funding success.…”

“…Research has also indicated a downside to offering too many rewards; that is, the more rewards offered the lower the chances of successful funding outcomes (Chen et al, 2016;Xiao et al, 2014). However, findings regarding the number of rewards offered have been inconsistent because offering more rewards has also been demonstrated to increase the chances of funding success (Kunz et al, 2017;Lin et al, 2016;Yin et al, 2019). Researchers have also discovered that limiting the number of a particular reward offered and adding rewards later in the funding period can increase funding success (Lin et al, 2016).…”

“…To date, these efforts have largely focused on examining the number of rewards that project creators offer in their reward portfolios. The results have been mixed, with some studies indicating that offering more rewards increases the chances of funding success (Kunz et al, 2017;Lin et al, 2016;Yin et al, 2019) and others finding offering more rewards decreases it (Chen et al, 2016;Xiao et al, 2014). A few studies have examined characteristics of the rewards, such as if backers prefer the middle options in a portfolio of rewards or if offering exclusive or limited rewards is advantageous (Adam et al, 2019;Lin et al, 2016;Simons et al, 2017;Thürridl & Kamleitner, 2016;Wessel et al, 2019).…”

Research on the Effects of Information Description on Crowdfunding Success within a Sustainable Economy—The Perspective of Information Communication

“…First, most of the related empirical studies have only focused on one or two dimensions of information description. Some have only examined the effect of information quantity [22,27,29,30,33,34], some have only concerned information quality [35][36][37], and some have only studied information attitude [38,39]. Second, although few researchers have considered all the three dimensions of information description as antecedents of crowdfunding success, they have only focused on one or two aspects of each dimension of information description.…”

Initial coin offerings and the cryptocurrency hype - the moderating role of exogenous and endogenous signals

“…As soon as individuals consider the decisions of other individuals as more informative than their own information, it is likely that they will ignore their information and imitate the actions of other individuals in order to overcome current uncertainty (Sun 2013). This cascade is increasing, and a possible immediate successor will perceive even more reasons to ignore the own information (Yin 2019). Previous IS research showed that, due to large amounts of information available about the purchase decisions of consumers online, the Internet is the ideal environment for this type of herd behavior.…”