Impact of dissatisfaction on funders’ decision to reinvest in crowdfunding: A distrust-based perspective

Abstract

BACKGROUND: In recent years, crowdfunding platforms have gained importance in the financing industry. An emerging issue is that only a fraction of investors decide to reinvest after the initial investment experience. One key factor that might be responsible for low reinvest rates, which ultimately results in lower crowdfunding success and unsustainable crowdfunding platforms, is dissatisfaction. OBJECTIVE: This paper aims to shed light on the repercussions of dissatisfying investment experiences. First, the authors investigate to what degree individuals' dissatisfaction with a crowdfunding platform's founders has a direct negative impact on their decision to continue investing on the platform. Second, this study examines whether the emergence of individuals' distrust in a platform's founders is a consequence of dissatisfaction and how this influences their decision to reinvest in projects on the platform.

Crowdfunding in times of crisis – the interplay of uncertainty and backers' well-being in small business rescue campaigns

“…business) uncertainty on backers' satisfaction. Gierczak et al (2015) discussed the possible delay of rewards and its influence on backers' satisfaction, and Strohmaier et al (2020) studied the role of backers' dissatisfaction in dictating future investment decisions. Finally, Zhao et al (2019) showed that psychological contract violation, a manifestation of backers' negative emotions resulting from a contract breach, is negatively associated with backers' funding intentions.…”