Individual crowdfunding practices

By Paul Belleflamme, Thomas Lambert, Armin Schwienbacher. Venture Capital, 2013

484 citations recorded by the source corpus.

This study investigates characteristics of individual crowdfunding practices and drivers of fundraising success, where entrepreneurs can tailor their crowdfunding initiatives better than on standardized platforms. Our data indicate that most of the funds provided are entitled to receive either financial compensations (equity and profit-share arrangement) or nonfinancial benefits (final product and token of appreciation), while donations are less common. Moreover, crowdfunding initiatives that are structured as nonprofit organizations tend to be significantly more successful than other organizational forms in achieving their fundraising targets, even after controlling for various project characteristics. This finding is in line with theoretical arguments developed by the contract failure literature which postulates that nonprofit organizations may find it easier to attract money for initiatives that are of interest for the general community due to their reduced focus on profits.

Subfields: Economics and Econometrics, Management Information Systems, Marketing

View Paper: https://www.semanticscholar.org/paper/3563b57874adc42eefae4bd6d9cb0a51b3dde3ea

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Citations in the corpus

Is the crowd sensitive to distance?—how investment decisions differ by investor type (2017, unknown): “The four primary types of crowdfunding models are donation-based, debt-based, equity-based, and rewardbased (Agrawal et al. 2011; Bradford 2012; Schwienbacher and Larralde 2012; Belleflamme et al. 2013, 2014; Burtch et al. 2013, 2014, 2015; Mollick 2014; Ahlers et al. 2015; Schweizer and Zhou 2016).”
Persuasion in crowdfunding: An elaboration likelihood model of crowdfunding performance (2017, background): “Complementing traditional forms of investment, crowdfunding may serve as a ‘bridge’ for entrepreneurs attempting to access other forms of funding (e.g., Belleflamme et al., 2013).”
Crowdfunding success: a systematic literature review 2010–2017 (2020, methodology): “, 2017), Survey Data (Belleflamme et al., 2013), Text analysis (Cumming et al.”
Social finance and crowdfunding for social enterprises: a public–private case study providing legitimacy and leverage (2014, background): “While the idea itself has been successfully employed in donation marketing for a long time, nowadays CF is typically empowered by the social media communication over the Internet and includes a distinct reward and investment logic (Belleflamme, Lambert, and Schwienbacher 2013b).”
The role of venture capital in the emerging entrepreneurial finance ecosystem: future threats and opportunities (2019, background): “Belleflamme, Lambert, and Schwienbacher (2013) define the major constituting elements and players as follows: “crowdfunding involves an open call, mostly through the Internet, for the provision of financial resources either in the form of donation or in exchange for the future product or some form…”
Success drivers of online equity crowdfunding campaigns (2016, background): “Previous research has given some early indications about the possible relevance of the understandability of a company’s offering to campaign success [5, 27].”
Strategies for reward-based crowdfunding campaigns (2016, background): “Based on earlier research, they tend to be more successful than other organizational forms of crowdfunding (Belleflamme et al., 2013).”
The power of positivity? The influence of positive psychological capital language on crowdfunding performance (2018, background): “Further, entrepreneurs who have launched previous campaigns have had opportunities to learn about what is needed to successfully raise funds as well as deliver on promised rewards or products (Belleflamme et al., 2013).”
Three is a crowd? Exploring the potential of crowdfunding for renewable energy in the Netherlands (2016, background): “…the coevolution of the new business model with governmental regulations (Huijben and Verbong, 2013), the heterogeneity of crowdfunders’ motivations (Belleflamme et al., 2013; Doci and Vasileiadou, n.d.), and the fact that the novel business model borrows from pre-existing models (Harrison, 2013).”
The wisdom of the crowd in funding: information heterogeneity and social networks of crowdfunders (2018, background): “The quality of these signals as input into investment decisions is questionable since the crowd might not have expertise in production, marketing and competition, nor are they likely to invest in due diligence given high fixed costs (Belleflamme et al. 2013; Vismara 2016).”
Reward-based crowdfunding of entrepreneurial projects: the effect of local altruism and localized social capital on proponents’ success (2017, unknown): “In reward-based crowdfunding, backers receive non-monetary benefits in return for the money they pledge to projects, for instance, public acknowledgment, credit for an album or a video game, or the possibility of pre-ordering products or services (Belleflamme et al. 2013, p. 317).”