The New Strategy to The Legitimation of Informal Firms. The Effects of The Signals and Biases on Decisions About Crowdfunding Digital Transformation (original) (raw)

Crowdfunding for Entrepreneurs- analysis of the Institutional Work

2018

The crowdfunding phenomenon is viewed through the lens of institutional theory and the institutional work done for maintaining the crowdfunding institution. Institutional work by actors of crowdfunding was studied at macro level by analyzing the provision of crowdfunding regulations across 22 countries and at the micro level by analyzing the actions of Indeigogo, a US based crowdfunding platform. It was observed that at the macro level the regulatory bodies are focusing more on deterrence work rather than enabling or policing work. At Micro level crowdfunding platforms are doing valorizing and routinizing work for maintaining the institution. Since the number of scams happening in crowdfunding is rising, it is important to focus on the full institutionalization of this new form of institution. This study will help in guiding efforts of the actors to engage in the the right kind of institutional work that will help in sustenance of this institutional form by providing legitimacy

Entrepreneurship, Crowdfunding Platforms and Sponsors Interaction

International Journal of Academic Management Science Research (IJAMSR), 2019

The aim of the study is to highlight the interaction relation between Crowdfunding platforms sponsors and entrepreneurship in Arabic region. Population consists of members in (12) Crowdfunding Arabic platforms which are working with all models and online at (2018). Descriptive approach and a questionnaire used as a tool for this research. The results showed that Crowdfunding sponsors play an important role to attract investors and entrepreneurs. Also the diversity of sponsors (companies, incubators, banks, universities, etc..) is an important matter in Crowdfunding platforms. The sponsors influence positively on entrepreneurship. Sponsors as part of those platforms give more trust for members, and the type of services that provided through the platforms is and added value for customers. The study recommended more support to Crowdfunding platforms in Arabic region by including more sponsors in Crowdfunding platforms. The services in each Crowdfunding platform must be attractive and rescannable. The level of guarantees, security, money transfer and disclosure are essentials factors for the success of the Crowdfunding platforms especially in the Arabic region as the culture of trust in e-transaction is still extremely low.

The Performance of Crowdfunding Model as an Alternative Funding Source for Micro, Small, and Medium-Scale Businesses in Various Countries

KnE Social Sciences, 2018

Crowdfundingis an alternative funding source for micro, small and medium-scale businesses in order to finish the problem of funding for an online campaign. The purpose of this research is to describe the alternative funding source of crowdfunding, by knowing the differences of the success in crowdfunding models and the factors that influence the success level in the achievement of crowdfunding model. The result of this research shows that the highest funding is achieved by the equitybased crowdfunding model. The result also shows that there is a difference in the achievement levels of crowdfunding models. The funding target, the total of backers and the minimum sum of investment affect positively in the success of crowdfunding, while the time range of funding does not affect significantly toward the success of crowdfunding model.

Towards Crowdfunding Performance through Crowdfunding Digital Platforms: Investigation of Social Capital and Innovation Performance in Emerging Economies

Sustainability

The current study aims to explore how different owners and investors use digitalcrowdfunding platforms for advertisement and selection of different projects. This connection enhances the number of effective projects and attracts the attention of various entrepreneurs for investment. This research examines the direct impact of the crowdfunding digital-platform on crowdfunding performance as well as the role of the social capital as a mediating variable and innovative performance as a moderating variable. A quantitative approach was used for data collection and analysis. The findings show that digitalcrowdfunding platforms can be predicted through crowdfunding performance. The outcomes show that innovative performance strengthens the relationship between crowdfunding digitalplatforms and crowdfunding performance. This research reveals how fundraisers can improve crowdfunding performance through crowdfunding digitalplatforms, social capital, and innovative performance. Social capital p...

Problems of Data Collection, Processing and Use of Informal Venture Capital

Procedia - Social and Behavioral Sciences, 2014

During the exploration of informal venture capital the authors of the work frequently came across with various definitions of such terms as informal investors and business angels. This research showed that various investigators, organizations and associations have different interpretation of the above-mentioned terms and, accordingly, use them differently. The analysis carried out during this work allows one to confirm that, in process of data collection on the number of informal investors and business angels and its processing, a distortion of data describing the number of business angels takes place in some cases. The problem is that, even if the procedure is correct but the inquiry-making quality is poor, a significant distortion of data is possible. In the authors' opinion, some mistakes in detection of the number of business angels can occur due to different understanding and usage of definition of business angels, and incorrect methods and organization of numeric data collection.

Crowdfunding and Social Entrepreneurship: Spotlight on Intermediaries

Sustainability

This study contributes to the literature by describing how crowdfunding platforms that host social entrepreneurship projects build and preserve legitimacy. We study three intermediaries, analyzing the actions they take to ensure that creators and funders perceive crowdfunding as a trustworthy form of alternative finance. This study shows that the legitimacy that funders ascribe to a project’s social and/or environmental aims is also a source of legitimacy for the intermediaries that promote social entrepreneurship projects. These intermediaries act as agents of social change, using a range of mechanisms to promote projects that seek to create social and/or environmental value in addition to economic value. Our study also has practical implications. We highlight the mechanisms used to reduce potential risks for intermediaries, creators, and funders and ensure their trust in crowdfunding.

CROWDFUNDING Fundamental Cases , Facts and Insights

2021

Crowdfunding involves individuals, typically entrepreneurial oriented or entrepreneurial firms raising capital through online internet platforms from large numbers of small investors. Crowdfunding is a cheap and effective way for entrepreneurs to raise capital at their earliest stages of starting and growing their ideas and products. Part I of this book comprises three chapters. Chapter one briefly refers to aggregate industry statistics on crowdfunding around the world to compare the size of the markets in different countries. Chapter two is an overview of agency and signalling theory in crowdfunding, describes information asymmetries and agency problems in crowdfunding. The aim of this chapter is to provide a framework for working through the data and concepts in the subsequent chapters. Chapter three provides an overview of the empirical methods considered in this book. The description of the statistical and econometric techniques used is intended to be user friendly so that all ...

Informal investors as entrepreneurs

Technovation, 1998

The scarcity of risk capital for start-ups and technology-oriented small firms is an ever-recurring theme in the economic debate. In recent years interest in the informal risk capital market, i.e., private individuals who invest their own capital in small unlisted firms, has grown significantly, but our knowledge about this market is relatively limited. Against this background, the aim of this study is to describe and explain the decision-making criteria used by informal investors when assessing new investment proposals.

Formal and Informal Financing Decisions of Small Businesses

Academy of Management Proceedings, 2019

This study investigates small businesses' financing decisions. Drawing upon asymmetric information theory, institutional theory and relevant literature on cognitive financial constraints, human capital and social capital, we propose a theoretical framework in which financing determinants come from three dimensions: entrepreneurs' individual factors, organisational (firm-level) factors and contextual (institutional) factors. We employ this model to distinguish four types of firms: (1) firms that use no external finance, (2) firms that use informal finance only, (3) firms that use formal finance only and (4) firms that use both formal and informal finance. An empirical test on Vietnamese small businesses shows that factors from all three dimensions are important in understanding small businesses' financing decisions.

Crowdfunding: Some Empirical Findings and Microeconomic Underpinnings

Revue Bancaire et Financière, 2014

This article reviews some recent developments in the study of crowdfunding -i.e., the practice of raising funds through an open call on the Internet. It also shows how microeconomic theory can help us understand some important aspects of crowdfunding that go beyond the finance sphere of the firm. A special attention is devoted to the role and behavior of crowdfunding platforms, which intermediate between entrepreneurs and funders. Throughout the paper, the Belgian market for crowdfunding serves as the main source of illustrations.