What Drives The Funding Success Of Reward-Based Crowdfunding Campaigns? (original) (raw)

1107-SUCCESS DRIVERS OF REWARD-BASED CROWDFUNDING CONCEPTUAL FRAMEWORK AND EMPIRICAL EVIDENCE.pdf

The study aims at analyzing the factors that can contribute to the success of a reward-based crowdfunding (CF) campaign from the perspective of asymmetric information. The success, understood as the achievement of the funding target indicated by the proponent, can be considered as a proxy of the overcoming of information barriers. The latter, in fact, may represent a relevant matter due to the functioning of this non-conventional financing model. In particular, in a reward-based CF campaign, two features may exacerbate the informative gap between the funder and the founder of a new initiative, such as: the lack of personal interaction and the absence of financial intermediaries. Both these factors concur to amplify the liability of newness that normally may limit the legitimation of a new project without track records. Therefore, on the basis of previous literature, this study has identified a set of factors which theoretically may support the success of the campaign towards the crowd. The survey focuses on the Italian context, a country less investigated and characterized by a significant digital divide. In particular, this paper shows that financial factors prevail on other and most popular dimensions like the digital social networks and the signals of the project quality. These findings lead to a less naïve and more rational assessment of success drivers of a reward-based CF campaign.

Sometimes You Win, Sometimes You Learn – Success Factors in Reward-Based Crowdfunding

2016

Crowdfunding has enabled various entrepreneurs, artists and other individuals and organisations to bring projects to life. Despite all success stories, 63% of all projects initiated on the biggest crowdfunding platform kickstarter.com and 46% of all projects initiated on the biggest German crowdfunding platform startnext.com, do not raise enough money to be realised. This study investigates which factors beyond project quality and personal network impact the success of a crowdfunding campaign. Using data collected from startnext.com, we analyse the impact of six factors on the probability of success and provide practical recommendations for initiators. The six factors we analyse are: inclusion of a video, length of project description, communication with backers, curation by a third party, crowdfunding activity of the project initiator and number of rewards. In particular, we show that the inclusion of a video, an intensive communication with backers via blog posts, a history in sup...

Analysis of rewards on reward-based crowdfunding platforms

2016 IEEE/ACM International Conference on Advances in Social Networks Analysis and Mining (ASONAM), 2016

Today, crowdfunding has emerged as a popular means for fundraising. Among various crowdfunding platforms, reward-based ones are the most well received. However, to the best knowledge of the authors, little research has been performed on rewards. In this paper, we analyze a Kickstarter dataset, which consists of approximately 3K projects and 30K rewards. The analysis employs various statistical methods, including Pearson correlation tests, Kolmogorov-Smirnow test and Kaplan-Meier estimation, to study the relationships between various reward characteristics and project success. We find that projects with more rewards, with limited and late-added rewards are more likely to succeed. We also categorize and automatically annotate rewards into fifteen reward item types. We further analyze how different types of reward items are adopted across various categories of projects as well as how they potentially affect project success. We discover that projects with include the previous rewards are most likely to succeed. Also, different categories of projects may employ different best strategies of adopting reward item types to achieve pledging goals. Finally, we verify the efficacy of reward-related information through predicting project success. The result shows that features extracted from rewards help better predict the successes of crowdfunding projects.

Reward crowdfunding campaigns: Time-to-success analysis

Journal of Business Research, 2022

The time-to-success of reward crowdfunding campaigns constitutes a relevant topic that has been neglected in business literature. In this study, we employ parametric and semi-parametric models of survival analysis to identify the determining factors of the duration of success of these campaigns. Based on more than 4,200 reward crowdfunding campaigns, our results are robust for controls and reveal that the campaigns that attain success most rapidly are located predominantly in cities with greater income inequality. These are cities that are characterized by lower fundraising targets and receive a larger number of pledges. In addition, our covariates indicate a non-constant influence on time-to-success during the fundraising period.

Crowdfunding as a formula for the financing of projects: an empirical analysis

Revista Científica Hermes - FIPEN, 2015

Crowdfunding offers enormous possibilities for marketing and communication, given that it facilitates the circulation of new projects, generates audiences and creates a loyal social base. Nevertheless, experiences of crowdfunding can be diverse. The aims of this investigation are threefold; to analyse crowdfunding platforms in Spain by means of quantitative and qualitative research methods (descriptive and relational); carry out a comparative study of the efficiency index of crowdfunding campaigns for profit-making projects as compared with campaigns raising money for social causes; and to propose good practice guidelines listing the key points of a successful campaign. The results obtained indicate that the percentage of successful profit-making campaigns is no higher than that for charitable ones, and that compliance with the key points in the proposed good practice guidelines is more likely to result in a successful crowdfunding campaign.

Financial Returns in Reward-Based Crowdfunding

Social Science Research Network, 2023

We quantify financial returns to backers in reward-based crowdfunding projects on Kickstarter and show that such investments provide profitable opportunities in addition to non-monetary benefits. The average unconditional annualized return is 11.5% and the average return on successful projects is 30%. Hence, backing money near the end of a campaign, when the probability of success is already high, is a profitable strategy. The most attractive is the Design category, where successful projects yield 73%, on average. Short-term projects are more profitable than long-term ones. Financial return is an important type of extrinsic motivation in reward-based crowdfunding, which has generally been neglected in academic literature. Reward-based crowdfunding outperforms other forms of crowdfunding and other common alternative investments.

UNDERSTANDING SUCCESS ACCORDING TO CROWDFUNDING PROJECT'S INITIATORS

Over the past few years, a large number of projects related to entrepreneurship ideas have appeared daily in the media, due to the fact that they were sold as new solutions for companies or gave origin to new companies. These projects were mainly created by individuals who were students, unemployed persons or working people and, consequently, did not have a company of their own and, in most of the cases, also did not have the means to finance their idea. In some situations, the creation of a crowdfunding project presents itself as a convenient and riskless option for funding and this is frequently the reason why some project initiators decide to launch a campaign. The assessment of each campaign depends on the expectations of the project creator, who is in the best position to decide whether it was actually successful. Untangling how a project owner can assess the performance of its project is of major importance, namely when projects are launched by individuals who ultimately carry all the tasks involved in the initiative. This is a field of research within crowdfunding that remains, to the best of our knowledge, under researched. We propose a framework for the analysis of the success of these projects and we test it on six crowdfunding projects launched in Portugal. Our goal is to shed light to the factors that can be used by project creators in the assessment of the performance of their initiatives.

The Characteristics of Bulgarian Reward-Based Crowdfunding Campaigns

Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, 2019

Reward-based crowdfunding is the most popular method for acquiring financial resources directly from potential users. Bulgarian entrepreneurs and small companies have the opportunity to search for funding from international online communities that are active in the biggest reward-based crowdfunding platforms as Kickstarter and Indiegogo. The proposed paper aims to examine the current state and characteristics of the Bulgarian campaigns in Kickstarter, to identify success factors for generating funds and give directions for better performance of Bulgarian entrepreneurs in reward-based crowdfunding.

Equity and Reward Crowdfunding: A Multiple Signal Analysis

International Journal of Economics and Finance

This paper aims to analyse the success signals of initiatives through equity and reward crowdfunding, the two typologies most used by start-ups and SMEs. This article discusses and compares these two models, highlighting the main differences and similarities, by analyzing the factors that influence the success of initiatives through crowdfunding, measured both in terms of amount of funding raised and number of investors that funded the initiatives. The focus is on three sets of signals, venture quality (human capital, information about the establishment and the status of the initiatives), the level of information the company provides to reduce the degree of uncertainty and campaign quality. Using two distinct datasets, one of 235 equity-model initiatives and one of 274 reward-model initiatives, in both cases analyzing projects that have reached (or exceeded) the funding goal, it turns out that venture quality affects in both types, though distinctly, in particular in the reward mode...

A literature review and integrated framework for the determinants of crowdfunding success

Financial Innovation

Crowdfunding is an innovative strategy for financing a new business venture from the general public instead of seeking funds in traditional ways, such as issuing bonds or bank lending. This study aims to identify the determinants affecting the success of a crowdfunding campaign and how different measurements for crowdfunding success, different crowdfunding models, and the selection of subdivided determinants influence the determinants’ impacts on crowdfunding success. We set the disciplines in the search strategy to select studies related to crowdfunding success. Ultimately, 94 empirical papers are selected to reveal the different findings for the determinants of crowdfunding success; based on this information, we construct an integrated framework for future research. There has been much research on project- and creator-related factors; however, many of these factors have inconsistent relationships with crowdfunding success due to varying measurements of success. In particular, diff...