Journal Article

An empirical investigation of signaling in reward-based crowdfunding

Kunz, Michael Marcin, Erler, Max, Leimeister, Jan Marco, Bretschneider, Ulrich

2017

Overview

Start-ups often face the challenge of a shortage of capital, the so-called funding gap, which can be overcome by raising small amounts of money from a large number of individuals. As crowdfunding suffers from a continuous rise in failure rates, the aim of this article is to contribute to the research concerning success factors in reward-based crowdfunding campaigns by focusing on signaling theory. Based on data retrieved from the crowdfunding platform Kickstarter, our results indicate that social ties, investment preparation and presentation, the supply of multiple rewards as well as endeavors to communicate and interact with the crowd positively influence the probability of success of a reward-based crowdfunding campaign. In contrast, the funding goal, a campaign’s runtime and the estimated time of delivery for the rewards have a negative impact on the successful completion of a campaign.

• Publisher: Springer US,Springer,Springer Nature B.V
• Subject: Analysis / Business and Management / Computer Communication Networks / Crowdfunding / Data Structures and Information Theory / e-Commerce/e-business / Failure rates / Funding / IT in Business / Operations Research/Decision Theory / Run time (computers)