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Critical signals of success in reward-based crowdfunding : does experience matter?

by Ahrens, Nicolas Russel

Abstract

Crowdfunding is a novel and promising method of raising early-seed capital for entrepreneurs. By leveraging the Internet, crowdfunding opens up a relatively large number of investors to entrepreneurial ventures. Academic research remains scarce on the subject, particularly in factors that predict fundraising success. Drawing from entrepreneurial selection theory and previous crowdfunding research, this paper accounts for the role of previous founder experience in current crowdfunding video game projects. Using Probit regression analysis, this paper finds that previous crowdfunding experience by a founder is the most influential signal in predicting fundraising success—more so than factors found in previous studies. Furthermore, founders who demonstrate support for other crowdfunding projects increase their probability of success for their own project. This finding raises a case that external motivations for investing exist within the crowdfunding realm. The conclusions in this paper can be of use to crowdfunding investors and platforms, as well as future academic research.

Note

The author has given permission for this work to be deposited in the Digital Archive of Colorado College.

Colorado College Honor Code upheld.

Includes bibliographical references.

Administrative Notes

The author has given permission for this work to be deposited in the Digital Archive of Colorado College.

Colorado College Honor Code upheld.

Copyright
Copyright restrictions apply.
Publisher
Colorado College
PID
coccc:10929
Digital Origin
born digital
Extent
38 pages : illustrations
Thesis
Senior Thesis -- Colorado College
Thesis Advisor
Fullerton, Richard
Department/Program
Department of Economics and Business
Degree Name
bachelor
Degree Type
B.A.
Degree Grantor
Colorado College
Date Issued
2015-05