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  • Thumbnail for Critical signals of success in reward-based crowdfunding : does experience matter?
    Critical signals of success in reward-based crowdfunding : does experience matter? by Ahrens, Nicolas Russel

    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.