Crowdfunding Platforms Dynamics

This chapter compares two national crowdfunding markets based on their platforms and regulatory legislation on crowdfunding. Spain and France were selected though a cluster analysis since both differ on those characteristics. Mean comparison tests were carried out to estimate differences. Data were based on a survey specifically designed and conducted for this research. While crowdfunding is an internet-powered activity with global accessibility, national boundaries and geographic proximity play a significant role in shaping the performance of crowdfunding platforms. Regarding practical implications, as each country developed its specific legislation, it is concluded that this legislation may boost or hinder the growth of crowdfunding. On the other hand, the different way platforms managed their business does not affect their outcomes in terms of number of projects and funds raised. As a result, although platforms are indispensable as an intermediate agent between funders and investors, they determine neither the number of projects hosted nor the funds raised.

Investors' Motivations in Different Types of Crowdfunding

Although the crowdfunding (CF) sector is booming, research focusing on motivation of contributors is mainly exploratory and does not propose an analytical model. This chapter aims to propose a typology of differentiated motivations according to the type of CF. The main results, authentic compared to the existing literature, show that types of motivation are not the same depending on the type of CF considered. These findings provide significant practical guidelines for three major actors of a CF process: CF platforms must communicate according to the segmentation resulting from the respective predominant motivations. Project leaders should go beyond the simple utility and inform contributors according to the life of the project and its segmentation and the required technical tools of contribution. Contributors share personal ties and observe how the projects succeed regarding loan with interest; therefore, certain motivations, found in this research, such as pleasure of contributing, living experiences, and supporting creators should not be put forward in all the CF campaigns.

Crowdfunding

Thanks to the spread of internet technologies, there has recently been a significant upsurge of innovative forms of human cooperation. In an ecosystem characterized by unsteadiness and parceled relations, crowdfunding has quickly become one of the most popular expression of the new wave of the sharing economy philosophies. Although it is undeniable that the success of crowdfunding has increased during a dramatic financial period, characterized by a wide-ranging credit crunch, we can't interpret this phenomenon just as a fade or as a side effect of the economic crisis. However, through a multidisciplinary approach of analysis and through a qualitative explorative research it will be possible to observe what type of solidarity this system is currently promoting.

Crowdfunding

In this chapter, the research deals with NGOs and their current weight in state's development and public conditions improvement. The researcher also goes to connect the financial challenging faced by NGOs and how the use of crowdfunding platform is important specifically to solicit funding to start, continue, and expand its works. The chapter will highlight the crowdfunding models suitable for NGOs specifically crowdfunding and NGOs in developing countries with describing crowdfunding policies and regulations. Through that, the researcher helps in shaping best practices based on NGO success stories. This chapter will also review previous studies and statistics as a guide for the researcher to present crowdfunding as a tool for the non-profit sector.

The Power of Words in Crowdfunding

In this chapter, the authors first provide an overview of the crowdfunding phenomenon. Through the literature review of crowdfunding success factors in the four models, the authors then summarize that the current entrepreneurial research focused on success factors has failed to sufficiently examine how the power of words would affect crowdfunding. Therefore, the authors propose that non-verbal and verbal cues are crucial to entrepreneurial financing success. Based on the insufficient research related with those cues, especially the non-verbal ones, the authors open an area of study on non-verbal and verbal cues in the entrepreneurial financing process by conducting and writing this chapter.

Characteristics of Successful Securities Crowdfunding Campaigns in the United States

Title III of the Jumpstart Our Business Startups Act (JOBS Act) enacted by the U.S. Congress enables a new crowdfunding source of investment capital for entrepreneurs and a new opportunity for all investors (Regulation CF). Given the information asymmetry, the SEC requires that managers provide information to investors (Form C). Using this information, this research tests whether business attributes, financial risks, and offering characteristics are associated with successful crowdfunding efforts for 277 offerings originating during 2016-2017 and closed as of May 2018. The following attributes are positively correlated with funding success: product idea; prior managerial experience with startups; financial risks reported by management; availability of an independent CPA review; and, especially for companies reporting revenue, accounting risk measurements. Finally, the funding intermediary chosen is important and some were more successful than others. Overall, the results provide new insights concerning characteristics of successful security-based crowdfunding offerings.

Is an Offline Sharing Economy Innovation Transmissible Online?

Group lending is a social innovation because the substitution of the guarantee on assets by the collective guarantee of the group of belonging leads to the financial inclusion of the excluded. In a lending group, members who know each other mutually control each other to guarantee repayment of the loan and its circulation among the members. Is the social collateral that supported the development of the offline microcredit to the world level transposable to social lending on the internet? To answer this question, this chapter aims at determining the factors of mutual supervision and control of the members within the affiliation group and examine the potential of their transposition on the internet. Understanding the conditions for transposing social security is not only a solution to the problem of the unbanked; it is also a source of inspiration for peer-to-peer activities which develop considerably on the internet.

An Empirical Study on the Determinants of Success of Crowdfunding Projects

Crowdfunding is a way to finance a project in a short time, but it is not easy to develop a successful project. In this study, the authors investigated success determinants of crowdfunding projects by focusing on different categories and the interaction effect of staff pick and video. The authors used econometric analysis for investigating projects of the crowdfunding platform Kickstarter. They found that the funding goal has a negative influence on the probability of success of the crowdfunding project, but the pledged money has a positive influence on all data and by category. The effect of video for staff pick projects is greater than for non-staff pick projects, in art and comic projects. However, the effect of video for staff pick projects is less than for non-staff pick projects, in craft, fashion, food, games, music, photography, and publishing models. These findings are of high interest for practitioners and researchers in the field and extend the knowledge on crowdfunding platforms in several categories and on interaction effects.

Lending Crowdfunding and Regional Development

By analysing the operations of a lending crowdfunding platform in Portugal, the investigation aims to study the potential contribution of CF for entrepreneurship and regional development. The results reveal that small organisations are especially prone to use CF as a financing strategy, regardless of their seniority, as well as ventures that have a moderated risk profile. However, coastal regions have been more dynamic on CF use than interior located ventures, since most of the operations were realized on the littoral of the country. The results suggest that interior organisations that use CF could have more financing difficulties that led them to look for new fundraising solutions, since they typically have higher size than coastal located organisations, although the risk rating is quite similar. The CF loans period is also shorter. The average interest rate charged is quite similar between both type of locations, although a higher variability exists in the funding conditions of interior organisations. The average offer per investor is also higher in the interior case.

Is Crowdfunding One Way to Pay Education?

Crowdfunding is an innovative, creative tool of distance collaborative funding, which can galvanise an optimal number of people to various potentials, including education. The aim is to understand crowdfunding and its implementation in Portugal, focusing on successful projects and exploring its potential use in literacy and educational projects, as an alternative to resources perceived as ‘classical'. Successful Portuguese projects in education are still underused and under-reported, despite being great allies to innovative, creative educational entrepreneurs requiring swift responses in a post-pandemic future. Is crowdfunding a way to change education?