Do the Social Web 2.0 Media Foster Democratization?

This chapter studies the influence of the Internet and new Web 2.0 technologies on the process of democratization in authoritarian regimes. The objective is to show that the new information technologies are not necessarily helpful to dissident movements and have even some negative impacts on the process of democratization. The author questions the capacity of Internet to transmit political information discusses how the new technologies contribute to the depoliticization of societies by creating passive citizens in authoritarian regimes. This chapter also shows how authoritarian regimes use new information technologies as instruments of control and repression and questions the effectiveness of the new cyber-activism by explaining the structure of the Internet and discussing the capacity of the new technologies in creating political community.

Exploring the Spheres of Crowdfunding

This chapter reviews research and policy literatures on the spheres of crowdfunding. It identifies reward-based, donation-based, equity-based and credit-based crowdfunding with a view to collate relevant information to support crowdfunding knowledgebase and further research. As crowdfunding is a new concept in research literature, it is increasing in popularity in social media, business and research communities. Academic research in crowdfunding is limited and the subject is still evolving as a way of access to finance for seed capital, entrepreneurial projects and other early stage projects. Advanced countries in Europe and North America have recognised the relevance of crowdfunding in varying proportion from one country to another for project fundraising. However, the World Bank confirmed that developing countries are at different stages of recognition of crowdfunding in their policy framework. Although the UK financial regulator, Financial Conduct Authority, has produced a policy statement for crowdfunding and approved some service providers such as crowdfunding platforms, it is still interacting with stakeholders and providing guidance to potential entrepreneurs on the operational models. Crowdfunding is a way of raising small amounts of money from different contributors over the internet for different types of projects. There are huge management implications in the spheres of crowdfunding.

Toward a Typology of Crowdfunding Motivations

Crowdfunding is a modern approach to provide real-time financial assistance to those entrepreneurs who are interested in starting seed ventures. This phenomenon is developing slowly and the financial regulators are considering options to put appropriate checks and balances to regulate these activities. Although the experience of crowdfunding may not be satisfying as it ought to be, but there a sense of willingness on the part of the civil society to participate in crowdfunding as it is associated with a good cause. It is important to note that crowdfunding as a system is being based amongst small and mid-sized income group members. The motivation to support the cause of entrepreneurs is growing as the fund lenders are novice and in the threshold stage of supporting such seed ventures. The motivations of fund lender differ depending on their personal and environmental factors, especially in connection to the emerging laws and mandatory disclosures under the financial regulatory regime. In this paper, the focus is on (i) identification of what motivates fund lenders to support entrepreneurs and the impact of the fund movement.

How do the Crowdfunders Judge the Crowdfunded?

This chapter addresses the reactions from communities of early supporters of companies turning from participative forms of financing to classical venture capital and/or buyouts by blue chip firms. Through the study of two recent cases of major crowdfunding successes, namely Oculus VR, a Californian company which obtained nearly $2.5 Million in an exemplary Kickstarter campaign and was later bought by Facebook for $2 Billion, and Mojang, a Swedish company formed to manage the unprecedented success of a video game, Minecraft, sold to supporters from its unfinished versions, the firm being later purchased by Microsoft for $2.5 Billion. Both of these companies had to manage the changes in the nature of their relationships with their early supporters. This chapter proposes typologies of potentially harmful changes induced by attempts to transform bonding social capital into bridging social capital, as well as countermeasures available to entrepreneur to control the effects of such situations.

In Search of Crowdfunding Business Models

Crowdfunding platforms have substantially increased since 2005 and have supported entrepreneurial projects in response to the low propensity of banking institutions to finance either startups, or poor or young entrepreneurs. However, the theory of strategies and management of crowdfunding is far behind the dynamism of its growth. This shortcoming most likely causes costs and failures, in particular during the current state of increasing competitive pressure in the sector. This paper seeks to construct a general theoretical definition for the concept of a business model and apply it to the P2P social lending on the Internet. Extensive literature is reviewed to construct an archetype business model. The validity of the model will be tested through crowdfunding platforms.

Does Crowdfunding (Creatively) Disturb the Conventional (Banking) Alliances with Support Networks for Financing (Micro-)Entrepreneurs?

Microentrepreneurs need financial capital as well as human and social capital. Banks prefer refinancing microfinance institutions and capacity building organizations rather than dealing with microentrepreneurs directly. In this chapter, we examine if the advent of crowdfunding could disturb such relations. Our research question is “what is the perception of people working in support networks on the changing of the relations between banks, support networks and crowdfunding platforms?” In this chapter, we first provide a background on entrepreneurship and coaching in France, emphasizing the role of the entrepreneurial support networks. Thereafter, we present our research methodology based on semi-structured interviews with managers in these support networks. The findings from these interviews are presented in the third section. We find that while the support networks are aware of crowdfunding initiatives, they do not think it will make a major change to the existing relations. This finding is original because most other research seems flabbergasted by the dramatic speed of development of crowdfunding sites. In the fourth section, we analyze the discourse using Nvivo software. The recommendations that emerge from this analysis point to using crowdfunding more as a tool of image building and communication.

Intermediating Crowdfunding

The principals in business finance transactions most typically are the focus of commentaries and studies. Intermediaries often are forgotten—or at least are of secondary concern. The growing academic and popular literature on crowdfunding exemplifies these larger trends. This chapter focuses broadly on a description of crowdfunding intermediation in a preliminary effort to address this imbalance. Specifically, the chapter focuses most closely on (a) identifying and categorizing the types of intermediaries involved in crowdfunded financings of businesses and projects and (b) making related observations. This exploration of crowdfunding intermediaries: isolates expertise, standardization, and disclosure as key values in crowdfunding intermediation; exposes the central role and critical nature of the crowdfunding platform as a crowdfunding intermediary; and notes certain resulting concerns and considerations. Ultimately, additional research is needed to provide better information and guidance to potential and actual crowdfunding participants, policymakers, and enforcement agents.

Crowdfunding as an Open Innovation for Co-Creation

Crowdfunding is connected to innovation in many ways that go beyond being a new phenomenon in itself. This novel model for financing projects leverages the latest technologies provided by the Internet for purposes such as the creation of online communities and electronic payments. Additionally, the existence of crowdfunding platform helps creators bring their innovative products to the market in an unprecedented manner. Crowdfunding operates as an open innovation model where the middle part of the innovation funnel is open to providers of funds or funders that are involved in all stages of the new product. The purpose of this chapter is to identify and rate the contribution of crowdfunding to date in open innovation processes and, more specifically, its value in co-creation. Some examples of Spanish crowdfunding platforms and innovators are analyzed to illustrate these contributions.

Crowdfunding and Slow Money

Investment is always needed for new business or business development, and we are living with the emergence of new kinds of providers. Alongside banks, funds, or capital markets, efficient funding through people is doable on a larger scale than ever before, thanks in part to the Internet. Crowdfunding platforms and Slow Money are part of this bottom-up trend. In this chapter we compare crowdfunding and Slow Money and by analyzing how they attract people, we discuss their similarities and differences to respond to the research questions. The analysis might help identify potential synergies between the two non-conventional models, and heighten crowd-based solutions of fundraising. This article will identify their fundamentals. More importantly, we will investigate the spirit behind direct funding.

Crowdfunding

Crowdfunding has proved for a very short time to be a powerful tool to stimulate innovative entrepreneurship. Only original and quality projects and ventures that are good enough will be recognized by crowdfunders and get a chance of this alternative option to be funded with the money that will arrive from different parts of the world without any restrictions. Someone once said that the world is a global village, and crowdfunding as an innovative way of financing confirms that such a statement in many ways is true. Only in the last five years, individuals and companies have had the opportunity to raise billions of euros, dollars or pounds through different modalities of crowdfunding. We dare say that crowdfunding is one of the most exciting phenomena of networked globalization of which, however, very little is known. Therefore, this paper will explain several steps of the crowdfounding mechanism, its evolution and dynamics, as well as indicate many advantages of using crowdfunding both in developed and even more in developing countries.