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Article
Publication date: 6 July 2018

Marc R.H. Roedenbeck and Manfred Lieb

This paper aims to investigate how a small business is able to continually use entrepreneurial financial sources (i.e. crowdfunding) within and after a successful…

Abstract

Purpose

This paper aims to investigate how a small business is able to continually use entrepreneurial financial sources (i.e. crowdfunding) within and after a successful transformation from an entrepreneur. It additionally investigates how a market incumbent is able to successfully join the market of entrepreneurial financial resources.

Design/methodology/approach

Therefore, a comparative case study using qualitative and quantitative data as well as triangulation technique is conducted within the international board game (or tabletop) market at the crowdfunding platform Kickstarter. The US company CMON, which has developed from an entrepreneur to a small business and beyond, is compared with the German incumbent Pegasus. Based on an analysis of a set of key performance indicators suggested in the literature, qualitative and quantitative variables are deductively derived to measure their impact on the financial goal achievement, thereby showing their impact on the goal achievement. During the analysis, additional variables are identified inductively.

Findings

As a result, several qualitative components are found to be crucial, including oral storytelling and computer animated videos/images, a perfect multilingual product language, prototyped components, an active community and a depth and regularity in campaign updates. In quantitative terms, important components include having more product images than longer project descriptions, more optional buys than different but fixed project rewards, a big social network (on Twitter and Facebook), and the number of updates.

Research limitations/implications

Based upon the data and findings, this study invites for more research, especially in conducting a larger scale quantitative analysis using the developed framework to compare more cases within a branch, cases across branches and cases with different background stories.

Practical implications

But to successfully run a crowdfunding campaign, entrepreneurs and incumbents can use the provided measures as a first design- and decision-roadmap, as well as copying the new business strategy of continually practicing crowdfunding for new products.

Originality/value

Despite its limits, this paper offers the first in-depth qualitative and quantitative crowdfunding case study showing on the one hand a new business strategy about crowdfunding as well as providing a structured measure to compare crowdfunding project performance.

Details

Journal of Research in Marketing and Entrepreneurship, vol. 20 no. 2
Type: Research Article
ISSN: 1471-5201

Keywords

Case study
Publication date: 2 July 2018

William D. Schneper and Colin Martin

Pebble Technology Corporation (Pebble) was an early entrant into the smartwatch industry. Pebble’s Founder, Eric Migicovsky, began thinking about creating a smartwatch in…

Abstract

Synopsis

Pebble Technology Corporation (Pebble) was an early entrant into the smartwatch industry. Pebble’s Founder, Eric Migicovsky, began thinking about creating a smartwatch in 2008 while still an undergraduate engineering student. After selling about 1,500 prototype watches, he was accepted into Silicon Valley’s prestigious Y Combinator business start-up program. Finding it difficult to attract investors, Migicovsky launched a crowdfunding campaign that raised a record-breaking $10.27m on Kickstarter. The case concludes shortly after Apple’s unveiling of its soon-to-be-released Apple Watch. The case provides an opportunity to evaluate Pebble’s various strategic options at the time of Apple’s announcement.

Research methodology

The authors observed over 30 h of video and audio recordings of speeches, interviews and other events involving Pebble’s founder, other Pebble executives, investors and competitors. These recordings are all publicly available. Whenever possible, the authors also reviewed the Twitter feeds, Facebook sites and personal websites of Pebble’s top executives over time. Similarly, the authors followed Pebble’s official website, corporate blog and Kickstarter campaign websites. The authors also drew from numerous media reports. Due to the public nature of the data, no company release is provided nor has any information been disguised in any way.

Relevant courses and levels

The case is designed for both undergraduate and graduate students for courses in strategic management.

Book part
Publication date: 20 July 2016

Denis Frydrych, Adam J. Bock and Tony Kinder

This study examines how narratives and legitimacy formation affect crowdfunding capital assembly from distributed, heterogeneous investors.

Abstract

Purpose

This study examines how narratives and legitimacy formation affect crowdfunding capital assembly from distributed, heterogeneous investors.

Methodology/approach

The study explores a dataset of 80,181 projects from Kickstarter, a rewards-based crowdfunding platform, between 2009 and 2013. We explore the link between project-related variables, legitimacy formation and outcomes.

Findings

Entrepreneurs design narratives and create project legitimacy by exploiting crowdfunding platform-specific features. First, lower funding targets and shorter campaign durations confer positive project legitimacy. Second, entrepreneurs exploit reward-levels as narrative tools that encourage funders to engage with the project. Third, visual pitches transmit a broader sociocultural narrative, leveraging emotional rather than financial reasoning. We also note certain gender effects.

Research implications

Crowdfunding platforms allow entrepreneurs to pitch business ideas to a broad online audience. We show that project legitimacy, including both structural and narrative elements, is linked to crowdfunding outcomes. In particular, legitimacy is co-created through the generation of a persuasive narrative linking the entrepreneur and investor cohort.

Practical implications

Entrepreneurs use crowdfunding platforms to generate a coherent narrative around unfamiliar business models. Generic platform tools may be set and manipulated in online crowdfunding pitches to support project legitimacy. Ultimately, these are less important than establishing an affinity-based narrative that engages and exploits investor participation. Successful crowdfunding pitches co-author the project story with investors.

Originality/value

Crowdfunding has been traditionally understood as simply an online-mediated venture resource assembly tool. A narrative framework highlights the critical role of legitimacy formation in a disintermediated investment system.

Details

International Perspectives on Crowdfunding
Type: Book
ISBN: 978-1-78560-315-0

Keywords

Book part
Publication date: 20 July 2016

Liz Gerber and Julie Hui

We are interested in how and why people use or take part to crowdfunding projects.

Abstract

Purpose

We are interested in how and why people use or take part to crowdfunding projects.

Methodology/approach

Over the past four years, we have interviewed over 120 crowdfunding requesters and supporters of over 15 project types from dance to technology to publishing.

Findings

The key contributions of this research are: An understanding of the work involved, an understanding of motivations for participation, and an understanding of how the design of platforms influences engagement.

Originality/value

We adopt a computer-supported cooperative work approach from sociology, computer science, and design to provide a new perspective to researchers who seek to understand user behavior, motivations, and the mechanisms in place to support engagement with crowdfunding technology.

Details

International Perspectives on Crowdfunding
Type: Book
ISBN: 978-1-78560-315-0

Keywords

Book part
Publication date: 28 February 2020

Andy Miah

This chapter examines the catalysts that led drones to become a vast consumer market in a very short space of time. It tells the story of the drone’s resurgence as an…

Abstract

This chapter examines the catalysts that led drones to become a vast consumer market in a very short space of time. It tells the story of the drone’s resurgence as an object of popular desire and how this reflects a certain kind of technotopian allure, which is found more widely in the technological consumer culture. In so doing, it examines the historical origins of the drone across military aviation and musical culture, along with the major achievements in modern civilian drone exploration. The chapter also draws on literature in design theory, historical analyses of drone patents and speculative fictions within product development to articulate the central drivers behind the proliferation of drones in civil society.

Details

Drones: The Brilliant, the Bad and the Beautiful
Type: Book
ISBN: 978-1-83867-985-9

Keywords

Article
Publication date: 10 January 2022

Yun (Yvonne) Yang and Yoon Koh

In 2020, the COVID-19 pandemic had a devastating impact on global health care and the economy. The restaurant industry has been especially hit hard by the statewide…

Abstract

Purpose

In 2020, the COVID-19 pandemic had a devastating impact on global health care and the economy. The restaurant industry has been especially hit hard by the statewide “stay-at-home” orders. To get back on track, many of these businesses need capital. A new and effective form of fundraising for business startups is crowdfunding (CF). However, there has been little research on the pandemic impact on CF. This study aims to fill this gap by investigating the pandemic-related impact on restaurant CF.

Design/methodology/approach

This study extracted all 2,686 restaurant CF projects in the USA from the Kickstarter platform from April 2010 to January 2021. By conducting descriptive analyses and multiple logistic regression models, this study examined the pandemic impact on CF success.

Findings

This study finds that, while controlling the effects of other determinants, businesses in the midst of the pandemic are more likely to be successfully funded than businesses unaffected by the pandemic. Findings also reveal that restaurant startups lowered their funding goals and posted more updates/comments/pledge levels during the pandemic, which made projects more likely to be selected as a “Project We Love” and increased the odds of funding success. However, mentioning COVID-19-related information or locating projects in “red zones” are not found to have any significant direct or moderating impact on the funding success.

Research limitations/implications

This study pioneers the research topic restaurant CF and attempts to raise the research attention of small- and medium-sized enterprises and entrepreneurial financing. Using quantitative methods, it provides a new perspective on pandemic-impact research. Social exchange theory is extended to the context of reward-based CF under crisis. Finally, to the best of the authors’ knowledge, this is the first investigation of the possible moderating effect of project location on the relationship between restaurant CF characteristics and success.

Practical implications

The findings of this study suggest restaurateurs to be confident about the fundraising of their startup business through reward-based CF, even when located within so-called pandemic red zones, and perform appropriate communication strategies while using the reward-based CF.

Originality/value

This study is one of the earliest to examine the main and moderating effects of the pandemic-related factors on business CF in the hospitality realm. The findings are reference for researchers and restaurateurs on fundraising in a crisis context.

Details

International Journal of Contemporary Hospitality Management, vol. 34 no. 4
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 24 July 2020

Lafaiet Silva, Nádia Félix Silva and Thierson Rosa

This study aims to analyze Kickstarter data along with social media data from a data mining perspective. Kickstarter is a crowdfunding financing plataform and is a form of…

Abstract

Purpose

This study aims to analyze Kickstarter data along with social media data from a data mining perspective. Kickstarter is a crowdfunding financing plataform and is a form of fundraising and is increasingly being adopted as a source for achieving the viability of projects. Despite its importance and adoption growth, the success rate of crowdfunding campaigns was 47% in 2017, and it has decreased over the years. A way of increasing the chances of success of campaigns would be to predict, by using machine learning techniques, if a campaign would be successful. By applying classification models, it is possible to estimate if whether or not a campaign will achieve success, and by applying regression models, the authors can forecast the amount of money to be funded.

Design/methodology/approach

The authors propose a solution in two phases, namely, launching and campaigning. As a result, models better suited for each point in time of a campaign life cycle.

Findings

The authors produced a static predictor capable of classifying the campaigns with an accuracy of 71%. The regression method for phase one achieved a 6.45 of root mean squared error. The dynamic classifier was able to achieve 85% of accuracy before 10% of campaign duration, the equivalent of 3 days, given a campaign with 30 days of length. At this same period time, it was able to achieve a forecasting performance of 2.5 of root mean squared error.

Originality/value

The authors carry out this research presenting the results with a set of real data from a crowdfunding platform. The results are discussed according to the existing literature. This provides a comprehensive review, detailing important research instructions for advancing this field of literature.

Details

International Journal of Web Information Systems, vol. 16 no. 4
Type: Research Article
ISSN: 1744-0084

Keywords

Article
Publication date: 1 February 2016

Jake Hobbs, Georgiana Grigore and Mike Molesworth

Crowdfunding has become a significant way of funding independent film. However, undertaking a campaign can be time consuming and risky. The purpose of this paper is to…

5133

Abstract

Purpose

Crowdfunding has become a significant way of funding independent film. However, undertaking a campaign can be time consuming and risky. The purpose of this paper is to understand the predictors likely to produce a film campaign that meets its funding goal.

Design/methodology/approach

This study analyses 100 creative crowdfunding campaigns within the film and video category on crowdfunding website Kickstarter. Campaigns were analysed in relation to a number of variables, followed by a discriminant analysis to highlight the main predictors of crowdfunding success.

Findings

This study finds key predictors of crowdfunding success and investigates differences between successful and failed crowdfunding campaigns. The attributes of these predictors lead us to question the long-term ability of crowdfunding to aid companies poorer in terms of time, financial and personnel resources, and therefore arguably in the greatest need of crowdfunding platforms.

Practical implications

The findings provide insight to practitioners considering the crowdfunding approach and offers knowledge and recommendations so as to avoid what can be naïve and costly mistakes. The findings highlight that crowdfunding should not be considered lightly and can be a considerable investment of resources to be successful.

Originality/value

The analysis of crowdfunding campaigns provides details on the significant predictors of crowdfunding success particularly relevant to creative campaigns. The findings provide a critique of previous claims about the benefit of crowdfunding for creative SMEs.

Details

Internet Research, vol. 26 no. 1
Type: Research Article
ISSN: 1066-2243

Keywords

Article
Publication date: 16 August 2022

Satishwar Kedas and Soumodip Sarkar

Restaurant entrepreneurs are increasingly leveraging crowdfunding as an alternative financing mechanism. In the context of restaurant crowdfunding, studies have identified…

Abstract

Purpose

Restaurant entrepreneurs are increasingly leveraging crowdfunding as an alternative financing mechanism. In the context of restaurant crowdfunding, studies have identified factors related to campaign communication that affect crowdfunding success from the entrepreneurs’ perspective. Integrating a funder perspective, this study aims to investigate the role of the consumption value offered by rewards and builds a value-based understanding of restaurant crowdfunding.

Design/methodology/approach

This study uses a sample of 3,134 restaurant campaigns launched on the Kickstarter crowdfunding platform, and texts of 34,128 rewards were analyzed using a Python program. A hierarchical linear regression approach with a generalized logistic regression model was adopted to test hypothesized relationships.

Findings

Drawing upon consumption value theory (CVT), this study finds that in restaurant crowdfunding, utilitarian value holds a strong inverted-U relationship and participatory value holds a strong linear relationship with crowdfunding success. However, socioemotional value does not have a significant effect on outcomes. This study also finds evidence for positive effects of greater variety, higher number of rewards and lower average pledge level on restaurant crowdfunding success.

Practical implications

This study extends the literature on restaurant crowdfunding by integrating insights on the effects of value offered through rewards. Primarily, this study finds evidence for distinct effects of consumption values for restaurant crowdfunding audience. Practically, this study holds implications for reward menu design and value offering design for restaurant entrepreneurs seeking crowdfunding.

Originality/value

Restaurant crowdfunding has been studied to a limited extent, with extant literature focusing on characteristics of campaign descriptions. The role of rewards is uncovered using CVT and thus a value-based understanding of restaurant crowdfunding is presented.

Details

International Journal of Contemporary Hospitality Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-6119

Keywords

Book part
Publication date: 20 July 2016

Abbey Stemler

The purpose of this chapter is to expose the limitations of the equity-based crowdfunding provisions of the 2012 JOBS Act. These provisions have received much attention…

Abstract

Purpose

The purpose of this chapter is to expose the limitations of the equity-based crowdfunding provisions of the 2012 JOBS Act. These provisions have received much attention because they have the potential to open funding opportunities to countless underfunded entrepreneurs and small businesses. In addition, they can provide everyday investors with new ways to diversify their portfolios. However, the author asserts that the JOBS Act is unlikely to be successful in its current incarnation, because it overly burdens the entrepreneur with reporting and accountability requirements, among other things. The author resolves these issues by articulating a regulatory alternative to the JOBS Act.

Methodology/approach

This chapter reviews the general requirements for equity-based crowdfunding under the 2012 JOBS Act. It also reviews the various approaches individual states and other countries have taken to promote equity-based crowdfunding.

Findings

The existing law and proposed regulations for equity-based crowdfunding under the JOBS Act are overly burdensome and will impair the ability of entrepreneurs and small-businesses to successfully use equity-based crowdfunding throughout the United States. Regulators and other lawmakers need to adopt new rules focused on protecting consumers via spending limits.

Research limitations/implications

Most of the research is based on theory, because the equity-based regulations have not been finalized or implemented at the federal level. However, the United States can learn much from the equity-based crowdfunding efforts of individual states and other countries.

Originality/value

This chapter’s critique is designed to engage lawmakers, regulators, entrepreneurs, and small businesses in a new discussion about equity-based crowdfunding regulations.

Details

International Perspectives on Crowdfunding
Type: Book
ISBN: 978-1-78560-315-0

Keywords

1 – 10 of 358