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Article
Publication date: 4 August 2020

Maya Puspa Rahman, Mohamed Asmy Mohd Thas Thaker and Jarita Duasa

Crowdfunding has become one of the preferred mechanisms to raise funds by startups and small entrepreneurs. As such, this paper aims to develop an appropriate framework for…

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Abstract

Purpose

Crowdfunding has become one of the preferred mechanisms to raise funds by startups and small entrepreneurs. As such, this paper aims to develop an appropriate framework for Sharīʿah-compliant equity-based crowdfunding (SEC) for entrepreneurship development in Malaysia.

Design/methodology/approach

The research begins by analyzing the intention of 200 entrepreneurs in Kuala Lumpur and Selangor regarding the use of crowdfunding to raise capital. The analysis is based on the theory of reasoned action (TRA), which is also associated with the technology acceptance model (TAM) and is effected by using structural equation modeling (SEM).

Findings

The entrepreneurs agree on the ease of use of crowdfunding in raising capital, although it appeared that they are quite reluctant to share their business ideas online. Subsequently, an SEC framework is proposed, to further enhance entrepreneurship development in Malaysia particularly in meeting the need for raising funds in line with Sharīʿah (Islamic law) principles.

Practical implications

This paper aims to contribute more to the development of a blueprint for an SEC platform for market players and regulators in Malaysia.

Social implications

This paper also aims to highlight the growing needs of entrepreneurs, particularly in Malaysia to have a Sharīʿah-compliant alternative to raise funds via crowdfunding.

Originality/value

This paper makes two main contributions. First, it provides evidence on Malaysian entrepreneurs’ intention to use crowdfunding for fundraising through TAM and SEM analysis. Second, it proposes an SEC framework for the development of entrepreneurs in Malaysia.

Details

ISRA International Journal of Islamic Finance, vol. 12 no. 2
Type: Research Article
ISSN: 0128-1976

Keywords

Article
Publication date: 11 October 2022

Mark Anthony Camilleri and Stefano Bresciani

This contribution aims to evaluate key theoretical bases that were used in previous research, to investigate the use of crowdfunding platforms by small businesses and startups. It…

Abstract

Purpose

This contribution aims to evaluate key theoretical bases that were used in previous research, to investigate the use of crowdfunding platforms by small businesses and startups. It presents the findings from a systematic review to better explain the pros and cons of utilizing these disruptive technologies for crowdsourcing and/or crowd-investing purposes.

Design/methodology/approach

The researchers adopt the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) methodical protocol to search, screen, extract and scrutinize seventy-two (72) articles that were indexed in both Scopus and Web of Science. They examine their research questions, describe their methodologies. Afterwards, they synthesize the findings from previous literature, outline implications and discuss about future research avenues.

Findings

A thorough review of the relevant literature suggests that there are opportunities as well as challenges for project initiators as well as for crowd-investors, if they are considering equity crowdfunding, peer-to-peer (P2P) lending and rewards-based crowdfunding platforms, among others, to raise awareness about their projects and to access finance from crowd-investors.

Research limitations/implications

Further research is required on this timely topic. There are a number of theories relating to technology adoption and/or innovation management, strategic management, accounting and financial reporting, and normative/business ethics, among other research areas, that can be utilized as theoretical bases, to explore this topic.

Practical implications

Crowd-investors are striving in their endeavors to find a trade-off between risks and rewards associated with crowd-financing.

Originality/value

Currently, there are few systematic reviews and conceptual articles focused on the crowdfunding of small businesses and startups. Hence this contribution closes this gap in the academic literature. Moreover, it links the extant theory to practice. It clarifies that the resource-based view theory of the firm, the theory of planned behavior, the diffusion of innovations theory as well as the signaling theory, among other conceptual frameworks, can be used to investigate different facets of crowdsourcing and crowd-investing.

Details

European Journal of Innovation Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1460-1060

Keywords

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