The emergence of crowdfunding could provide novel opportunities for startup companies and potentially transform the nature of entrepreneurship and new firm creation. The prevailing modes of venture financing limit the types of business projects that get funded or limit the range of project choices availability to funder. In contrast, crowdfunding platforms present a diversified array of project choices and funds so that not just mainstream, but also “long tail” effect might prevail. Crowdfunding platforms could connect entrepreneurs and funders, and provide new avenues for entrepreneurs to acquire legitimacy and engage with a broader pool of funders. However, despite the growing volume of research, more insight is needed about (a) what factors and social dynamics explain the ability to attract funding success, and (b) how are the patterns of fundraising related to project success? Using the comprehensive theoretical lens of social network, electronic word-of-mouth, bandwagon effects, entrepreneurship and innovation theories, I address two research questions.In the first essay, I examine the impact of crowds’ and entrepreneurs’ behaviors and online community engagement along with entrepreneur characteristics on fundraising success in crowdfunding platforms. We collect data about startup projects and funders from a reward-based crowdfunding platform in the U.S., as well as additional data from online social network sites and blogs. Our sample includes a total of 722 technology-related projects (March 2012 - January 2013) and more than 177,700 funders. The empirical results show that the networks of interactions among funders as well as the entrepreneurs’ social engagement with the crowdfunding community are key antecedents of funding success. Along with fundraising success in crowdfunding platforms, for start-ups both obtaining financial resources and creating innovation are important for their survival. However, there is lack of attention as to whether successfully funded projects deliver outcomes. In my second essay, I investigate the existing dynamics in fundraising process, and how the fundraising patterns are related to crowdfunding projects performance. The current finding shows the various impacts of fundraising patterns on entrepreneurs’ performance. This study will contribute to crowdfunding and entrepreneurship literature and offer practical implications by providing a comprehensive theoretical framework and the supporting empirical evidence.
Read
