Non-equity Crowdfunding: Funding Success and Dynamics on Hithit Veronika Machová Abstract Non-equity crowdfunding, as an innovative way of financing new ideas, has been growing enormously over recent years. Crowdfunding projects are often characterized by a predetermined monetary goal and the length of the campaign. Furthermore, potential contributors can observe the level of funding provided by others, which suggests that details of previous contributions play an essential role in funding behavior. We obtain data from the Czech crowdfunding platform Hithit, which allow us to empirically analyze the determinants of success and the funding dynamics of crowdfunding projects. Outcomes from several probit regressions indicate that shorter campaigns and campaigns offering private rewards of lower value are more likely to be successful-but these results do not demonstrate causality. A short campaign signals confidence; this positive signaling effect outweighs the marketing- opportunities effect of a long campaign. Applying fixed effects model to panel data, we show that the amount of contributions is negatively associated with the level of funding already achieved, providing evidence of free-riding effect. However, the effect of past contributions is reversed in the final phase of the campaign as the risk of...

The following Bachelor’s thesis explores the different uses of crowdsourcing by private organisations and analyses them internally, in terms of strategic capabilities. The purpose of this Bachelor’s thesis is to show the reader the different internal strategic issues resulting from the use of crowdsourcing by private organisations. The authors focused namely on crowd creation, crowdfunding and crowd voting through three private organisations using one of these types respectively in their business processes. The qualitative research was conducted through a multiple case study design and through interviews for the primary data collection. The results from the research varied from case to case. Firstly, the Ricola case has shown that crowd creation can especially have impacts on its physical strategic capabilities. Secondly, La Biscuiterie Jeannette’s case has indicated that crowdfunding strongly impacts its financial strategic capabilities. Thirdly, the case of Schneider has enabled to highlight on the one hand the growing importance of crowd voting and on the other hand that crowd voting had no major impacts on its strategic capabilities, yet. Finally, this research intended to give inspiration to other researchers into the field of crowdsourcing and its three subtypes. Therefore, this thesis can be a basis for further researches in this field.

Crowdfunding is an online fundraising technique, where individuals or groups ask for contributions from a large number of people, i.e. “the crowd”. Crowdfunding first appeared in 2003 and has doubled its financial scope every year since 2011. Yet, very little is known about it, especially from a societal perspective. In this thesis I have attempted to understand how the organizations surrounding crowdfunding have structured themselves into an organizational filed, and also how “the crowd” might have granted this field special characteristics. This since “the crowd” is an element not earlier taken into consideration when studying field emergence. I have conducted a content analysis with data from 170 crowdfunding platforms and 190 media articles. I found that several events coincided in 2009 and opened up for the emergence of the crowdfunding field, and also that the understanding of crowdfunding’s purpose has shifted since 2003, from culture projects to start-ups. Regarding the special characteristic of the field it seems like the online nature enabled a fierce structuration pace, and also that “the crowd” constitutes an entity that cannot be captured by our traditional understanding of fields. The results suggest that when “the crowd” takes on functions in a field, the functions become invisible, and this has implications for future research regarding organizational fields.

Detta är en kvalitativ studie som syftar till att undersöka i vilken utsträckning ett finansiellt gap ligger till grund för svenska företags användning av lånebaserad crowdfunding, även kallat peer-to-peer-lån. Vidare syftar studien till att kartlägga svenska företags erfarenheter av peer-to-peer-lån i form av dess för- samt nackdelar. Undersökningen utgår från åtta svenska företag med olika erfarenheter av finansieringsverktyget. Som kompletterande empirikälla genomfördes också en intervju med en representant från en av de svenska storbankerna. Studiens teoretiska referensram består dels utav teorier som syftar till att ge en bakgrund till varför företag föredrar att finansiera sig med lån framför externt ägarkapital samt svenska SME’s problematiska förutsättningar för att få banklån. Vidare utgår uppsatsen från tidigare studier på ämnena peer-to-peer-lån och crowdfunding. Studiens slutsats visar på att det i vissa fall förefaller vara ett finansiellt gap som ligger till grund för svenska företags användning av peer-to-peer-lån. Marknadsföring, möjligheten att slippa banken samt att det är ett billigare finansieringsalternativ utgör ytterligare motiv som får företag att välja peer-to-peer-lån som finansieringsverktyg. Fler för- och nackdelar med peer-to-peer-lån identifieras genom studiens intervjuer med de svenska företagen som använt sig av finansieringsverktyget. Att processen är snabb och enkel samt att den ställer lägre krav vid ansökan om kapital jämfört med andra finansieringsverktyg är de två fördelar som flest respondenter i studien uttryckte med peer-to-peer-lån. Att peer-to-peer-lån är ett offentligt finansieringsverktyg var den nackdel som upplevdes som störst för det företag som medverkade i uppsatsens undersökning.

Crowdfunding är en ny metod för att finansiera företag och projekt som under senare år börjat få momentum. Genom att använda kunskapen och kapitalet hos ”crowden” finansieras idag projekt som tidigare inte ansetts hållbara. Centralt inom alla finansieringsformer är förtroendeskapandet mellan intressenterna, dock finns inga tidigare studier kring hur crowdfundingföretag skapar förtroende till entreprenörer och finansiärer. Syftet med vår uppsats är följaktligen att utröna hur crowdfundingföretag hanterar och arbetar med förtroende mot entreprenörer och finansiärer. Totalt har sju intervjuer genomförts varav fyra var med grundare till ledande aktörer på den svenska marknaden för crowdfunding. Resultatet i studien visar på att crowdfundingföretagen arbetar med att överkomma den informationsasymmetrin som råder gentemot finansiärer och entreprenörer genom ett aktivt arbete med relationsskapande och transparens gentemot dessa. Samtidigt slås även fast att användandet av legala och tekniska strukturer för att uppnå ett förtroende inte är genomgående för de undersökta aktörerna.

With the rise of technology and finance, crowdfunding has been uprising as a popular method of financing projects. Kickstarter provides an online platform in which anyone with Internet access can upload their own project “pitch” to gain funding for their idea on an all-or-nothing model. My thesis explores financial trends and factors that potentially contribute to a successful Kickstarter campaign within the classical music projects subcategory. I use a logistic regression and the Ordinary Least Squares model to examine a dataset of already successfully funded projects and a second dataset that contains both successfully and unsuccessfully funded projects that were tracked over a period of time. Additionally, I collected text files of the word content on all projects to identify most frequently utilized words for the successful and unsuccessful files. Controlling for other characteristics, the key findings are that projects with higher target funding levels are both less likely to fund and fund at a lower percentage of the target, projects receiving more comments are more likely to fund, and projects proposed by those that fund other projects are more likely to fund. In addition, certain words are correlated with success or failure. However, since the method of identifying important words used data mining rather than just testing, we cannot predict that these words would increase the likelihood of success in future projects. Due to limited sample size and high correlations among the variables in specifications including both the project characteristics and words, the main results for each set of explanatory variables used separately tend to become statistically insignificant. Additionally, the funding pattern over time appears not to exhibit the herding behavior found in some asset pricing markets. This is an interesting finding given the highly social nature of funding via Kickstarter.

The purpose of this research was to examine what motivates and influences an individual to invest in a project or company through equity-based crowdfunding. The intention was therefore to identify internal and external motivation factors and examine how external social factors such as the Internet, other individuals’ investment decisions and interaction in social groups affect an individual when he or she invests through equity-based crowdfunding. The results showed that both internal and external motivation factors are important components of an investment through equity-based crowdfunding. External motivators proved to be for example yields and helping entrepreneurs. The study showed that the internal motivators that drive an individual to invest through equity-based crowdfunding include the sense of excitement, pleasure and that the investment coincides with the own interests. The study also showed that the Internet primarily affect investors through an unrestricted flow of information and access to a social interaction. Even other individuals' investments, as an external social factor, were shown to have an impact on the study's respondents when they invest through equity-based crowdfunding. In addition, the study showed that the interaction in a close circle of friends can influence individuals in their investment decisions through equity-based crowdfunding.

Online equity crowdfunding is a way for entrepreneurs to raise capital that has exploded in popularity in recent years. Information asymmetry and poor investor protection are threats for the long-term legitimacy of equity crowdfunding. In this study we examine the quality of the financial information shared on the crowdfunding platforms, since it is what investors have to rely on when making investment decisions. We evaluate the financial information both quantitatively and qualitatively to assess the quality in terms of accuracy and adequacy. More specifically we examine the financial forecasts primarily with quantitative methods and valuation primarily with qualitative. In total, we examine 22 companies on the Swedish equity crowdfunding platform FundedByMe. The financial forecasts are compared with the outcome from the income statements to find out if they are systematically biased. The results show that the financial forecasts are systematically overestimated. Based on previous research we have suggested two explanations for the overestimations; either overconfidence bias and/or strategic behavior. We also find the information regarding assumptions and methods used in the valuation to be inadequate. We perceive that investors needs higher quality financial information in terms of accuracy and adequacy to make well-formed investment decisions. Our recommendations are therefore to regulate equity crowdfunding further and impose higher demands on information quality. Otherwise equity crowdfunding will possibly end up as a market of “lemons”.

Submitted by Ricardo Felipe Ferreira Rodrigues (ricardofrodrigues@outlook.com) on 2015-03-11T16:35:08Z No. of bitstreams: 1 Factors influencing consumer decision in crowdfunding - Ricardo Rodrigues.pdf: 1046563 bytes, checksum: ad03eeb60324680eae34c145383dea0a (MD5) / Approved for entry into archive by Luana Rodrigues (luana.rodrigues@fgv.br) on 2015-03-11T17:20:55Z (GMT) No. of bitstreams: 1 Factors influencing consumer decision in crowdfunding - Ricardo Rodrigues.pdf: 1046563 bytes, checksum: ad03eeb60324680eae34c145383dea0a (MD5) / Made available in DSpace on 2015-03-11T17:27:25Z (GMT). No. of bitstreams: 1 Factors influencing consumer decision in crowdfunding - Ricardo Rodrigues.pdf: 1046563 bytes, checksum: ad03eeb60324680eae34c145383dea0a (MD5) Previous issue date: 2015-02 / Crowdfunding is a recent and emerging method of raising capital for the development of projects (both profit and non-profit oriented) without traditional intermediation of financial institutions, freeing entrepreneurs from the costs, regulation and paperwork associated with it. Besides, it is also a method of pre-testing new products to a selected and enthusiastic audience. The objective of this dissertation is to understand what factors are influencing the consumer decision to fund projects. The literature review contributes with: (1) intrinsic factors, like desire for patronage; (2) extrinsic factors, like presentation of the project; and (3) social pressure. There are also factors associated with current level of funding and number of funders, as well as type of project involved, being it charity or not. Moreover, attitudes also play a role into affecting the decision to fund. To answer the research question, a two phase methodology was used: a qualitative survey that captured intention to fund and motivations from different interviewees, in order to build up a decision process that encompassed all possibilities described by the literature. After the qualitative survey, a quantitative research was employed to validate the insights generated by the qualitative phase and collect further data in order to generate the association between intention to fund and behaviors. Among the insights generated by the qualitative phase were the fact that most funders had the primary motivation to buy the product being offered as if they were pre-ordering. However, this was not the main reason for the charity funder. Additionally, the respondents that pre-ordered products did so for the single reason that these products sufficed needs that they had. These needs greatly varied, from missing traditional old games to solving a wallet organization problem. Another characteristic of the pre-orders is that they would not give small pledges, for the sole reason that they would not receive the product in exchange. Rewards played a big role into luring the respondents in funding more than they previously considered. This was also true for the charity donor respondent, who also donated more. The quantitative phase confirmed the insights above and generated extra information on association and categories. Charity and Art projects concentrated the majority of respondents saying that the reason to invest was basically helping to develop the project without demanding material reward in exchange. However, other projects such as Music also presented high numbers of donation-like behavior, possible given the emotional involvement between funder and artist. Other categories presented a mix of reasons to fund or skewed towards buying the product only, which can be explained by rewards effects and the fact that the categories involved are basically selling products. The quantitative survey also confirmed the main sources used to get to know the projects: recommendation and forums and blogs were also in this survey the main sources used. Another outcome of this phase was the development of factors through attitudinal statements that could explain the intention to fund. Six factors were created, namely Enthusiasm (for crowdfunding), Exclusivity (buying rewards), Charitable (small pledges to help funding), Caution (similar to the diffusion of responsibility, that is, waiting for more funders to give the first step), Intimacy (project was recommended or emotional attachment to the creator) and Sharing (actively sharing in order to also help bring more funders to finish the project). Categories that have high emotional involvement presented association also with intimacy, like music, film and technology. Given the fact that the sample did not have many enthusiastic for crowdfunding, this factor did not show any association with any categories. Categories that do not provide products in return, such as food and photography, presented high levels of association with the charitable factor. Sharing is highly associated with technology, given the fact that this category concentrates respondents that are more innovation-driven and enthusiastic about the product, so they need to share and generate word of mouth in order to help reach the funding goal. / Crowdfunding é um método recente e emergente de captar dinheiro para desenvolvimento de projetos (tanto orientados a lucro ou não) sem a intermediação tradicional de instituições financeiras, liberando empreendedores de custos, regulações e burocracia associada a essa prática. Além disso, também é um método de pré-testar novos produtos com um público selecionado e entusiasmado. O objetivo dessa dissertação é entender que fatores estão influenciando a decisão do consumidor de investir em projetos. A literatura contribui com: (1) fatores intrínsecos, como desejo de patronagem; (2) fatores extrínsecos, como a apresentação do projeto; e (3) pressão social. Há ainda fatores associados com o nível atual de captação e número de investidores, assim como tipo de projeto envolvido, sendo ele de caridade ou não. Além disso, atitudes também possuem um papel em afetar a decisão de compra. Para responder a pergunta de pesquisa, uma metodologia de duas fases foi usada: uma entrevista de profundidade para capturar intenção de investir e motivação, de forma a construir um processo de decisão que englobasse todas as possibilidades descritas pela literatura. Após essa pesquisa qualitativa, uma pesquisa quantitativa foi feita para validar as informações coletadas pela fase anterior e coletar dados adicionais para gerar uma associação entre intenção de investir e comportamento. Dentre as informações geradas pela fase qualitativa, temos o fato que a maioria dos investidores tiveram como principal motivação a compra do produto sendo oferecido como se eles estivessem participando de uma pré-venda. Entretanto, essa não foi a principal razão para o investidor de caridade. Além disso, os respondentes que pré-compraram os produtos o fizeram para única razão que esses produtos satisfizeram desejos que tinham. Esses desejos variavam, sendo desde saudade de jogos antigos como resolver um problema de organização da carteira. Outra característica da pré-compra foi que eles não investiam valores simbólicos, pela razão que se o fizessem não receberiam o produto em troca. Recompensas tiveram um grande papel em atrair os respondentes para investimento em valores maiores que consideravam anteriormente. Também é verdade para o investidor em caridade, que também doou mais. A fase quantitativa confirmou as informações acima e gerou informação extra sobre as categorias de produto. Projetos de caridade e arte concentraram a maioria dos respondentes que disseram que a principal razão para investir foi basicamente ajudar a desenvolver o projeto sem demandar um produto em retorno. Entretanto, outros projetos como Música também apresentaram altos números de comportamento caridoso, possivelmente por causa do envolvimento emocional com o artista. Outras categorias apresentaram um mix de razões para investir ou enviesado a comprar o produto apenas, o que pode ser explicado pelo efeito de recompensas e pelo fato que essas categorias estão simplesmente pré-vendendo produtos. Essa pesquisa também confirmou as principais fontes usadas para conhecer mais sobre os projetos: recomendação pessoal e blogs e fóruns. Outro resultado dessa fase foi o desenvolvimento de fatores a partir de frases atitudinais que puderam explicar intenção de investir. Seis fatores foram criados: Entusiasmo (por crowdfunding), Exclusividade (compra de recompensas), Caridade (doações pequenas para ajudar o desenvolvimento do projeto), Cautela (similar à difusão de responsabilidade, isto é, espera por mais investidores para dar o primeiro passo), Intimidade (projeto foi recomendado ou há ligação emocional com o criador) e Compartilhamento (compartilhar para ajudar a trazer mais investidores para o projeto). Categorias com alto envolvimento emocional apresentaram associação com Intimidade, como música, filme e tecnologia. Dado o fato que a amostra não continha muitos entusiastas por crowdfunding, esse fator não apresentou qualquer associação com as categorias. Categorias que não entregam produtos em troca, como comida e fotografia, apresentaram altos níveis de associação com o fator caridade. Compartilhamento é altamente associado com tecnologia, dado o fato que essa categoria concentra os respondentes que são mais orientados à inovação e entusiastas sobre o produto, então precisam compartilhar e gerar boca-a-boca para ajudar a atingir a meta de investimento.

Essa dissertação problematiza os discursos relacionados à ideia da colaboração dentro das práticas de Crowdfunding nos sites Catarse e Benfeitoria. A partir da perspectiva ético-estética, acompanhada de teorias relacionadas à Sociedade de Consumo e à Sociedade de Controle, realizo a análise através de três eixos de discussão: a colaboração entre o coletivo e os indivíduos; a colaboração entre indivíduos empreendedores; a colaboração como prática de liberdade e experiência política. A partir dessas reflexões, concluo que devem ser relativizadas e desnaturalizadas as ideias que dicotomizam coletivo e sujeito e que propõem a liberdade e a experiência política como produtos acessados por indivíduos que devem possuir características de empreendedores, pois este modelo de financiamento exige muitas vezes que se reproduza mecanismos de subjetivação hegemônicos, mas não deixa de possuir potência como dispositivo de oxigenação e de criação de novos territórios de resistência. / This dissertation discusses the discourses related to the idea of collaboration within the practices of the Crowdfunding websites Catarse and Benfeitoria. From the ethical-aesthetic perspective, accompanied by theories related to the Consumer Society and the Society of Control, analyze through three axes of discussion: the collaboration between the collective and the individuals; collaboration among enterprising individuals; collaboration as a practice of freedom and political experience. Based on these considerations, I conclude that must be relativized and denaturalized ideas that dichotomize collective subject and which propose freedom and political experience as products accessed by enterprising individuals because this funding model often requires the production of hegemonic subjectivity mechanisms, but it still has power as oxygenation device and can create new areas of resistance.