Raising funds through crowdfunding has experienced an accelerated growth for start-up companies. Moreover, recent literature suggests that crowdfunding has developed from being just a fundraising tool to a versatile marketing tool (Brown et al., 2016). Even though the marketing aspect of crowdfunding has been researched, there are no clear distinctions of explicitly what marketing values a crowdfunding campaign may entail. This study investigates the two dominating crowdfunding approaches for commercialized ventures, namely, reward- and equity-based crowdfunding. A gap in literature has been identified regarding differentiating reward- and equity-based crowdfunding, in terms of what marketing values they encompass from an entrepreneur’s point of view. The authors’ theoretical position comprehends a connection between crowdfunding and marketing values, which the authors aim to investigate through an exploratory approach. The empirical findings are based upon eleven face-to-face, semi-structured interviews with entrepreneurs who has launched a successful crowdfunding campaign and can thereby be considered experts in the field. Through the empirical findings, the authors were able to identify how each approach creates value for the company. The empirical findings suggest that there are convergences and divergences, differentiating reward- from equity-based crowdfunding. This study aims to support and guide entrepreneurs who want to start a crowdfunding campaign by giving the entrepreneurs directions depending on what marketing values they may seek.

Small businesses account for most of all Swedish companies on the market. Difficulties for small businesses to seek capital come from the financial crisis 2008. The global crisis resulted in banks not granting loans to small business as often as before, mainly due to the banks asserting small business as high risks. Small businesses sought therefore alternative financing. The purpose of this study is to obtain a deeper understanding of what the opportunities and limitations that the small companies experience with the usage of crowdfunding as a form of financing and why they choose it over traditional financing options such as bank loans. A case study has been implemented in this paper to study small businesses seeking crowdfunding on the Swedish platform Fundedbyme. The research questions have been studied through a qualitative research with semi-structured interviews. Essential theories that were chosen to analyze this subject was information asymmetry, signaling theory, pecking order theory and previous research. In conclusion the study shows that bank loan was considered as an attractive financing alternative for small businesses because they could get larger sums of capital. Further conclusions were that small businesses chose crowdfunding because they received capital and representatives. However, crowdfunding was regarded as restrictive with unclear legislations and regulations in the crowdfunding market. A combination of crowdfunding and traditional financing form was preferred by most of the companies that was interviewed. / Småföretagen står för majoriteten av alla svenska bolag som finns på marknaden. En förändring på småföretagens finansieringsalternativ har framkommit efter finanskrisen 2008. Den globala krisen gjorde så att banker inte var lika villiga att låna ut till småföretag eftersom de ansågs vara en hög risk. Detta resulterade till att småföretag sökte kapital genom andra finansieringsalternativ som crowdfunding. Syftet med studien är att erhålla en djupgående uppfattning kring möjligheter och begränsningar som småföretagen upplever i samband med crowdfunding som finansieringsform samt vilka skillnader som upplevs av småföretagen mellan crowdfunding respektive banklån som finansieringsalternativ. En fallstudie har framförts i denna uppsats där skribenterna har valt att studera småföretag som söker crowdfunding på den svenska plattformen Fundedbyme. Forskningsfrågorna har besvarats med hjälp av en kvalitativ forskningsansats genom semistrukturerade intervjuer. Studien valde väsentliga teorier för att analysera ämnet. Teorier som valdes var Informationsasymmetri, Signaleringsteori, Pecking order teorin samt tidigare forskning inom ämnet crowdfunding. Studiens slutsatser påvisade att småföretagen ansåg att banklån var ett attraktivt finansieringsalternativ eftersom företagen kunde få in större kapital. Ytterligare slutsatser tyder på att crowdfunding blev vald som finansieringsalternativ för att småföretagen fick både kapital och representanter i företaget. Småföretagen ansåg dock att crowdfunding besitter oklara lagstiftningar och regleringar. Majoritet av småföretagen föredrar en kombination av både crowdfunding och traditionella finansieringsformer.

The current thesis explores a relatively new academic topic – equity-based crowdfunding. The purpose is to examine which quality signals, used by the entrepreneurs in their fundraising process, tend to increase the probability of closing an equity-based crowdfunding campaign successfully. The findings in this thesis serve as an additional contribution to a relatively unexplored topic of signaling in equity crowdfunding. Besides a theoretical contribution, it provides practical insights that may help entrepreneurs and crowdfunding platforms to increase the probability of successful campaign closure. The data for this study was collected from an international crowdfunding platform Fundedbyme.com. The explanatory variables, both continuous and binary, were divided into several thematic groups, while the dependent variable was defined by either successful or unsuccessful outcome of the campaign. The effect of the explanatory variables on the outcome of the campaign was tested with the help of the logistic regression (logit) model. The results showed that crowd investors in the network of Fundedbyme.com use particular quality signals to distinguish between the projects, in fact, both financial signals and more qualitative signals. Increases in the financial signals such as funding goal and price per share affect the probability of success negatively, while the presence of the qualitative signals (received awards and the indication of the non-executive board) contribute to a higher probability of success. Secondly, the results imply some similarities between the selecting mechanism in traditional funding, reward-based and the equity-based crowdfunding. As a third point, this research shows that the presence of a specific selecting mechanism in crowdfunding helps to some extent decrease the information asymmetry and adverse selection in the market of crowdfunding.

Purpose: The study aims to describe and analyze how investors are influenced by information in decision-making processes regarding equity and debt-based crowdfunding. Theories: Elaboration Likelihood Model, Asymmetric information and previous relatable studies.  Method: Qualitative method with semi-structured interviews. Conclusion - The results from the study showed that central factors can lead to debt-based projects and peripheral factors to equity-based projects. The decision-making processes differed in the two different types of crowdfunding according to the security, or uncertainty, of the project. It also turned out that investors preferred debt-based crowdfunding projects. The study also proved the importance of information for the investors differs whether it is a debt- or equity based project.

Studien syftar till att analysera equity- och debt baserad crowdfunding i förhållande till studiens primära teori om elaboration likelihood model (ELM) och hur dess variabler påverkar potentiella investerares investeringsbedömningar. Informationsasymmetri och behavioral finance har inkluderats i studien som två kompletterande delteorier. För att undersöka detta har studien avgränsats till potentiella investerare som geografiskt är bosatta i Stockholms län. Undersökningen har genomförts med hjälp av semistrukturerade intervjuer där totalt elva potentiella investerare har intervjuats. Respondenterna har baserats på ett snöbollsurval. Intervjuerna har skett genom att respondenterna tagit del av fyra scenarion som innehåller variabler kopplade till teorin om ELM. Studiens resultat påvisar att potentiella investerare bedömer samt väljer investeringsprojekt utifrån den centrala vägen i ELM teorin, som karaktäriseras av projektets kvalitet vilken är motsatsen till den perifera vägen som istället belyser elektronisk word of mouth (WoM). / The study aims to investigate how equity- and debt based crowdfunding in relation to the study’s primary theory of elaboration likelihood model (ELM) and its variables effect on potential investors’ investment decision. Information asymmetry and behavioral finance has also been included in the study as two complementary theories. To investigate this, the study has been delimited to potential investors who are geographically resident in Stockholm County. The survey has been conducted using semi-structured interviews, where a total of eleven potential investors have been interviewed based on a chain sampling. The potential investors have been presented four scenarios that contain variables linked to the theory of ELM. The study's findings show that potential investors assess and choose investment projects based on the central path of ELM theory, characterized by the quality of the project and opposite to the peripheral road that instead illuminates the electronic word of mouth (WoM).