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A hierarchical structure model of success factors for (blockchain-based) crowdfunding
Published in Massimo Ragnedda, Giuseppe Destefanis, Blockchain and Web 3.0, 2019
Felix Hartmann, Xiaofeng Wang, Maria Ilaria Lunesu
During the last decade, many authors focused on crowdfunding success factors. Success factors are intrinsic to each crowdfunding project, and those fulfilled can lead to a successful campaign. There exist several, often controversial, studies on success factors in crowdfunding. Crowdfunding can be categorized in two main models: nonfinancial crowdfunding (reward and donation) and financial crowdfunding (equity, royalty and debt). Investors in financial crowd-funding platforms are different than the ones contributing to nonfinancial crowdfunding (Belleflamme et al., 2014). Financial crowdfunding backers do typically expected gains due to an increase in the value of their investments, as opposed to the potential reward, recognition or tax deduction in the case of nonfinancial crowdfunding.
Venture Capital is Dead in a PCE World
Published in Boyd Cohen, Post-Capitalist Entrepreneurship, 2017
Crowdfunding has emerged in recent years as a powerful force that has demonstrated the power of more distributed models for our economy. Even in the market economy, where most crowdfunding platforms operate, the crowdfunding model by nature is distributed and generally peer to peer. Instead of relying on a single, or a few, angel investors or venture capital firms to invest in an enterprise, crowdfunding allows aspiring entrepreneurs the opportunity to gain access to needed financial resources from the crowd. There are numerous types of crowdfunding models, such as peer-to-peer lending, equity-based crowdfunding, and what is commonly referred to as rewards-based crowdfunding.* Across all these types, in 2015, 34 billion (USD) was raised globally via crowdfunding platforms with $25 billion going for P2P lending, $5.5 billion in reward-based crowdfunding, and $2.5 billion in equity-based crowdfunding.8 Crowdfunding is likely to not just have a continuing impact in the developed world but also could reach nearly 100 billion (USD) annually by 2038.9
Fraud-Resistant Crowdfunding System Using Ethereum Blockchain
Published in Sandeep Kumar Panda, Ahmed A. Elngar, Valentina Emilia Balas, Mohammed Kayed, Bitcoin and Blockchain, 2020
Crowdfunding [1,2] is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. Crowdfunding is a form of crowdsourcing and alternative finance. In 2015, a worldwide estimate totaling over US$134 billion was raised by crowdfunding. Although similar concepts can also be executed through mail-order subscriptions, benefit events, and other methods, the term crowdfunding refers to Internet-mediated registries. This modern crowdfunding model is generally based on three types of actors: the project initiator who proposes the idea or project to be funded, individuals, or groups who support the idea, and a moderating organization (the “platform”) that brings the parties together to launch the idea, which is raising small amount of funds for a project from large people via Internet. It is an alternative form of finance. It supports entrepreneurship and bring the innovative ideas of people into life [2]. Although similar concepts can also be executed through mail-order subscriptions, benefit events, and other methods, the term crowdfunding refers to Internet-mediated registries. This modern crowdfunding model is generally based on three types of actors [1]: the project initiator who proposes the idea or project to be funded, individuals or groups who support the idea, and a moderating organization (the “platform”) that brings the parties together to launch the idea. There are so many crowdfunding platforms in which Kickstarter [3, 4] is one of the most famous and widely used platforms. The Kickstarter is taken as a case study and explains its functioning and issues with it.
Factors Affecting Crowdfunding Success
Published in Journal of Computer Information Systems, 2023
Zhunzhun Liu, Shenglin Ben, Ruidong Zhang
Crowdfunding can generally be classified into four different types: reward-based, debt-based, donation-based and equity-based. They are defined as shown in Table 1. In this paper, out of the 53 qualified studies selected, 22 were reward-based, 10 were equity-based, 5 were donation -based, 1 was debt-based, and the rest were unknown with information not clearly provided in their respective studies. The main stakeholders in a crowdfunding project include fundraisers, investors, and crowdfunding platform operators. Besides stakeholders, another important category is the project itself. Each crowdfunding project has its own set of characteristics or attributes, and they need to attract potential investors’ attention with high-quality project signals. Factors related to project itself, like characteristics including the project’s type of product or service, project location and fundraising duration, contribute to crowdfunding success.
Matchmaking in reward-based crowdfunding platforms: a hybrid machine learning approach
Published in International Journal of Production Research, 2022
Shaojian Qu, Lei Xu, Sachin Kumar Mangla, Felix T. S. Chan, Jianli Zhu, Sobhan Arisian
Amongst the different types of crowdfunding, reward-based crowdfunding has become a dominant source of start-up financing in China and other countries (Fleming and Sorenson 2016; Cornelius and Gokpinar 2020). Under reward-based crowdfunding, creators initiate crowdfunding projects on a platform website and publish the project information, such as the detailed content, target amount, and deadline. Potential backers purchase the proposed products in advance and provide financial support. The project is considered successful when the fund raised meets the funding target and the entrepreneur delivers the product or service to the backers; otherwise, the project is regarded as a failure (Kumar, Langberg, and Zvilichovsky 2020). Despite its advantages, reward-based crowdfunding is known to have a low success rate. The performance of Kickstarter,1 the largest crowdfunding platform, has been declining since its launch in 2009. This decline occurs even though most entrepreneurs consider crowdfunding as a main alternative to raise their required funds (Mollick and Nanda 2015). One of the possible causes of the underperformance of crowdfunding platforms is the inefficiency of their matchmaking feature (Wu et al. 2018).
Technological boundary-spanning search, crowdfunding interaction and crowdfunding innovation performance: a mediated moderation model of knowledge sharing
Published in Enterprise Information Systems, 2021
Wenqing Wu, Xuan Huang, Chia-Huei Wu, Sang-Bing Tsai
Crowdfunding, as a new method of financing ventures that provides an alternative to traditional financing methods such as angel investors, loans, venture capital and stocks, allows an entrepreneur to raise funds from the public in the form of an open call (Belleflamme, Lambert, and Schwienbacher 2014). Compared to traditional financing methods which traditional investors invest large amount money in one project, crowdfunding refers to that each individual provides only a small amount of money for each crowdfunding project. Besides, crowdfunding backers are not as professional as traditional investors. Another difference is that the Internet has more crucial effects on crowdfunding projects success, which is unnecessary for angel investment (Li et al. 2017).