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Pinkow, F., Emmerich, P. (2020). Crowdfunding: the moderating role of the funding goal on factors
influencing project success. In: Dvouletý, O., Lukeš, M., Mísař, J. (Eds.). Proceedings of the 8th
International Conference Innovation Management, Entrepreneurship and Sustainability. University
of Economics, Prague, Nakladatelství Oeconomica. https://doi.org/10.18267/pr.2020.dvo.2378.0
Felix Pinkow, Philip Emmerich
Crowdfunding: the moderating role of the
funding goal on factors influencing project
success
Published versionConference paper |
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
506
CROWDFUNDING: THE MODERATING ROLE
OF THE FUNDING GOAL ON FACTORS INFLUENCING
PROJECT SUCCESS
Felix Pinkow – Philip Emmerich
Abstract
Purpose: The factors determining the success of crowdfunding projects is one of the central
aspects for crowdfunding researchers. Most quantitative approaches recognize the amount of
funds targeted as an important control. However, little is known about the impact of the funding
goal on other factors that impact crowdfunding success. We hypothesize that the effect of
crowdfunding success factors might vary dependent on funding goal level.
Design/methodology/approach: A dataset of 338 crowdfunding projects on the German
crowdfunding platform StartNext, with a vast majority of projects founded in Germany and
a few projects from international European founders, in the years 2015 to 2016 is analysed by
conducting regression analyses controlling for varying funding goal sizes. We use the
dependent variables success, the degree of success, number of project supporters and the
average contribution per supporter and control whether the effect of independent variables such
as comments, updates and social media depend on different funding goals.
Findings: Our study indicates that the impact of the investigated success factors in fact strongly
depends on the goal sizes of crowdfunding projects. By grouping projects into clusters of
varying funding goal sizes, we find that the impact of individual success factors changes and
that the funding goal plays a moderating role for factors impacting project success.
Research/practical implications: These results help both researchers and future entrepreneurs
to better understand supporter behaviour. First, we suggest researchers to include the projects’
funding goals as moderators in most cases especially when assessing success factors for
crowdfunding projects. Second, future entrepreneurs should be aware that factors influencing
the success of a crowdfunding project strongly depend on the set funding goal. Depending on
funding goal, some factors become less relevant whilst other factors’ importance is increasing.
Originality/value: The funding goal of a crowdfunding project determines whether instruments
used by project founders have an impact on their project’s success. Although the funding goal
is a central issue in crowdfunding research, it is often used as independent variable, in contrast
we suggest incorporating it as a moderator for other success factors.
Keywords: crowdfunding, success factors, reward-based, start-up, entrepreneurial financing
JEL Codes: M13, L26, G24
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
507
Introduction
The right choice among the numerous opportunities of financing new businesses is central to
the future development of nascent entrepreneurs’ ideas. Whilst traditional financing forms such
as bank loans or funding by venture capitalists are well-established, crowdfunding emerged in
the last decade as a new possibility to finance ideas on new products, services or technologies.
Among the many forms of crowdfunding, such as equity-based, pure donation-based, or profit-
sharing crowdfunding, this study focuses on reward-based crowdfunding, which refers to
finance ‘a project or a venture by a group of individuals instead of professional parties’
(Schwienbacher & Larralde, 2010, p. 4) who in turn receive ‘some form of reward’ (Mollick,
2014, p. 2) varying from acknowledgments to pre-ordering the final product.
Platforms such as Kickstarter, Indiegogo or StartNext offer a variety of instruments to
promote crowdfunding initiatives, for example the integration of social media platforms,
embedding promotional and illustrative videos from YouTube, and the possibility to interact
with the crowd, the potential contributors (also referred to as backers, funders or supporters).
In this context, crowdfunding platforms act as two-sided markets, connecting project founders
to a potential crowd that can provide the required funding (Belleflamme, Lambert, &
Schwienbacher, 2014). The question how to design such a crowdfunding project, how much
funding is required, and which factors drive the success of a crowdfunding initiative are the key
questions for every entrepreneur considering crowdfunding an option to finance their ideas.
The funding goal determines the amount of funding from the crowd required for a project
to be considered successful and can be set by the project founders. The project founders,
however, only receive the pledged money if the funding goal was reached during the
crowdfunding campaign, otherwise the funding is paid back to the crowd. Factors that impact
the probability of reaching the funding goal are called ‘success factors’, which are central to
crowdfunding research and widely investigated (Beier & Wagner, 2015; Cordova, Dolci, &
Gianfrate, 2015; Kuppuswamy & Bayus, 2018). Thereby, especially the funding goal set by the
project founders was identified to be relevant for success (ibid.), with an increasing funding
level having a negative impact on success probability. However, the question whether and how
the impact of individual success factors varies for projects with different funding goals is often
neglected. Therefore, this study seeks to answer the question which success factors are
moderated by the level of the targeted funding goal and how the impact of success factors varies
for different levels of the targeted funding.
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1. Literature Review
1.1 Crowdfunding Success Factors
Crowdfunding received great research attention during the past years and most studies that
investigate some form of impact on crowdfunding success, regardless of the specific topic,
include factors established by previous research as control variables. Relevant factors which
were assessed for a positive contribution to crowdfunding success in current literature are the
inclusion of pictures and videos on a crowdfunding website (Koch & Siering, 2015), the number
of posted updates and comments from supporters (Beier & Wagner, 2015; Kuppuswamy &
Bayus, 2017), the number of founders of a crowdfunding project (Beier & Wagner, 2015), the
offered rewards (Du, Li, & Wang, 2019; Zhang & Chen, 2019), and the role of social media
(Datta, Sahaym, & Brooks, 2018; Thies, Wessel, & Benlian, 2014). Although the above-
mentioned factors are well-researched, there is no established consensus on their effect. Some
studies for example find that pictures, videos or updates are not relevant for project success
(Cordova et al., 2015; Joenssen, Michaelis, & Müllerleile, 2014), and even the effect of social
media is not yet fully understood and the positive effect on project success is not consistent
across studies (Belleflamme, Lambert, & Schwienbacher, 2013; Koch & Siering, 2015).
1.2 Hypotheses
Previous studies often included the funding goal as independent variable in regression analyses
to assess the impact of different funding levels on success. For example, Cordova et al. (2015)
and Kuppuswamy and Bayus (2017) considered different levels of funding goals, but did not
further elaborate differences or significance levels for projects with different funding goals with
respect to individual success factors. We believe that some ambiguity of the mentioned results
can be explained by controlling for different funding goal levels. While for projects with high
funding goals the use of social media or videos explaining the project idea in addition to the
written project description on a crowdfunding platform may be helpful, it might be different for
projects with very low funding goals. Therefore, H1 is stated as follows:
H1: The funding goal size of crowdfunding projects moderates the impact of success
factors on project success.
H1 will be tested with two different dependent variables: First, projects are separated in
successful and unsuccessful projects. Second, we assess the degree of success, measured by
dividing the total amount of funding by the initial funding goal.
Another aspect of success is the average contribution per backer and the total amount of
backers. Since attracting a sufficiently large crowd and a high contribution per backer can be
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
509
crucial for any project, we test whether success factors also differ between different funding
goal sizes concerning the backers per project and the average contribution per backer. Thus, H2
and H3 are stated as follows:
H2: The funding goal size of crowdfunding projects moderates the impact of success
factors on the backers per project.
H3: The funding goal size of crowdfunding projects moderates the impact of success
factors on the average contribution per backer.
2. Data and Methodology
Data was collected from 338 crowdfunding projects on the German crowdfunding platform
StartNext. Success factors comprise the number of updates, comments, the availability of social
media (Facebook and Twitter), availability of pictures and videos, the number of offered
rewards to backers, the length of the project description and the amount of project founders.
Table 1: Variable Description
Variable Name
Variable Description
Cat1
Category 1: Product-related projects, includes following subcategories: Design, Invention,
Technology, Science
Cat2
Category 2: Artistical Projects, includes the following subcategories: Film, Photography,
Journalism, Art, Literature, Fashion, Music, Theatre
Cat3
Category 3: Social projects, includes the following subcategories: Education, Community,
Event, Social Business, Environment
PIC
Availability of Picture(s) (1=yes, 0=no)
VID
Availability of Video(s) (1=yes, 0=no)
NrUpd
Number of updates on the crowdfunding page
NrCmt
Number of comments on the crowdfunding page
NrRewards
Number of rewards offered to backers on the crowdfunding page
PrjDetail
Number of words used to describe the project, indicating the level of how detailed the
project is described (Note: The number of words is divided by 100 in the regression tables
for illustration)
Goal
Targeted funding goal in €
Success
Project success (1=yes, 0=no)
Raised
Amount of total funds raised in €
DegrSucc
Degree of success = Raised / Goal
Backers
Number of backers of a crowdfunding project
AvrgContr
Average contribution per backer in €
FB
Availability of a dedicated Facebook page for the project (1=yes, 0=no)
TW
Availability of a dedicated Twitter profile for the project (1=yes, 0=no)
Founders
Number of founders of the crowdfunding project as stated on the crowdfunding page
All factors are considered instruments the project founders can determine or influence
during a crowdfunding campaign. The effect of different funding goal levels was tested for the
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
510
probability of success, the degree of success and the backers per project as well as the average
contribution per backer. We employ regression analyses, including robust logit- and linear
OLS-regression and separate four levels of funding goals. Table 1 illustrates the variables used
in this study.
The project categories were included as a control, as explained in Table 1. All conducted
regressions were robust, thereby for Success we used a robust logit-regression and for Degree
of Success, Backers and Average contribution per backer we used robust linear regressions.
The assessed projects were assigned to four categories determined by three different funding
goal thresholds: The 25%-percentile of the funding goal in our dataset at 4000€, the 50%-
percentile at around 7000€, and the 75%-percentile at 15,000€. To compare our results for the
different goal levels to the overall dataset, a regression without separating projects with respect
to goal levels was executed.
3. Results and Analysis
From the 338 examined projects 51.78% were successful with an average funding goal of
13,364.53€ and an average of 7,999.16€ raised per project. Each project posted around
5 updates, had around 11 comments on their crowdfunding page, offered an average of
11 different rewards to the crowd and was supported by 102 backers. 82.54% of all projects
integrated at least one social media platform on their crowdfunding page, 85.80% provided at
least one picture and 97.34% provided at least one video. Table 2 provides the summary
statistics for the investigated projects and Table 3 provides the pair-wise correlations.
Since only 8 projects neither had a video nor any pictures and both variables proved
insignificant with p-values ranging from 0.1 to 0.9, we excluded videos and pictures from the
subsequent analyses. The availability of videos and pictures rather seems to have established as
basic standard for a vast majority of projects and for our case cannot be used to explain
crowdfunding success. The regression results are summarized in Tables 4 to 6, whereby the
first project category (Cat1) is omitted and serves as the comparison group for the other project
categories. The regressions conducted for the average contribution per backer suffered from
low R-squared values ranging from 0.0308 to 0.1538 and F-tests showed a low regression model
fit. Thus, the results indicate that the average contribution per backer cannot be explained by
the examined factors and is not further considered in this study and H3 is rejected.
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511
Table 2: Summary Statistics
Variable
Observations
Mean
Std. Dev.
Max
Success
338
0.517752
0.500426
1
DegrSucc
338
0.762214
0.894979
9.68
Goal
338
13,364.53
23,652.52
280,000
Cat1
338
0.295858
0.457104
1
Cat2
338
0.405325
0.491683
1
Cat3
338
0.298817
0.458418
1
PIC
338
0.857988
0.34958
1
VID
338
0.973373
0.16123
1
NrUpd
338
4.976331
5.353335
36
NrCmt
338
10.53846
15.799
109
Keywords
338
4.630178
0.909515
5
NrReward
338
11.38462
7.690219
101
PrjDetail
338
555.6479
280.6267
1,426
AvrgContr
338
89.14154
141.0363
1,918.25
Raised
338
7,999.163
20,320.32
321,226
DegrSucc
338
0.762214
0.894979
9.68
Backers
338
101.9112
189.7285
1,902
FB
338
0.772189
0.420042
1
TW
338
0.284024
0.451617
1
Founders
338
2.467456
2.382018
21
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
512
Table 3: Correlation Matrix
Success
DegrSucc
Goal
Cat1
Cat2
Cat3
PIC
VID
NrUpd
NrCmt
NrRewards
PrjDetail
Backers
FB
TW
Founders
Success
1
DegrSucc
0.6819*
1
Goal
-0.0963
-0.1036
1
Cat1
-0.023
-0.0541
0.1078
1
Cat2
-0.0595
-0.0509
-0.0522
-0.5351*
1
Cat3
0.0868
0.1086
-0.0516
-0.4232*
-0.5390*
1
PIC
0.1841*
0.1565*
0.0094
0.0594
-0.0957
0.0434
1
VID
0.1346
0.1019
0.0082
-0.0538
-0.0132
0.0678
0.3539*
1
NrUpd
0.4864*
0.3508*
0.2219*
0.0502
-0.0786
0.0343
0.1980*
0.0852
1
NrCmt
0.3917*
0.3555*
0.1285
0.0806
-0.0904
0.0166
0.0982
0.079
0.4635*
1
NrRewards
0.2365*
0.1688*
0.1255
-0.1329
0.114
0.0102
0.1484*
0.025
0.3065*
0.2591*
1
PrjDetail
0.2027*
0.1611*
0.1529*
0.0546
-0.1085
0.0619
0.1229
-0.0401
0.3193*
0.1951*
0.1532*
1
Backers
0.4263*
0.4294*
0.3944*
-0.1464*
0.1151
0.0226
0.1377
0.0722
0.5026*
0.5753*
0.3076*
0.2219*
1
FB
0.2663*
0.2143*
0.0464
-0.0652
-0.0257
0.0926
0.2236*
0.1292
0.1982*
0.099
0.1457*
0.1972*
0.1694*
1
TW
0.2665*
0.2620*
0.0745
-0.0345
-0.0122
0.0475
0.0119
-0.0588
0.2974*
0.2351*
0.0872
0.1789*
0.2291*
0.2170*
1
Founders
0.2868*
0.2422*
0.0386
-0.0756
0.0151
0.0592
0.1726*
0.0557
0.1910*
0.1623*
0.1431*
0.2906*
0.2654*
0.1423*
0.1576*
1
Note: * indicates a p-value < 0.01
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
513
Table 4 illustrates regression results for the distinction of successful and unsuccessful
projects. Considering the project categories, artistical and social projects appear to be more
successful than product-related projects for the highest level of funding goals above 15,000€,
and artistical projects less likely to be successful for projects below 4,000€. Both factors the
number of updates and comments are highly significant for the overall model, indicating
a positive impact on project success. Considering the regression models separated by different
funding goals, the number of updates display an unclear pattern with high significance for
projects below 4,000€, no significant impact on success for projects between 4,000€ and 7,000€
and significance for projects above 7,000€. The significance levels of number of comments
increase with a higher funding goal and are not significant on the lowest level for projects below
4,000€. Both variables indicate that keeping the crowd informed about the project by updates
and interacting with the crowd through the comment section on a crowdfunding platform is
central to project success, but results vary for different funding goals. The number of offered
rewards is not significant for the overall model, but highly significant for the projects below
4,000€. Offering a variety of rewards thus might influence project success for projects with
a low funding goal but becomes less relevant with an increasing funding goal.
Both social media and the number of founders indicate the access to a larger network
around the crowdfunding projects. A dedicated Facebook project page is significant for the
overall model, but not significant for any of the models for the different funding goal ranges.
The number of founders is highly significant in the overall model and for projects between
4,000€ and 15,000€, but not significant for projects below or above this range. A higher number
of founders can be understood as access to a larger personal network, offering to promote the
project to a larger audience. Thus, projects with a low funding goal may not depend on a very
large network or might not require a broad Social Media promotion. In contrast, the number of
founders is relevant with an increase of the funding goal, such that a broader network may
contribute to a project’s success. For projects with relatively high funding goals, the pure
number of founders may not be sufficient anymore to explain the network effect on project
success, but other factors such as innovativeness, attractiveness of rewards or more subjective
factors may have a larger impact.
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
514
Table 4: Robust Logit Regression Results for Project Success
Dep.
Variable
Project
Success
All Data
(1)
< 4000 €
(2)
4000 € - 7000€
(3)
> 15000 €
(5)
Cat2
0.142
(0.42)
-2.105**
(-0.42)
-0.319
(-0.36)
1.998**
(2.20)
Cat3
0.449
(1.18)
0.768
(0.42)
0.149
(0.15)
1.626*
(1.87)
NrUpd
0.207***
(4.11)
0.623***
(3.49)
0.162
(1.20)
0.191***
(3.46)
NrCmt
0.0615***
(3.39)
0.135
(1.35)
0.123**
(2.09)
0.0809***
(2.88)
NrRewards
0.0133
(0.71)
0.260***
(2.74)
0.181*
(1.67)
-0.0292
(-0.76)
PrjDetail
-0.0409
(-0.74)
0.134
(-0.65)
0.00627
(0.03)
-0.0868
(-0.69)
FB
1.017***
(2.75)
0.496
(0.51)
1.134
(1.59)
0.633
(0.63)
TW
0.521
(1.55)
1.304
(1.40)
0.558
(0.73)
0.0807
(0.09)
Founders
0.216***
(3.35)
0.207
(1.40)
0.428**
(2.32)
0.241
(1.40)
_cons
-2.876***
(-5.96)
-3.472***
(-2.60)
-5.098***
(-4.64)
-4.048***
(-3.04)
N
R-sq
338
0.327
82
0.533
73
0.439
91
0.484
t statistics in parentheses: * p<0.10, ** p<0.05, *** p<0.01
The results for regression analysis on the degree of success are illustrated in Table 5.
While the project categories for the previous logit-regression revealed several significant
differences for projects, the results for the linear regression on degree of success reveal
significant differences only for projects between 7,000€ and 15,000€. For the number of
comments and updates a comparable pattern as shown in Table 4 could be observed: A tendency
of more significant results for projects with an increasing funding goal can be observed. While
both factors are significant for the overall model, neither the number of updates nor the number
of comments for projects in the lowest funding goal range are significant. However, as the
funding goal increases, both factors become significant at the 1%-level, indicating a moderation
effect of the funding goal.
Concerning the social media factors, the availability of both a Facebook project page and
a dedicated Twitter profile are significant for the overall model but turn insignificant for the
remaining models with the exception of a slight significance at the 10%-level of a Facebook
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
515
page for projects below 7,000€. The pattern for the number of founders is the comparable to
the results from Table 4, with the exception that this factor remains significant for projects
above 15,000€. Since a logit regression only separates between successful and unsuccessful
projects, the information on the individual degree of success is lost, thus the underlying
distributions of the included variables differ between the two regression approaches and
differences in significance levels could be due to these distribution differences. A common
result, however, is that some clear patterns are observable for both regression approaches,
indicating a strong support for the claim of this study that different funding goals determine the
impact of the investigated factors on success probability and thus H1 is supported.
Table 5: Robust Linear Regression Results for Degree of Success
Dep.
Variable
Degree of
Success
All Data
(1)
< 4000 €
(2)
4000 € - 7000€
(3)
> 15000 €
(5)
Cat2
0.0555
(0.75)
-0.284
(1.42)
-0.0605
(-0.36)
0.183
(1.62)
Cat3
0.182
(1.43)
0.419
(0.88)
-0.129
(-0.73)
0.107
(0.98)
NrUpd
0.0284**
(2.54)
0.0528
(0.97)
0.00166
(0.08)
0.0242***
(2.92)
NrCmt
0.0124***
(2.96)
0.028
(0.83)
0.0357***
(2.94)
0.0125***
(5.15)
NrRewards
0.00155
(0.33)
0.041
(0.84)
0.0276*
(1.68)
-0.000156
(-0.03)
PrjDetail
-0.00722
(-0.49)
-0.0361
(-1.05)
-0.00465
(-0.13)
-0.0100
(-0.51)
FB
0.233***
(3.61)
0.341*
(1.96)
0.242*
(1.85)
0.0885
(0.74)
TW
0.224*
(1.69)
0.398
(1.49)
0.0997
(0.63)
0.0584
(0.44)
Founders
0.0524***
(3.34)
-0.00236
(-0.06)
0.149***
(3.99)
0.0622**
(2.18)
_cons
0.0631
(0.72)
0.0298
(0.05)
-0.259
(-1.40)
-0.049
(-0.31)
N
R-sq
338
0.2314
82
0.2633
73
0.5951
91
0.5949
t statistics in parentheses: * p<0.10, ** p<0.05, *** p<0.01
The regression results for the number of backers per project can be found in Table 6.
Whilst the number of updates was a highly significant variable for the previous dependent
variables on success, there is only one significance at the 10%-level for projects above 15,000€.
However, the number of comments demonstrates a much stronger effect in this case and
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
516
throughout all regression models, except for the group with the lowest goals. This finding
indicates, that for attracting backers a higher interaction with the crowd seems to be more
relevant for attracting more supporters than posting more updates. However, comments are
highly correlated with the number of backers (r=.58) and we rather assume a reciprocal effect
of an increasing number of backers that leads to an increase in comments, rather than the fact
that a high number of comments leads to the attraction of more backers in the first place.
Nonetheless, for projects below 7,000€ the number of comments is not or only slightly relevant,
which indicates that the interaction of backers with the founding team through comments gets
more significant for projects with higher funding goal levels, partially supporting the claim of
H2. Concerning social media integration, no strong effect could be found for the average
number of backers per project. However, the number of founders reveals an interesting pattern:
For projects above the 7,000€ funding goal threshold, the number of founders is not significant,
but highly significant for projects below 7,000€, further supporting the claim of a moderating
role of funding goal levels and supporting H2. This finding strengthens the idea that projects
with a rather high funding goal do not significantly benefit from a larger founding team,
indicating that at some point the personal network of founders becomes less relevant and other
factors become more important for project success. Projects with lower funding goals may
benefit more from close friends or family members supporting a project, but the higher the
funding goal the more backers outside the founders‘ networks might have to be attracted.
The number of offered rewards and the number of words used for a project description is
not significant in almost all regression models, and thus not considered a good instruments that
impact success in our examined crowdfunding projects. Since we only assessed the total number
of rewards, and not the nature, attractiveness or price levels of rewards, we can merely state
that increasing the number of offered rewards does not increase success probability
substantially nor attract more backers for the assessed projects. Following this logic, the same
holds true for the length of project descriptions, which we only assessed by the number of words
used. A more detailed assessment of rewards and specific components of a project description
could potentially yield different results.
Comparing the two assessed social media networks Facebook and Twitter, Facebook
played a slightly more significant role than Twitter. Although both social media platforms and
the number of project founders are indications for the accessible network size of a project, the
number of project founders proved to be much more significant in almost all regression models.
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
517
Table 6: Robust Linear Regression Results for Backers
Dep.
Variable
Number
of Backers
< 4000 €
(2)
4000 € - 7000€
(3)
> 15000 €
()
Cat2
1.549
(0.13)
19.19
(0.79)
145.7***
(2.65)
Cat3
5.852
(0.32)
-17.96
(-0.73)
70.00*
(1.83)
NrUpd
2.079
(1.30)
-6.311
(-1.57)
17.95*
(1.77)
NrCmt
1.544
(1.06)
5.690*
(1.83)
3.884**
(2.10)
NrRewards
1.605
(0.87)
0.409
(0.16)
5.185
(1.43)
PrjDetail
-1.782
(-1.23)
1.193
(0.16)
-3.517
(-0.34)
FB
14.48
(1.63)
37.68*
(1.68)
-12.14
(-0.27)
TW
8.612
(0.91)
73.54*
(1.94)
25.06-
(0.48)
Founders
5.579***
(2.68)
27.38***
(2.67)
5.100
(0.54)
_cons
-10.61
(-0.46)
-68.07**
(-2.02)
-126.8
(-1.45)
N
R-sq
82
0.2853
73
0.5263
91
0.5829
t statistics in parentheses: * p<0.10, ** p<0.05, *** p<0.01
Conclusion
The conducted regression analyses provide insights into the role of different funding goal levels
for the effect of success factors on crowdfunding projects. We find clear indications that some
success factors impact the success probability of a crowdfunding project differently when
varying funding goal levels are taken into account. We find strong indications for the overall
claim of this study, that the funding goal of crowdfunding projects should be incorporated as
moderating variable in quantitative analyses aiming at investigating crowdfunding success.
However, this study is also subject to some limitations that future studies should address.
First, we only assessed the availability of pictures, videos and social media and the total number
of updates and comments. Previous studies indicate that also the quality or content is a decisive
factor that explains why backers provide funds. For example, Hu, Li, and Shi (2015) found that
the differences in rewards provided to backers for different funding levels shapes people’s
intention to spend money on a crowdfunding project. Likewise, also the quality and specific
content of the provided videos or posted updates (see Kuppuswamy & Bayus, 2017) should be
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
518
considered. Nonetheless, this study did not seek to comprehensively explain crowdfunding
success. Some of the common factors that are usually assessed in crowdfunding research were
included in this study to confirm that the funding goal should not only be considered a factor
that directly impacts project success, but also strongly moderates the effects of other factors on
project success.
We assessed factors which can be understood as instruments influenced by project
founders directly on the websites of their projects on crowdfunding platforms. Thus, our results
constitute important information for nascent entrepreneurs who choose to run a crowdfunding
campaign to finance their idea: the relevance of individual factors must be considered
differently depending on the required funding. In particular, we found that the interaction with
the crowd through posting updates and encourage an active comment section becomes more
important with an increasing funding goal. Other factors like providing pictures or videos were
found to be significant success factors by previous research, however, our findings indicate that
pictures and videos became rather basic requirements for a crowdfunding project and cannot
help to explain success. The decision of which instruments to use in order to be successful is
significantly moderated by the chosen funding goal, and project founders are encouraged to
carefully think about the interplay of different funding goals and the effect of the employed
instruments. A strong factor we found was the number of founders, thus we encourage future
project founders to start a project in a team rather than creating a project with only one
representative. Future studies are required to investigate more detailed effects of different
funding goal level, and to determine which factors are more relevant for projects with lower
goals and which factors become increasingly important for projects targeting high funding
goals. We especially emphasize the need to develop an approach to assess ‚newness‘ or
‚innovativeness‘ of projects, since many studies do not consider the nature of individual
projects. A more detailed investigation of the interplay of different funding goal levels and
success factors could be carried out considering the quality, innovativeness and specific type of
project. Our study provides first indications in this direction and thereby contributes to the
general understanding of the dynamics of the innovative financing alternative that rearranged
the venture capital environment – reward-based crowdfunding.
Innovation Management, Entrepreneurship and Sustainability (IMES 2020)
519
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Contact
Felix Pinkow
Chair of Technology and Innovation Management
Technische Universität Berlin
Straße des 17. Juni 135, 10623 Berlin, Germany
[email protected]
Philip Emmerich
Chair of Technology and Innovation Management
Technische Universität Berlin
Straße des 17. Juni 135, 10623 Berlin, Germany
[email protected]