A Review of Crowdfunding Research and Findings

Abstract

An important barrier to commercializing innovations is the availability of early-stage funding. Given the difficulties that new ventures face in attracting financing from angel investors, banks and venture capital funds, some entrepreneurs are tapping into large, online communities of consumer-investors. Called “crowdfunding,” this relatively new form of informal venture financing allows entrepreneurs to directly appeal to the general public (i.e., the “crowd”) for help in getting their innovative ideas off the ground. Due to the rapidly growing interest in this online form of venture financing, academic research is beginning to explore the drivers behind successfully crowdfunded projects. In this chapter, we summarize the key findings from the empirical crowdfunding literature organized by the four types of crowdfunding platforms.

Keywords: Crowdfunding, Entrepreneurship, Innovation, Venture Financing, Strategy

JEL Classification: O31, L26, L17