The Reward-Based Crowdfunding: Determinants of Backers’ Repeat Entrepreneurial Project Financing

Abstract

This thesis investigates the reasons why fund providers finance multiple entrepreneurial projects. Its key contribution is towards understanding the supply side of the crowdfunding market. Previous investigations often argue that increasing the number of backers is decisive in increasing market volume, and then achieving success and longevity in the market. Therefore, various attracting mechanisms were deployed mainly from the project owners’ perspective among four market actors. The backers’ perspective (supply side) was omitted.

This thesis argues that the number of fund providers may not necessarily ensure success as backers could provide an insignificant amount once in a lifetime and remain silent. Thus, we considered the attribution of backers’ repeat funding commitment as a crucial part of market volume and used it as a base for supply-side analysis. The research aims to assess determinants of repeat project financing by profiling it to backers’ income, gender difference, ease of online payments, entrepreneurial and digital culture, and financial system advancement. OLS estimation method was used to analyze cross-country data on repeat project financing on Kickstarter and Indiegogo platforms between 2010-2020. The study outcome highlights that backers’ income significantly predicts repeat financing. The result is useful for entrepreneurs, policy-makers, and investors.

Keywords: Repeat funding decisions, complete market anlysis, successful entrepreneurial finance