Individual Crowdfunding Practices

Venture Capital: An International Journal of Entrepreneurial Finance, 2013, 15(4), 313-333.

35 Pages Posted: 24 Sep 2012 Last revised: 23 Jan 2014

Paul Belleflamme

GREQAM; CORE and Louvain School of Management, UCL (Université Catholique de Louvain); CESifo (Center for Economic Studies and Ifo Institute)

Thomas Lambert

Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)

Armin Schwienbacher

SKEMA Business School

Date Written: March 27, 2013

Abstract

This study investigates characteristics of individual crowdfunding practices and drivers of fundraising success, where entrepreneurs can tailor their crowdfunding initiatives better than on standardized platforms. Our data indicate that most of the funds provided are entitled to receive either financial compensations (equity, profit-share arrangement) or non-financial benefi ts (final product, token of appreciation), while donations are less common. Moreover, crowdfunding initiatives that are structured as non-profit organizations tend to be significantly more successful than other organizational forms in achieving their fundraising targets, even after controlling for various project characteristics. This finding is in line with theoretical arguments developed by the contract failure literature that postulates that non-profit organizations may find it easier to attract money for initiatives that are of interest for the general community due to their reduced focus on profits.

Keywords: crowdfunding, pre-ordering, non-profi t

JEL Classification: G32, L11, L13, L15, L21, L31

Suggested Citation

Belleflamme, Paul and Lambert, Thomas and Schwienbacher, Armin, Individual Crowdfunding Practices (March 27, 2013). Venture Capital: An International Journal of Entrepreneurial Finance, 2013, 15(4), 313-333.. Available at SSRN: https://ssrn.com/abstract=2151179 or http://dx.doi.org/10.2139/ssrn.2151179

Paul Belleflamme

GREQAM ( email )

Centre de la Vieille Charité
2, rue de la Charité
Marseille, 13002
France

HOME PAGE: http://www.paulbelleflamme.com

CORE and Louvain School of Management, UCL (Université Catholique de Louvain) ( email )

34 Voie du Roman Pays
POBox L1.03.01
B-1348 Louvain-la-Neuve, B-1348
Belgium
+32 10 47 82 91 (Phone)
+32 10 47 43 01 (Fax)

HOME PAGE: http://perso.uclouvain.be/paul.belleflamme/Site/Home.html

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Thomas Lambert (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Rotterdam, 3000 DR
Netherlands

HOME PAGE: http://www.sites.google.com/site/lambertthom

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Armin Schwienbacher

SKEMA Business School ( email )

Lille
France

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