Crowdfunding Models: Keep-It-All vs. All-Or-Nothing

Forthcoming, Financial Management

46 Pages Posted: 11 Jun 2014 Last revised: 23 Dec 2019

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University; Birmingham Business School; European Corporate Governance Institute (ECGI)

Gaël Leboeuf

CERGAM - Aix-Marseille University

Armin Schwienbacher

SKEMA Business School

Date Written: February 5, 2019


Reward-based crowdfunding campaigns are commonly offered in one of two models in reference to fundraising goals set by the entrepreneur: “Keep-It-All” (KIA), where the entrepreneur keeps the entire amount raised regardless of achieving the goal, and “All-Or-Nothing” (AON), where the entrepreneur keeps nothing unless the goal is achieved. We hypothesize that AON forces the entrepreneur to bear more risk and thereby encourages crowdfunders to pledge more capital, enabling entrepreneurs to set larger goals. We further hypothesize that AON is a costly signal of commitment for the entrepreneur, yielding a separate equilibrium with higher quality and more innovative projects with higher success rates. Empirical tests support both hypotheses.

Keywords: Crowdfunding, Internet, Signaling

JEL Classification: G21, G24, G32, L26

Suggested Citation

Cumming, Douglas J. and Leboeuf, Gaël and Schwienbacher, Armin, Crowdfunding Models: Keep-It-All vs. All-Or-Nothing (February 5, 2019). Forthcoming, Financial Management, Available at SSRN: or

Douglas J. Cumming

Florida Atlantic University ( email )

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Birmingham Business School ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Gaël Leboeuf

CERGAM - Aix-Marseille University ( email )

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Armin Schwienbacher (Contact Author)

SKEMA Business School ( email )

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