Not Just an Ego Trip: Exploring Backers' Motivation for Funding in Incentive-Based Crowdfunding

Journal of Strategic Information Systems (JSIS), 2017

Posted: 22 Jun 2018

See all articles by J. M. Leimeister

J. M. Leimeister

University of St. Gallen; University of Kassel - Information Systems

Ulrich Bretschneider

University of Kassel

Date Written: 2017

Abstract

Incentive-based forms of crowdfunding – such as reward-, equity- and lending-based crowdfunding – are becoming increasingly popular. However, research that studies backers’ motivations for funding in these environments is still in an embryonic state, revealing an inconsistent and narrow picture. The few existing studies are largely guided by the idea that backers are mainly egoistically motivated and do not have prosocial motives. We developed a research model that describes backers’ motivation and conducted an empirical study to examine this model. Results indicate that backers indeed have several self-interest motivations for funding: prospect of a reward; expectation of recognition from others; to lobby a certain project in the hopes of its fruition; and to develop their image. However, some backers are also prosocially motivated in that they develop feelings of liking for a certain venture and/or project team. Furthermore, we found evidence that herding has a significant moderating effect on backers’ reward motivation. Strategic IS researchers as well as crowdfunding practitioners can draw on our findings to systematically design, implement, and evaluate potential incentive systems that respond to reward-, recognition-, lobbying-, image- and liking-motives and thereby attract the crowd more effectively to invest in ventures presented on incentive-based crowdfunding systems.

Suggested Citation

Leimeister, Jan Marco and Bretschneider, Ulrich, Not Just an Ego Trip: Exploring Backers' Motivation for Funding in Incentive-Based Crowdfunding (2017). Journal of Strategic Information Systems (JSIS), 2017, Available at SSRN: https://ssrn.com/abstract=3031979

Jan Marco Leimeister (Contact Author)

University of St. Gallen ( email )

Varnbuelstr. 14
Saint Gallen, St. Gallen CH-9000
Switzerland

University of Kassel - Information Systems ( email )

Pfannkuchstraße 1
Kassel, 34121
Germany

Ulrich Bretschneider

University of Kassel ( email )

Fachbereich 05
Nora-Platiel-Straße 1
34109 Kassel, Hessen 34127
Germany

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