Financial Returns in Reward-Based Crowdfunding

16 Pages Posted: 14 May 2020 Last revised: 10 Jun 2020

See all articles by Victoria Dobrynskaya

Victoria Dobrynskaya

National Research University Higher School of Economics

Julia Grebennikova

National Research University Higher School of Economics

Date Written: April 21, 2020

Abstract

We quantify financial returns to backers in reward-based crowdfunding projects on Kickstarter and show that such investments provide profitable opportunities in addition to non-monetary benefits. The average unconditional annualized return is 11.5% and the average return on successful projects is 30%. Hence, backing money near the end of a campaign is a profitable strategy. The most attractive is the Design category, where successful projects yield 73%, on average. Short-term projects are more profitable than long-term ones. Financial return is an important type of extrinsic motivation in reward-based crowdfunding, which has generally been neglected in academic literature.

Keywords: Crowdfunding, Investor Motivation, Alternative Investments, Alternative Finance, Entrepreneurial Finance

JEL Classification: D14, G11, G5

Suggested Citation

Dobrynskaya, Victoria and Grebennikova, Julia, Financial Returns in Reward-Based Crowdfunding (April 21, 2020). Available at SSRN: https://ssrn.com/abstract=3582141 or http://dx.doi.org/10.2139/ssrn.3582141

Victoria Dobrynskaya (Contact Author)

National Research University Higher School of Economics ( email )

26, Shabolovka st.
Moscow, 119017
Russia

HOME PAGE: http://www.hse.ru

Julia Grebennikova

National Research University Higher School of Economics

136, Rodionova street
25/12, Bolshaya pecherskaya street
Nizhniy Novgorod, 603155
Russia

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