Emphasizing the Entrepreneur or the Idea? The Impact of Text Content Emphasis on Investment Decisions in Crowdfunding

Decision Support Systems, Forthcoming

30 Pages Posted: 8 Jul 2020

See all articles by Wei Wang

Wei Wang

Huaqiao University

Wei Chen

University of Arizona - Eller College of Management

Kevin Zhu

University of California, San Diego

Hongwei Wang

Tongji University - School of Economics and Management

Date Written: June 10, 2020

Abstract

The criteria for evaluating a crowdfunding project vary from person to person. Some investors are concerned with the entrepreneurs’ profiles, while others are more interested in the creativity behind the project. Most investors evaluate a project by referring to founder-generated content. Entrepreneurs face the choice of emphasizing their own profiles or the project creativity within the limited narrative. Our study is thus motivated to examine how the emphasis of the text narratives affect the fundraising outcomes. We propose an improved deep learning model for text content emphasis (TCE) detection from various textual sources, including titles, blurbs, and detailed descriptions, and then estimate the impact of TCE on the fundraising success of Kickstarter campaigns. Our empirical analyses demonstrate that TCE matters differently for various textual sources. The title and blurb should emphasize the entrepreneur profile, while the detailed description should highlight the idea creativity. Furthermore, for the detailed description, the entrepreneur profile has a more positive effect when it is placed at the beginning of the narrative. And the effects of entrepreneur-oriented narratives are more pronounced in these projects with more social connections. This study contributes to the understanding of TCE, entrepreneur profile disclosure, and social connection in economic exchanges in online crowdfunding.

Keywords: crowdfunding; investment willingness; text content emphasis; text analytics

JEL Classification: M15

Suggested Citation

Wang, Wei and Chen, Wei and Zhu, Kevin and Wang, Hongwei, Emphasizing the Entrepreneur or the Idea? The Impact of Text Content Emphasis on Investment Decisions in Crowdfunding (June 10, 2020). Decision Support Systems, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3625511

Wei Wang (Contact Author)

Huaqiao University ( email )

Quanzhou 361021, Fujian province
China

Wei Chen

University of Arizona - Eller College of Management ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States

Kevin Zhu

University of California, San Diego ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

HOME PAGE: http://https://rady.ucsd.edu/people/faculty/zhu/

Hongwei Wang

Tongji University - School of Economics and Management ( email )

Siping Road 1500
Shanghai, Shanghai 200092
China

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