1,721,014 research outputs found
Introduction : From Fundamentals to Advances in Crowdfunding Research and Practice
Full text linkThe chapter introduces the phenomenon of crowdfunding while presenting its definition and main manifestations in recent years. It then discusses the roles played by the various parties to a crowdfunding transaction, as well as the benefits each may gain from such engagement. Overall, it argues for a win-win situation, where all parties become better off from involvement in a responsible crowdfunding engagement. Furthermore, the chapter highlights the process dimension of crowdfunding, as represented through a series of three main stages, which are further specified into a seven sub-stage model. Each stage in the process depends on successful completion of the stage preceding it and relates to concrete activities and considerations that should be taken at different points in time. The chapter concludes with a review of the chapter contributions included in this book and highlights their main contributions
When angel-backed companies turn to crowdfunding: evidence from firm characteristics and business angels’ investment practices
No full textThis paper sheds light on the fundraising strategies pursued over time by entrepreneurial ventures, focusing on a still largely underexplored research issue: the decision of angel-backed ventures to raise funds through a follow-on equity crowdfunding (CF) round. We draw upon an original dataset of 217 Italian companies that received business angels’ (BAs) support over the period 2008-2018. The data examined indicate that a high level of monitoring activity by BAs negatively influences the probability of raising additional funds from a follow-on equity CF round. Conversely, BAs’ level of education positively influences the probability of completing a subsequent equity CF round. Interestingly, entering an accelerator program also does positively affect the latter probability. These results add evidence on the existence, under the right circumstances, of a complementarity relationship between different funding sources within the entrepreneurial ecosystem
Success in Equity Crowdfunding: A Quantitative Study of What Drives Equity Crowdfunding Campaign Success in Norway
No full textThis Master’s thesis studies what drives success in Norwegian equity crowdfunding campaigns.
Norway is an interesting context for studying equity-based crowdfunding because of limited access to
venture capital for start-ups additionally to heavy reliance on state support. The recent boom in equity
crowdfunding in Norway makes this study relevant. A linear regression analysis is based on 192
observations collected from the two existing equity crowdfunding platforms in Norway; Folkeinvest
and Dealflow. The thesis highlights variables supplemented by the relevant literature within success
factors in crowdfunding and presents 14 hypotheses. The most prominent results of the study is that a
longer campaign duration has a significant negative influence, and a sustainability-oriented project
has a significant positive influence on campaign success. Number of images, videos and the team size
are positively associated with campaign success in relation to attracting investors. Including images of
high quality significantly influences campaign success. There is no difference between the sexes in
access to capital, and equity-based crowdfunding has the effect of decentralizing start-up capital by
distributing money to both cities and districts. The results suggest that Norwegian equity
crowdfunding investors are less triggered by financial arguments than traditional investors. This is the
first study to research success factors in Norwegian equity crowdfunding campaigns and it will
provide a foundation of valuable insights for future studies and discussions
Investment Intention in Crowdfunding
Full text linkCrowdfunding is a form of investment that has emerged in the alternative financemarket. It addresses the unmet demand of small investorswanting toinvest in startups orcontribute to projects. In developing countries, this concept is recent,thus leadingto less activity compared to advanced markets. This master thesis seeksto explain the factors that driveor prevent investors from developed countries to fund projectsin developing countries. Factorslike monetary utility, societalutility, cultural distance, geographical distance, personal interest, perceived risk of crowdfunding, perceived risk on investment in developing countries, and self-efficacy have been identified inthe literature review. These factors have been transformed to testablehypotheses. This studyhasusedanexploratory quantitative approach andcollecteddata from 79 individuals, mainlyNorwegian nationals. Of the eight hypotheses, monetary utility, personal interestandperceived risk of investment in developing countries havenot been testable due to inadequatedata.The two hypothesescultural distance and geographical distance have beenmergedinto one variable as psychic distance due to being too highly correlated. Findingsfromthemultiple regression analysis have resultedinusaccepting the hypotheses of societal utility, self-efficacy, and psychic distance to be factors that impact investment intentionin crowdfunding. Perceived risk of crowdfunding on the other hand has beenfound insignificant. Results of this study havecontributed to our theoretical understanding of drivers and barriers for using crowdfunding for investment in developing countries. For practice, the results are highly relevant for fund seekers who are trying to raise funds through crowdfunding
What impacts crowfunding awareness in Albania and Lithuania?
Full text linkAbstract
Purpose — Crowdfunding awareness is essential for potential investors and entrepreneurs seeking funding as it can influence their decision to participate in crowdfunding campaigns.
Understanding factors affecting crowdfunding awareness can help researchers and practitioners better understand the dynamics of crowdfunding and develop effective strategies for promoting participation and success in crowdfunding campaigns. This final thesis aims to investigate the main factors affecting awareness of crowdfunding in Albania and Lithuania.
Design/methodology approach — This study applied a quantitative research design and employed an online survey as its primary data collection method. A 7-point Likert scale was selected to measure four main latent variables: social trust (SOT), familiarity (FAM), awareness (AWA), and economic and financial education (EED). A combination of random and snowball sampling was used, and distribution was conducted through various online channels without specific demographic targeting.
Findings — The results showed that two hypotheses were supported, and two were not supported. Firstly, economic education and familiarity have a positive and significant effect on crowdfunding awareness. Secondly, people’s trust has no significant effect on crowdfunding awareness. Furthermore, the level of crowdfunding market development was
found to have no moderating effect on economic education, social trust, and familiarity with crowdfunding users. Regarding control variables, the results indicated that age significantly influences crowdfunding awareness, whereas gender did not.
Originality/value — The study analyzes scientific literature to reveal the factors affecting individuals' willingness to use crowdfunding. The research data is valuable as the crowdfunding situation, especially the factors affecting awareness and willingness to use crowdfunding in Lithuania and Albania, is not discussed. The findings and conclusions could
be adapted to other countries.
Keywords: awareness, crowdfunding, social trust, familiarity, Lithuania, Albani
Valuation and effective capital funding in startup firms - "To what extent is startup valuation and investment decisions similar or different in venture capital and equity crowdfunding.
Full text linkThis thesis will discusses the similarities and differences between venture capital and equity crowdfunding based on reviewing literature and document analysis. Equity crowdfunding is a method of raising money by soliciting small investments from a large number of people. Venture capitalists are individuals or organizations that provide funding to startup companies in exchange for a share of ownership in the company. Venture capitalists typically place more emphasis on the potential return on investment when making decisions about whether to invest in a startup. This is because they are usually investing other people's money and need to generate a profit for their investors. Equity crowdfunding investors, on the other hand, tend to focus more on the products or services offered by the startup and whether they believe in the long-term viability of the business.
The lack of focus on market data and investor experience means that there is a significant knowledge gap between traditional investors and crowd investors. This knowledge gap can be detrimental to the success of a crowdfunding campaign, as it can lead to unrealistic expectations and a lack of understanding of the risks involved. It is important for entrepreneurs to be aware of this knowledge gap and take steps to bridge it, through education and communication with potential investors.
To analyze valuation process of the randomly selected companies I used retrieved valuation documents from the Crowdfunding website Folkeinvest. I downloaded all the available valuation documents of 12 companies that had raised money on Folkeinvest from 2021 to 2022. The average valuation of the chosen companies was MNOK 47. The most used valuation method was Discounted Cash Flows (DCF)-valuation. The funding success rate for the companies that used this method was 66\%. This is compared to a funding success rate of 84\% for the companies that used other methods of valuation or a combination of methodology. When comparing this to other valuation methods from the selection of data, we can see that the other methods generate a higher success rate of funding. This results might be connected to the observations of reviewing the available literature in the section about Decision-making - "Crowds are more interested in product development than financial data
Which appeals are most effective in convincing backers?
No full textFormål – Forståelsen av hvilke typer overbevisende budskap som er mest effektive, er
avgjørende for å overtale bidragsytere til å støtte en kampanje. Ved å undersøke bruken av
emosjonelle og rasjonelle appeller, forsøker denne masteroppgaven å gi innsikt i hvilke
appelltyper som er mest effektive i det norske markedet, målt gjennom sannsynligheten for støtte.
Metode – I denne oppgaven ble det benyttet en kvantitativ forskningsmetode, der en nettbasert
spørreundersøkelse ble distribuert gjennom SurveyXact. En 7-punkt Likert skala ble brukt til å
undersøke effekten av de fem hypotesene. Ikke-sannsynlighetsutvalg ble brukt, med en
kombinasjon av bekvemmelighetsutvalg og snøballutvalg. Dette ble gjort gjennom ulike kanaler
og resulterte i et endelig utvalg på 159 fra Norge.
Funn/resultater – Målingene av sannsynligheten for å støtte en kampanje viser et tydelig skille
mellom de to hovedkategoriene emosjonell og rasjonell appell. Resultatene viser at begge
hypotesene knyttet til emosjonelle appeller ble støttet, mens de to hypotesene knyttet til
rasjonelle appeller ikke ble støttet, og en ble delvis støttet. Hypotesene om fellesskap og bruk av
positive emosjonelle signaler hadde en positiv statistisk signifikans på sannsynligheten for å
støtte en kampanje. Derimot hadde hypotesene om økonomiske nøkkeltall og risikoinformasjon
ingen signifikant effekt. Den siste hypotesen om rasjonell appell, menneskelig kapital, viste en
svak positiv statistisk signifikans. Til slutt hadde ingen av kontrollvariablene som ble brukt i
denne studien noen statistisk signifikans.
Verdi – Oppgaven undersøker hvordan overtalende budskap i folkefinansiering påvirker
bidragsyteres sannsynlighet for å støtte kampanjer. Denne undersøkelsen skaper verdifull innsikt
og kunnskap som kan brukes innen markedsføring, og for kampanjeutviklere i Norge.
Nøkkelord: folkefinansiering, rasjonell appell, emosjonell appell, Norge, overbevisende
budskap, bidragsyter
Crowdfunding In Norway: Empirical Study Examining Entrepreneurs' Intentions to Use Crowdfunding
Full text linkThis master's thesis investigates the drivers and inhibitors influencing the intention of entrepreneurs to use crowdfunding as a financing method, with a focus on the potential distinctions between native and immigrant entrepreneurs in Norway. Crowdfunding has emerged as an inclusive alternative source of finance, enabling individuals and businesses to overcome traditional funding limitations. Immigrant
entrepreneurs, in particular, face unique challenges when seeking financial capital from conventional sources. However, research exploring the intention to adopt crowdfunding by entrepreneurs is limited.
Using an empirical analysis based on online survey data from 231 entrepreneurs in Norway, this study aims to bridge the research gap by identifying the factors shaping entrepreneurs' intentions to use crowdfunding. The study reveals that there are three key drivers positively impacting the intention to use crowdfunding by entrepreneurs in Norway: (1) being an immigrant, (2) perceived trust in the crowdfundingplatform and (3) the perceived usefulness of crowdfunding for theirbusiness venture. On the other hand, immigrant entrepreneurs demonstrated a higher intention to use crowdfunding, while native Norwegian entrepreneurs exhibited greater trust in the
platform, stronger social capital within Norway, and increased access to financing through both public grants and private investors.
The thesis begins with a literature review of existing research on crowdfunding, focusing on entrepreneurs' motivations. Subsequently, 13 hypotheses were presented, which were tested using the quantitative research method. The thesis concludes by summarizing key contributions, acknowledging limitations, and providing insights for further research and implications for both crowdfunding platforms and entrepreneurs in Norway
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