Determining key drivers of crowdfunding success and exploring the social nature of crowdfunding

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Nevin, Seán
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University College Cork
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Initially seen as a way for individuals to raise money for causes or projects through the collective effort of friends and family, crowdfunding provides start-ups the opportunity to bypass traditional financing methods, and instead raise capital for their venture from customers and investors. Unlike traditional investing, crowdfunding success relies on a large number of individuals giving small amounts of money. This means crowdfunding campaigns are constantly looking to increase their chances of success, and stand out from other campaigns. In order to do this, crowdfunding campaigns are increasingly using social media to convey their message and project across to potential backers. Therefore, the objective of this thesis is to identify key drivers that impact crowdfunding success and explore the social nature of crowdfunding. This thesis was initiated by a literature review that examined factors that impact the success of crowdfunding campaigns. While providing a comprehensive background on the determinants of success, this study also illustrates several potential avenues for future research. First, it highlights the lack of research surrounding discussion around the campaign outside of the crowdfunding platform, particularly with equity crowdfunding. This study also shows the need for more research exploring how successful campaigns were after the crowdfunding campaign. After this literature review, the first quantitative study analyses how campaigns use social media to communicate with the crowd outside of the crowdfunding platform. Findings show that engagement with the crowd on social media positively impacted the success of crowdfunding campaigns. This study also suggests that, while within-platform information sharing influences the overall funding, it is the multi-platform information sharing across social media that allows fundraising to exceed initial targets and tap into different social bonding behaviours (hedonic funding). Building on research into social media and equity crowdfunding, the third study examines rewards-based crowdfunding, analysing how the fundraiser’s social network changes over the course of the campaign. Findings from this paper show that the strength and breadth of the social network can impact whether the campaign reaches its funding goal. The final study explores the second gap found in the literature; the lack of research surrounding the success of crowdfunding campaigns post-fundraising. This research paper examines the impact a crowdfunding campaign has on public sentiment, analysing how sentiment changes in the six months after the campaign. This thesis has implications for theory, practice, and future research. First, I provide a novel perspective on crowdfunding success, showing it is not only reaching a funding target, but should be measured across different stages of the campaign. This thesis also introduces the idea that crowdfunding is a social collaboration. Through unique analysis of these campaigns and backers, along with the relationship between social media and crowdfunding, I find several factors that influence the success of campaigns. Finally, this thesis also highlights a number of interdependencies that exist, which can also impact the success of campaigns. These findings and implications are discussed at length in the final chapter.
Crowdfunding , Success factors , Social media , Social identity
Nevin, S. 2020. Determining key drivers of crowdfunding success and exploring the social nature of crowdfunding. PhD Thesis, University College Cork.
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