Paper Type
Research-in-Progress Paper
Description
Equity-based crowdfunding is an increasingly popular source to fund start-ups. In equity-based crowdfunding, a form of crowdsourcing, many crowdfundees collectively fund a start-up by providing parts of the requsted funding in prospect of financial returns. While extant research has provided insights into the crowd´s motives for participating in various forms of crowdsourcing initiatives, we know little about the motivations that drive the crowd to invest in start-ups via crowdfunding. In literature, there are ongoing calls to investigate this phenomenon since it is expected that motives for investing in start-ups via crowdfunding differ from motives for engaging in other forms of crowdsourcing initiatives. Against this background, this research aims at investigating why crowdfundees fund start-ups. In this research-in-progress paper we build on related literature to theoretically develop a research model and plan to validate this model with an empirical survey on an equity-based crowdfunding platform specialised on start-up funding. By giving concrete answers to this research qustions, our research will take up on a deeper understanding of the crowd´s motivation for investing in start-ups and therefore theoretically contributes to the understanding of the body of knowledge in motivations in crowdsourcing.
MOTIVATIONS FOR CROWDFUNDING: WHAT DRIVES THE CROWD TO INVEST IN START-UPS?
Equity-based crowdfunding is an increasingly popular source to fund start-ups. In equity-based crowdfunding, a form of crowdsourcing, many crowdfundees collectively fund a start-up by providing parts of the requsted funding in prospect of financial returns. While extant research has provided insights into the crowd´s motives for participating in various forms of crowdsourcing initiatives, we know little about the motivations that drive the crowd to invest in start-ups via crowdfunding. In literature, there are ongoing calls to investigate this phenomenon since it is expected that motives for investing in start-ups via crowdfunding differ from motives for engaging in other forms of crowdsourcing initiatives. Against this background, this research aims at investigating why crowdfundees fund start-ups. In this research-in-progress paper we build on related literature to theoretically develop a research model and plan to validate this model with an empirical survey on an equity-based crowdfunding platform specialised on start-up funding. By giving concrete answers to this research qustions, our research will take up on a deeper understanding of the crowd´s motivation for investing in start-ups and therefore theoretically contributes to the understanding of the body of knowledge in motivations in crowdsourcing.