The Impact of Crowdfunding and its Ability to facilitate the Liability of Newness: A Case Study on New Ventures within the Product Design Industry

Abstract: Crowdfunding is often considered as a financial source to close the early stage financial gap of new ventures. However, there is little research on its impact regarding other liabilities new ventures face. The aim of this study is to find evidence on how crowdfunding can provide new ventures with additional value apart from financial resources. For this purpose, the concept of liability of newness is used as a framework to understand the specific impact of crowdfunding in different areas. This article uses a qualitative approach with three new ventures within the product design industry that used the crowdfunding platform Kickstarter. The findings showed that new ventures in this particular kind of industry use crowdfunding only as a marketing and sales channel rather than as a financial resource. It turned out that crowdfunding especially helps to facilitate external liabilities that are visible to the crowd, whereas internal liabilities that are not visible to the crowd are not affected.