Crowdfunding: Insights Into The Motives That Influence Entrepreneurs When Launching A Successful Campaign

Abstract: Crowdfunding has witnessed growing interest within academia in recent years, despite the underlying motivations for entrepreneur engagement in crowdfunding activities receiving little attention. The purpose of this study is to explore the motives that influence entrepreneurs when using crowdfunding and how these motives are related to each other. This will then provide a deeper understanding of how entrepreneurs can develop a successful crowdfunding campaign. Comprehension of these motives is important, given crowdfunding's growing role and popularity as a viable alternative to traditional sources of finance. It will also be of interest to crowdfunding platform operators who will be able to offer more tailored and comprehensive crowdfunding solutions. The study adopted a qualitative research approach, investigating three Swedish technology companies who had prior crowdfunding success on the Kickstarter crowdfunding platform. Given the empirical findings, it was concluded that entrepreneurs are particularly inclined to form new connections as part of the process of finding new customers in order to pre-sell their products; this appears to be the catalyst for obtaining the necessary funds to commence production. Entrepreneurs are further motivated to use crowdfunding for a range of inter-related purposes including expanding awareness of work via pre-selling and gaining approval through market validation. By encompassing these motives, the broader concept of inclusion via an edited narrative, and the consequential psychological impression of honesty and openness, can be viewed as a meta strategy which consequently bolsters the chances of success. Our major contribution is to present this finding as a dynamic conceptual framework building upon and thereby extending previous studies in this field by the Human and Computer Interaction scholars, Gerber and Hui. Entrepreneurs considering the use of crowdfunding should be aware that it can constitute more than just raising funds and that planning and managing a campaign requires considerable effort. Daily campaign management is an arduous task and should not be undertaken lightly.