Does the crowd mean business? An analysis of rewards-based crowdfunding as a source of finance for start-ups and small businesses

Joe Cox, Thang Nguyen

Research output: Contribution to journalArticle

4 Citations (Scopus)
25 Downloads (Pure)

Abstract

Purpose – The purpose of this paper is to investigate the extent to which rewards-based crowdfunding really does provide financial support for start-ups and small businesses relative to other types of activity such as creative and cultural projects.
Design/methodology/approach – The paper reports findings from a series of multiple regression on a unique data set covering around 205,000 rewards-based crowdfunding projects across a number of leading platforms in the USA, the UK and Canada.
Findings – The authors report two main findings. First, rewards-based crowdfunding is highly inequitably distributed and that success is concentrated within a relatively small number of platforms and campaigns.
Second, crowdfunding campaigns explicitly related to business perform relatively poorly compared with those in other categories; particularly those in creative areas such as music and dance.
Originality/value – These findings call into question the extent to which rewards-based crowdfunding really is a means by which significant numbers of start-ups can bridge gaps in the provision of finance
Original languageEnglish
Pages (from-to)147-162
Number of pages16
JournalJournal of Small Business and Enterprise Development
Volume25
Issue number1
Early online date14 Dec 2017
DOIs
Publication statusPublished - 2018

Bibliographical note

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Keywords

  • Crowdfunding
  • Online
  • Finance
  • start-ups

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