University of Twente Student Theses


The determining factors of crowdfunding success

Zee, A.J. van der (2018) The determining factors of crowdfunding success.

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Abstract:With crowdfunding, entrepreneurs can attract external finance for their ventures. Crowdfunding is an internet-based method of financing, in which many small contributions of the crowd are gathered over a fixed time period. There are four types of crowdfunding, which are loan-, equity-, reward-, and donation-based crowdfunding. This study seeks to find the determining factors of crowdfunding success at a Dutch crowdfunding platform that offers the four different crowdfunding types. As most crowdfunding platforms use the all-or-nothing approach, which has the consequence that the founder will not receive the provided funds if the funding target it not reached, it is important to founders that the funding goal of their crowdfunding project is reached or exceeded. When the drivers of successful crowdfunding projects are known, founders can use this knowledge for future crowdfunding projects. Based on a sample of 225 projects, the influence of project-specific, funding-period specific, founder-specific, and loanbased crowdfunding-specific factors are tested. The methods used to test the influence of these factors are logistic regression and ordinary least squares regression. One factor, updates on the project, which is a funding-period specific factor, is found to drive successful fundraising at this platform. The length of the project description is found to drive successful fundraising for reward-based crowdfunding projects. Furthermore, the crowdfunding experience of the founder is important for the funding ratio of the crowdfunding project, but not for whether the crowdfunding project is successful or not. The other factors in this study are not found to drive successful fundraising.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:01 general works
Programme:Business Administration MSc (60644)
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