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The copycat conundrum: The double-edged sword of crowdfunding

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  • Cowden, Birton J.
  • Young, Susan L.

Abstract

Crowdfunding has proliferated over the past decade, creating various platforms on which new entrepreneurs signal their value to potential backers in order to attract funding. The boons of crowdfunding have blinded both practitioners and scholars alike, leaving potential negative unintended consequences underexplored. Copycats, for example, are a potential problem for crowdfunding ventures. In this article, we examine the consequences of signaling to these ill-intentioned, opportunistic audiences on crowdfunding platforms and propose a solution to aid novice entrepreneurs in making a more informed decision on platform selection. Specifically, we provide guidance on when to select an open, semi-open, or closed crowdfunding platform to reduce the impact of copycats. We conclude with prescriptive advice to novice entrepreneurs.

Suggested Citation

  • Cowden, Birton J. & Young, Susan L., 2020. "The copycat conundrum: The double-edged sword of crowdfunding," Business Horizons, Elsevier, vol. 63(4), pages 541-551.
    • Handle: RePEc:eee:bushor:v:63:y:2020:i:4:p:541-551
    DOI: 10.1016/j.bushor.2020.03.012
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