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Remarkable Funders: How Early-Late Backers and Mentors Affect Reward-Based Crowdfunding Campaigns

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  • Francesco Gangi
  • Lucia Michela Daniele

Abstract

In recent years, the growth of the reward-based crowdfunding model has offered new opportunities to meet the funding requirements of start-ups. However, the achievement of the funding target is still a complex goal, given the existence of several information barriers between insiders (project proponents) and outsiders (backers) of a crowdfunding campaign. Within the framework of the information asymmetry and the theory of signals, this study aims to analyse the role of two kinds of previously un-investigated funders in determining the success of crowdfunding campaigns: early-late backers (who are placed at the beginning of the tail of the campaign) and mentors (who are represented by firms acting as more expert backers). The findings indicate that both types of funders are remarkably important for the success of a crowdfunding campaign.

Suggested Citation

  • Francesco Gangi & Lucia Michela Daniele, 2017. "Remarkable Funders: How Early-Late Backers and Mentors Affect Reward-Based Crowdfunding Campaigns," International Business Research, Canadian Center of Science and Education, vol. 10(11), pages 58-69, November.
    • Handle: RePEc:ibn:ibrjnl:v:10:y:2017:i:11:p:58-69
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    Cited by:

    1. Sardar Muhammad Usman & Farasat Ali Shah Bukhari & Muhammad Usman & Daniel Badulescu & Muhammad Safdar Sial, 2019. "Does the Role of Media and Founder’s Past Success Mitigate the Problem of Information Asymmetry? Evidence from a UK Crowdfunding Platform," Sustainability, MDPI, vol. 11(3), pages 1-24, January.
    2. Kuo, Ying-Feng & Lin, Cathy S. & Liu, Li-Te, 2022. "The effects of framing messages and cause-related marketing on backing intentions in reward-based crowdfunding," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    3. Lenny Phulong Mamaro & Athenia Bongani Sibindi, 2023. "The Drivers of Successful Crowdfunding Projects in Africa during the COVID-19 Pandemic," JRFM, MDPI, vol. 16(7), pages 1-17, July.
    4. Chan, Ho Fai & Moy, Naomi & Schaffner, Markus & Torgler, Benno, 2021. "The effects of money saliency and sustainability orientation on reward based crowdfunding success," Journal of Business Research, Elsevier, vol. 125(C), pages 443-455.
    5. Jermain Kaminski & Christian Hopp & Christian Lukas, 2018. "Who benefits from the wisdom of the crowd in crowdfunding? Assessing the benefits of user-generated and mass personal electronic word of mouth in computer-mediated financing," Journal of Business Economics, Springer, vol. 88(9), pages 1133-1162, December.

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    More about this item

    Keywords

    crowdfunding; information asymmetry; reward-based model; signalling theory;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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