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Choosing crowdfunding: Why do entrepreneurs choose to engage in crowdfunding?

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  • Junge, Louise Bech
  • Laursen, Iben Cleveland
  • Nielsen, Kristian Roed

Abstract

As crowdfunding becomes an increasingly common source of financing for a diverse range of entrepreneurs, this paper seeks to add to the literature by qualitatively exploring why entrepreneurs choose to engage in crowdfunding. We find that entrepreneurs often engage in crowdfunding as a first resort with three distinct motives; to raise capital, to validate a business idea, or to create brand awareness. Especially reward-based crowdfunding is often seen as a tool for validate a business idea or generating awareness not as a source of finance. Finally we observe that entrepreneurs’ motives for engaging in crowdfunding often correlate with their maturity and thus motivations for engaging in crowdfunding shift as they mature.

Suggested Citation

  • Junge, Louise Bech & Laursen, Iben Cleveland & Nielsen, Kristian Roed, 2022. "Choosing crowdfunding: Why do entrepreneurs choose to engage in crowdfunding?," Technovation, Elsevier, vol. 111(C).
    • Handle: RePEc:eee:techno:v:111:y:2022:i:c:s0166497221001668
    DOI: 10.1016/j.technovation.2021.102385
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    References listed on IDEAS

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    4. Jiao, Hao & Wang, Lindong & Yang, Jifeng, 2023. "Standing head and shoulders above others? Complementor experience-based design and crowdfunding success on digital platforms," Technovation, Elsevier, vol. 128(C).

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