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Maximising the Chances of Success in Reward Crowdfunding

Author

Listed:
  • Tomas Stofa

    (Technical University of Kosice, Faculty of Economics, Department of Banking and Investment, Kosice, Slovakia)

  • Michal Soltes

    (Technical University of Kosice, Faculty of Economics, Department of Banking and Investment, KoŇ°ice, Slovakia)

Abstract

Crowdfunding enables the funding of business and non-profit ideas by raising small amounts from a large number of people. In this paper, we analyse a dataset of more than 3,600 completed projects from Slovakia and the Czech Republic to identify the most critical determinants of funding success. While confirming the positive effect of the target amount, video introduction, and negative impact of grammatical errors, we have observed the social network page's mixed effects. What is more, we have identified a new determinant, the questions asked, with a negative impact on the funding process. The results also suggest a brief and precise description with a video introduction can help achieve the goal. On the local crowdfunding platform, art and community projects are preferred, while the results suggest geographical effect. This paper may also be interpreted as guidance for project creation to maximise the chances of successful funding.

Suggested Citation

  • Tomas Stofa & Michal Soltes, 2021. "Maximising the Chances of Success in Reward Crowdfunding," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 71(1), pages 80-94, June.
  • Handle: RePEc:fau:fauart:v:71:y:2021:i:1:p:80-94
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    File URL: https://journal.fsv.cuni.cz/mag/article/show/id/1481
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    More about this item

    Keywords

    reward crowdfunding; funding success; determinants;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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