Investor participation in reward-based crowdfunding: impacts of entrepreneur efforts, platform characteristics, and perceived value

Reward-based crowdfunding is an emerging business model whereby entrepreneurs raise money from several small investors. These investors, in turn, receive products/services as a reward. Investors’ participation is the key to success for this business model. We use the means-end theory to examine the success of the reward-based crowdfunding mechanism. We present an integrated model by considering two platform-based service attributes—platform characteristics (institutional mechanisms and information transparency) and entrepreneur efforts (content, embeddedness, and interaction)—and explore their influence on an investor’s perceived value (functional value, price value, emotional value, and social value), and participation intention. We test the model using survey data of 218 responses from 65 crowdfunding projects on a leading crowdfunding platform. The results show that all perceived values are positively associated with an investor’s future participation intention. An entrepreneur’s efforts to provide high-quality content and encourage interactions and the platform’s characteristics of institutional mechanisms improve an investor’s perceived functional, price, emotional, and social values. In addition, information transparency positively influences an investor’s perceived price, functional and emotional values. This study contributes to crowdfunding research by providing a comprehensive understanding of the success of a reward-based crowdfunding project. At the same time, the results of this study will be helpful for crowdfunding entrepreneurs and platforms.