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Crowfunding and Innovation

Author

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  • Fabrice Hervé

    (CREGO - Centre de Recherche en Gestion des Organisations (EA 7317) - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE])

  • Armin Schwienbacher

    (SKEMA Business School - SKEMA Business School)

Abstract

Entrepreneurs have started relying on crowdfunding to fund their investments. This paper surveys the literature linking crowdfunding with innovation in entrepreneurial firms. Two distinct areas are discussed. First, crowdfunding has the potential to foster innovation by offering new sources of capital to innovation‐driven firms and thereby reduce the funding gap for innovative startups. Second, crowdfunding offers a way for the crowd to participate in the innovation process by providing feedback to the entrepreneur. This feedback can take various forms, including providing ideas on the development of the product during and after the campaign (in the spirit of crowdsourcing), and providing valuable information on the future demand for the new product.

Suggested Citation

  • Fabrice Hervé & Armin Schwienbacher, 2018. "Crowfunding and Innovation," Post-Print hal-01875915, HAL.
    • Handle: RePEc:hal:journl:hal-01875915
    DOI: 10.1111/joes.12274
    Note: View the original document on HAL open archive server: https://u-bourgogne.hal.science/hal-01875915
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    4. Sophie Pommet & Alexandra Rufini & Dominique Torre, 2024. "The role of lead investors in equity crowdfunding campaigns with a secondary market," Small Business Economics, Springer, vol. 63(1), pages 243-273, June.
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    9. Derek Eldridge & Tahir M. Nisar & Mariateresa Torchia, 2021. "What impact does equity crowdfunding have on SME innovation and growth? An empirical study," Small Business Economics, Springer, vol. 56(1), pages 105-120, January.
    10. Wachs, Johannes & Vedres, Balázs, 2021. "Does crowdfunding really foster innovation? Evidence from the board game industry," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    11. Hasnan Baber, 2019. "Factors Underlying Attitude Formation Towards Crowdfunding in India," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(4), pages 46-54, July.
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