The Dynamics of Crowdfunding: Determinants of Success and Failure

Mollick, Ethan

doi:10.2139/ssrn.2088298

Cited by 136 publications

(195 citation statements)

References 52 publications

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“…Contrary to results from rewards-based crowdfunding [30], we found no significant effect for the use of video in investment solicitations. Unfortunately, our data does not yield clues as to why the use of video had no effect and further research will be required to understand how entrepreneurs can leverage rich media in communicating with investors in equity crowdfunding platforms.…”

Section: Discussioncontrasting

confidence: 99%

Success Factors in Title III Equity Crowdfunding in the United States

Mamonov¹,

Malaga²

2018

Proceedings of the 51st Hawaii International Conference on System Sciences

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Section: Discussioncontrasting

confidence: 99%

Success Factors in Title III Equity Crowdfunding in the United States

Mamonov¹,

Malaga²

2018

Proceedings of the 51st Hawaii International Conference on System Sciences

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“…Studies such as Agrawal et al (2011) and Mollick (2014) focus on the geographic origin of consumers relative to the entrepreneur, while Kuppuswamy and Bayus (2013) examine the role of social information for the project's success.…”

Section: Related Literaturementioning

confidence: 99%

A Theory of Crowdfunding: A Mechanism Design Approach with Demand Uncertainty and Moral Hazard

Strausz¹

2017

American Economic Review

277

134

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Crowdfunding provides the innovation that, before the investment, entrepreneurs contract with consumers. Under demand uncertainty, this improves a screening for valuable projects. Entrepreneurial moral hazard threatens this benefit. Focusing on the trade-off between value screening and moral hazard, the paper characterizes optimal mechanisms. Current crowdfunding schemes reflect their salient features. Efficiency is sustainable only if returns exceed investment costs by a margin reflecting the degree of moral hazard. Constrained efficient mechanisms exhibit underinvestment. Crowdfunding blurs the distinction between finance and marketing, but complements rather than substitutes traditional entrepreneurial financing. As a screening tool for valuable projects, crowdfunding unambiguously promotes social welfare.

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“…Beyond OSS, community-based innovation is increasingly common in fields ranging from science (Franzoni and Sauermann 2014) to new product development (Afuah and Tucci 2012, Poetz and Schreier 2012) to crowdfunding (Mollick 2014). In most of these settings, communities innovate, but other organizations generally commercialize the innovations.…”

Section: Resultsmentioning

confidence: 99%

Filthy Lucre? Innovative Communities, Identity, and Commercialization

Mollick

2016

Organization Science

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Online communities play an increasingly important role in developing innovation. However, relatively little is known about the ways in which community affiliation influences how innovations and products generated in these communities are commercialized. By examining open source software (OSS) as an example of an innovation community and using both a quasi experiment and a longitudinal survey, I seek to shed light on this issue. In the quasi experiment, using the launch of the Apple App Store, I find a decreased propensity toward commercialization among individuals associated with online community innovation. I then examine the mechanisms for this decreased commercialization with a novel longitudinal survey of OSS community members. Despite the history of OSS as an anticommercial community, I do not find that anticommercial attitudes play a role in commercialization decisions. Instead, differences in entrepreneurial self-identity have large significant effects on the propensity to commercialize. I conclude with a discussion of the implications of these findings for the literatures on both entrepreneurial identity and community innovation. Abstract:Online communities play an increasingly important role in developing new innovations. However, relatively little is known about the ways in which community affiliation may change the incentives to commercialize those new innovations. By examining Open Source Software (OSS) as an example of an innovation community, and using both a quasi-experiment and a longitudinal survey, I seek to shed light on this issue. In the quasi-experiment using the launch of the Apple App Store, I find a lower propensity towards commercialization among individuals associated with online community innovation. I then examine the mechanisms for this lower commercialization with a novel longitudinal survey of entrepreneurial activity among OSS community members. Despite the history of OSS as an anticommercial community, I do not find that anti-commercial attitudes play a role in commercialization decisions. Instead, differences in self-identity between community-based innovators and entrepreneurs have large significant effects on the propensity to commercialize innovations. I conclude with a discussion of the implications of these findings for both the literatures on entrepreneurial identity and community innovation.

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The Dynamics of Crowdfunding: Determinants of Success and Failure

Cited by 136 publications

References 52 publications

Success Factors in Title III Equity Crowdfunding in the United States

Success Factors in Title III Equity Crowdfunding in the United States

A Theory of Crowdfunding: A Mechanism Design Approach with Demand Uncertainty and Moral Hazard

Filthy Lucre? Innovative Communities, Identity, and Commercialization

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