Crowd‐funding: transforming customers into investors through innovative service platforms

Abstract

Purpose -The purpose of this paper is to analyze the emerging crowd-funding phenomenon, that is a collective effort by consumers who network and pool their money together, usually via the internet, in order to invest in and support efforts initiated by other people or organizations. Successful service businesses that organize crowd-funding and act as intermediaries are emerging, attesting to the viability of this means of attracting investment. Design/methodology/approach -The research employs a "grounded theory" approach, performing an in-depth qualitative analysis of three cases involving crowd-funding initiatives: SellaBand in the music business, Trampoline in financial services, and Kapipal in non-profit services. These cases were selected to represent a diverse set of crowd-funding operations that vary in terms of risk/return for the investor and the type of payoff associated to the investment. Findings -The research addresses two research questions: how and why do consumers turn into crowd-funding participants? and how and why do service providers set up a crowd-funding initiative? Concerning the first research question, the authors' findings reveal purposes, characteristics, roles and tasks, and investment size of crowd-funding activity from the consumer's point of view. Regarding the second research question, the authors' analysis reveals purposes, service roles, and network effects of crowd-funding activity investigated from the point of view of the service organization that set up the initiative. Practical implications -The findings also have implications for service managers interested in launching and/or managing crowd-funding initiatives. Originality/value -The paper addresses an emerging phenomenon and contributes to service theory in terms of extending the consumer's role from co-production and co-creation to investment.

The Hidden Cost of Accommodating Crowdfunder Privacy Preferences: A Randomized Field Experiment

“…Online crowdfunding, defined as "a collective effort by individuals who network and pool their money together, usually via the Internet, to invest in or support the efforts of others" (Ordanini et al 2010), has received a great deal of attention from entrepreneurs and policymakers as a promising avenue to fostering entrepreneurship and innovation.…”

Profitable Nonprofits? Reward-Based Crowdfunding in the Czech Republic

“…However, several analyses show the signifi cant role of social media in project success (e.g. Mollick 2014;Ordanini et al 2011;and Giudici et al 2013). Second, instead of using the number of rewards, the quality of rewards could be included.…”

“…Bellefl amme et al 2014 used Kleeman et al 's defi nition (2008) of crowdsourcing and extended it to defi ne crowdfunding as a "an open call, essentially through the internet, for the provision of fi nancial resources either in form of a donation or in exchange for some form of reward and / or voting rights, in order to support initiatives for specifi c purposes" (Bellefl amme et al 2014, 588). Ordanini et al (2011) considered the internet to be a key element of crowdfunding. Joenssen et al (2014), however, argued that the basis of crowdfunding is not determined by the launch of crowdfunding campaigns on the internet and suggested that crowdfunding is "a process where commercial or non-commercial projects are initiated in a public announcement by organizations or individuals to receive funding, assess the market potential, and build customer relationships.…”

Social Media Analytics and Intelligence

“…Social media analytics is an act of collecting and interpreting the data posted on social media in order to conduct market research, learn about a target audience, collect feedback that drives strategic business decisions, etc [3]. With the growing number of population on social media, it's important to know what people talk about media whether it's for business, scientific or sociological reasons.…”