Measuring crowdfunding success for small and medium‐sized enterprises sustainable development: Insight from the social networking theory

Abstract

With little to no study on the effect of social networking theory on the success of a crowdfunding campaign in Africa, this study investigated some of the factors that influence the success of a crowdfunding campaign using Ghana as a case for a broader justification and generalization of findings that has been obtained in previous studies. This study identified four factors through an extensive literature review of the social networking theory. These are the number of social network handless of an entrepreneur, activeness of an entrepreneur on a social network, number of social network friends of an entrepreneur and the availability of project videos on an entrepreneur's social network. Data were then collected empirically from 462 respondents using a questionnaire. The data obtained were analyzed using the partial least square structural equation modeling. The results revealed that all the identified factors positively influence the success of a crowdfunding campaign. The study further proposes that fund seekers on the crowdfunding platform post their project information on weekends and evenings on weekdays since people pay special attention to information posted at these times. Also, the outcome of the importance performance map analysis disclosed that the number of social network handles of an entrepreneur is the most essential in terms of importance when seeking funds on the crowdfunding platform. This study provides valuable insight into how small and medium‐sized enterprises in Ghana and other stakeholders of crowdfunding platforms can use the concept of social networking theory to achieve funding success on crowdfunding platforms.