Investigations of entrepreneurial activities in crowdfunding
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Crowdfunding is heralded as ‘the next big thing’ in venture capital, advocating the democratisation of capital access for entrepreneurs through online mechanisms. However, current research indicates that entrepreneurs experience high failure rates in crowdfunding, similar to ‘traditional’ venture capital approaches. This stresses the need for investigations that unveil why some crowdfunding campaigns succeed and others fail. This thesis examines entrepreneurial activities associated with capital assembly through crowdfunding and comprises a portfolio of three empirical studies. These may be read independently or conjointly, the latter of which allows for a more nuanced understanding of entrepreneurial crowdfunding. The first study adopts an explorative quantitative research approach, utilising records of 421 crowdfunding campaigns published on Kickstarter, a leading reward-based online crowdfunding platform. Various crowdfunding campaign characteristics are investigated to analyse how these features drive fundraising performance and outcomes. Findings reveal that entrepreneurs can exploit particular online pitch elements to create a project narrative, which enables them to establish project legitimacy within the context of crowdfunding platform communities. The second study utilises a dataset of 81,829 crowdfunding campaigns and multivariate and probit analysis methods to examine the role of the entrepreneurs’ network size and the quality of the network relationship for capital assembly and fundraising outcome in crowdfunding. The analysis demonstrates that the quality of the network relationship, in addition to the size of the network, contributes to crowdfunding performance and outcomes. Results show that the relationship between the quality of the network relationship, the size of the network and capital assembly in crowdfunding are positive. Further, the results highlight that the addition of network relationship quality specifications improve the explanation of variation in capital assembly. This suggests that estimations that do not include network relationship variables are ineffective in explaining how entrepreneurs can facilitate capital assembly and achieve success in crowdfunding. Accordingly, the study emphasises the role and importance of network relationship quality activities as additional determinants of crowdfunding outcomes. This study enunciates the importance for entrepreneurs to form ‘project-syndicates’, a project-related community that co-creates the project narrative and legitimacy, leading to better fundraising performance and outcomes. The third study complements the two previously discussed quantitative studies by comprising qualitative data that elicits interpretations over a twenty-four month period in a longitudinal single case study. This study investigates the role, behaviour and experience of entrepreneurs during the crowdfunding process and relates entrepreneurial activities to fundraising performance. This study reveals three identity strategies, demonstrating how the entrepreneur can leapfrog from one side of the bimodal funding distribution in crowdfunding to the other extreme following an identity transition. This study sheds light on the entrepreneurial micro-foundations of crowdfunding by focusing on the entrepreneur’s processes pre-, during and post-crowdfunding. As such, this research provides valuable insights into entrepreneurial crowdfunding. This thesis, taken as a whole, contributes to the understanding of entrepreneurial capital assembly through crowdfunding, and develops new theory that advances the current knowledge of crowdfunding performance and outcomes. As such, this thesis contributes to entrepreneurship theory by investigating crowdfunding from three different perspectives, utilising theories related to entrepreneurial narratives and legitimacy, networking and role identity to study the unique context of crowdfunding, where much remains to be explored.