Choosing crowdfunding: Why do entrepreneurs choose to engage in crowdfunding?

Louise Bech Junge, Iben Cleveland Laursen and Kristian Roed Nielsen

Technovation, 2022, vol. 111, issue C

Abstract: As crowdfunding becomes an increasingly common source of financing for a diverse range of entrepreneurs, this paper seeks to add to the literature by qualitatively exploring why entrepreneurs choose to engage in crowdfunding. We find that entrepreneurs often engage in crowdfunding as a first resort with three distinct motives; to raise capital, to validate a business idea, or to create brand awareness. Especially reward-based crowdfunding is often seen as a tool for validate a business idea or generating awareness not as a source of finance. Finally we observe that entrepreneurs’ motives for engaging in crowdfunding often correlate with their maturity and thus motivations for engaging in crowdfunding shift as they mature.

Keywords: Crowdfunding; Entrepreneurship; Finance; Life cycle; Motivation (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:techno:v:111:y:2022:i:c:s0166497221001668

DOI: 10.1016/j.technovation.2021.102385

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