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Why are rewards not delivered on time in rewards-based crowdfunding campaigns? An empirical exploration

Francesco Appio (), Daniele Leone, Federico Platania and Francesco Schiavone

Technological Forecasting and Social Change, 2020, vol. 157, issue C

Abstract: Crowdfunding is an alternative way to seek capital for new projects. However, it can also be a danger for entrepreneurs facing the post-campaign phase delays in the delivery of the promised rewards. Crowdfunding campaigns require months of preparation and meeting delivery deadlines seems to be a real problem. With this study, we try to explain why this is the case. By drawing on a dataset of 1,567 successfully funded new technological projects in the period 2009–2017, and by means of a text mining routine, this study presents a comprehensive description of the causes of delay in rewards delivery in crowdfunding campaigns. Our findings reveal that perceived incompetence, fraud, and funding cancellation, are the main causes of delay in rewards delivery. Furthermore, controlling for the presence of serial project creators, project appeal (% of new backers), project complexity (number of FAQs, days of funding, number of updates, number of comments), project financial size (% funded, amount raised, financial goal, average pledge per backer), as well as time, mitigate but does not eliminate the problem. Results provide a thorough contribution and implications for both the agents of the crowdfunding industry (e.g., creators, backers), platform managers, and the academic community.

Keywords: Crowdfunding campaigns; Causes of delay; Technology projects; Perceived incompetence; Fraud; Cancelled funding (search for similar items in EconPapers)
JEL-codes: D83 G21 G24 L26 M21 O32 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.techfore.2020.120069

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