(No) Time for Change: When and Why Entrepreneurs Act During Underperforming Fundraising Attempts

Hendrik Wilhelm (), Norbert Steigenberger (), Clarissa E. Weber (), Jouni K. Juntunen () and Mark Ebers ()
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Hendrik Wilhelm: Faculty of Management, Economics and Society, Witten/Herdecke University, 58455 Witten, Germany
Norbert Steigenberger: Umeå School of Business, Economics and Statistics, Umeå University, 901 87 Umeå, Sweden; Media, Management, and Transformation Center, Jönköping International Business School, 55111 Jönköping, Sweden
Clarissa E. Weber: Faculty of Business and Economics, University of Göttingen, 37073 Göttingen, Germany
Jouni K. Juntunen: School of Technology and Innovations, and Innovation and Entrepreneurship InnoLab, University of Vaasa, 65200 Vaasa, Finland
Mark Ebers: Faculty of Management, Economics and Social Sciences, University of Cologne, 50672 Cologne, Germany

Organization Science, 2024, vol. 35, issue 4, 1299-1321

Abstract: Entrepreneurs need to mobilize funds, but they do so under considerable uncertainty about resource holders’ preferences, leading often to fundraising attempts that perform below entrepreneurs’ aspirations. Past research has offered contrasting theorizing and evidence for why entrepreneurs then make changes to their product offering during such attempts as well as for why entrepreneurs refrain from taking such action. This paper develops and tests behavioral theory to reconcile this tension, explicating when and why entrepreneurs change their product offering during underperforming fundraising attempts. Specifically, we argue that entrepreneurs draw on three sources of information that are inherent to fundraising attempts and that inform the extent of their actions to change their product offering: the degree to which they perform below their own fundraising aspirations, the degree to which they fall below peer fundraising performance, and the time that remains until the deadline for the fundraising attempt. Longitudinal data on 576 fundraising campaigns (6,758 observations) published on the crowdfunding platform Kickstarter support our theory. By developing novel behavioral theory on when and why entrepreneurs take action during resource mobilization, we offer contributions to research on entrepreneurial resource mobilization, the crowdfunding literature, and the Behavioral Theory of the Firm.

Keywords: entrepreneurship; resource mobilization; crowdfunding; behavioral theory of the firm; aspiration levels; longitudinal research design (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:35:y:2024:i:4:p:1299-1321

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