Crowfunding and Innovation

Fabrice Herve and Armin Schwienbacher

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Abstract: Entrepreneurs have started relying on crowdfunding to fund their investments. This paper surveys the literature linking crowdfunding with innovation in entrepreneurial firms. Two distinct areas are discussed. First, crowdfunding has the potential to foster innovation by offering new sources of capital to innovation‐driven firms and thereby reduce the funding gap for innovative startups. Second, crowdfunding offers a way for the crowd to participate in the innovation process by providing feedback to the entrepreneur. This feedback can take various forms, including providing ideas on the development of the product during and after the campaign (in the spirit of crowdsourcing), and providing valuable information on the future demand for the new product.

Keywords: Crowdfunding; Innovation; entrepreneurial finance (search for similar items in EconPapers)
Date: 2018-12
Note: View the original document on HAL open archive server: https://ube.hal.science/hal-01875915v1
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Published in Journal of Economic Surveys, 2018, Issue 5 (32), pp.1514-1530. ⟨10.1111/joes.12274⟩

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Journal Article: CROWDFUNDING AND INNOVATION (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01875915

DOI: 10.1111/joes.12274

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