Key success-determinants of crowdfunded projects: An exploratory analysis

Abstract

Crowdfunding, a process with which enterprises or individuals seek to secure project funding, has received much attention recently, not only from the media. The boon in visibility provided to crowdfunding by Internet platforms has made securing project funding, by soliciting pledges from potential donors, simpler than ever. A popular way of allocating funding, and thus bypassing traditional venture capital providers, is by setting a reserve pledge-sum. If this pledge-sum is achieved, the promised pledges are collected from the project supporters. Upon project completion, these pledgers receive a compensation, which is usually nonmonetary and based on the magnitude of their contribution. Projects funded in this way include a wide topic variety, ranging from hardware manufacturing to fine arts and even disaster relief. This study investigates possible key success factors for attaining the reserve pledge-sum. To this end, data on 45,400 crowdfunding campaigns was collected and key success factors were analyzed using the results of a logistic-regression. The results indicate that communications and professionalism have a high impact on funding success, and that such communication measures as having a unique website set a minimum standard. Further conclusions allow practitioners to positively influence the campaign outcome and researchers to build upon the results of this study.