Crowdfunding Platform as an Open Innovation Model: The Importance of Effective Platform Governance

Abstract

Crowdfunding Platform (CFP) is another financing model that is different from the traditional financial institutions. CFP serves not only as a fundraising tool but also as a source of knowledge. CFP has several forms, namely equity-based, lending-based, reward-based, and donation-based. These forms of CFP divided into two classes, investment-based and non-investment-based. CFP is one form of platform Open Innovation (OI), where multiple stakeholders are involved in a funded project. OI refers to the collaborative innovation process. The involvement of multiple parties in OI leads to various risks that can result in collaboration failure, thus preventing the achievement of established CFP goals. Therefore, there is a need for effective governance in OI to manage potential conflicts, coordinate efficient knowledge sharing among the involved parties, and achieve the main objectives of the collaboration.