Untangling signalling strategies contributing to overfunding in reward-based crowdfunding

  1. Pau Sendra-Pons 1
  2. Dolores Garzon 1
  3. María-Ángeles Revilla-Camacho 2
  1. 1 Universitat de València
    info

    Universitat de València

    Valencia, España

    ROR https://ror.org/043nxc105

  2. 2 Universidad de Sevilla
    info

    Universidad de Sevilla

    Sevilla, España

    ROR https://ror.org/03yxnpp24

Revista:
European Research on Management and Business Economics

ISSN: 2444-8834

Año de publicación: 2024

Volumen: 30

Número: 2

Páginas: 124-132

Tipo: Artículo

DOI: 10.1016/J.IEDEEN.2024.100251 DIALNET GOOGLE SCHOLAR

Otras publicaciones en: European Research on Management and Business Economics

Resumen

Crowdfunding is an Internet-based fundraising method that relies on contributions from a large crowd of investors to fund innovative and risky projects. The aim of this paper is to analyse which combinations of signals commonly studied for crowdfunding success lead to overfunding. Based on the information asymmetries between fund-seeking entrepreneurs and the crowd, this paper draws on signalling theory to explore the elements of campaign design that contribute to overfunding (i.e. raising at least 10 % above the funding target). The paper focuses on the entrepreneur's identity as an individual or corporation, pitch video length, budget explanation length, number of images, project abstract length, and number of updates by the entrepreneur. Qualitative comparative analysis (QCA) is performed using publicly available data sourced from 257 socially oriented projects from a reward-based crowdfunding platform. The results show the importance for entrepreneurs of using images and constantly communicating with the crowd. The results also reveal a series of configurations of design features that result in overfunding. These findings have practical implications for the design of reward-based crowdfunding campaigns and contribute to a better understanding of how economic agents interact within crowdfunding.

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