To bring their innovative ideas to market, those embarking in new ventures have to raise money, and, to do so, they have often resorted to banks and venture capitalists. Nowadays, they have an additional option: that of crowdfunding. The name refers to the idea that funds come from a network of people on the Internet who are passionate about supporting others' projects. One of the most popular crowdfunding sites is Kickstarter. In it, creators post descriptions of their projects and advertise them on social media sites (mainly Twitter), while investors look for projects to support. The most common reason for project failure is the inability of founders to connect with a sufficient number of investors, and that is mainly because hitherto there has not been any automatic way of matching creators and investors. We thus set out to propose different ways of recommending investors found on Twitter for specific Kickstarter projects. We do so by conducting hypothesis-driven analyses of pledging behavior and translate the corresponding findings into different recommendation strategies. The best strategy achieves, on average, 84 of accuracy in predicting a list of potential investors' Twitter accounts for any given project. Our findings also produced key insights about the whys and wherefores of investors deciding to support innovative efforts.
Crowdfunding has recently attracted the attention of researchers in various disciplines, from business and economics to computer science. Economists have investigated pleading behavior and they, for example, found that crowdfunding eliminates distance-related economic frictions, yet initial findings tend often to come from family, friends and acquaintances @cite_17 .
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Perhaps the most striking feature of "crowdfunding" is the broad geographic dispersion of investors in small, early-stage projects. This contrasts with existing theories that predict entrepreneurs and investors will be co-located due to distance-sensitive costs. We examine a crowdfunding setting that connects artist-entrepreneurs with investors over the internet for financing musical projects. The average distance between artists and investors is about 3,000 miles, suggesting a reduced role for spatial proximity. Still, distance does play a role. Within a single round of financing, local investors invest relatively early, and they appear less responsive to decisions by other investors. We show this geography effect is driven by investors who likely have a personal connection with the artist-entrepreneur ("family and friends"). Although the online platform seems to eliminate most distance-related economic frictions such as monitoring progress, providing input, and gathering information, it does not eliminate social-related frictions. Crowdfunding is a process where commercial or non-commercial projects are initiated in a public announcement by organizations or individuals to receive funding, assess the market potential, and build customer relationships. Crowdfunding is employed in a variety of different categories, ranging from technology to arts and even disaster relief. Even though crowd-funding has received widespread attention, not only in the media, literature on the subject is still sparse and lacks especially empirical research. In contrast, research in new product preannouncement is established and more mature, and, due to similarities in process and goals, yields entry points for crowdfunding research. This paper contributes by reducing the gap in crowdfunding research by drawing on insights from new product preannouncement literature. To this end, a common definition of crowdfunding, which is currently lacking in literature, is derived and used to characterize commonalities with new product preannouncement. This theoretical discussion is complemented by empirically testing the derived hypotheses about common success factors. Conclusions are drawn from the logistic-regression, using the technology category of a project dataset with 45,400 observations. Research shows that while timing and communication are key success factors, common to both new product preannouncement and crowdfunding, other success factors may already be standard and cannot separate the successful crowdfunding projects from the unsuccessful. Entrepreneurs are turning to crowdfunding as a way to finance their creative ideas. Crowdfunding involves relatively small contributions of many consumer-investors over a fixed time period (generally a few weeks). The purpose of this paper is to add to our empirical understanding of backer dynamics over the project funding cycle. Two years of publicly available data on projects listed on Kickstarter is used to establish that the typical pattern of project support is U-shaped — in general, backers are more likely to contribute to a project in the first and last week as compared to the middle period of the funding cycle. We further establish that this U-shape pattern of support is pervasive across projects, including both successfully and unsuccessfully funded projects, those with large and small goals, and projects in different categories. We then empirically explore the dynamics associated with several factors, including collective attention effects from platform sorting options, the role of family and friends in supporting projects, the effects of social influence, and the role of project updates over the project funding cycle. Crowdfunding -- in which people can raise funds through collaborative contributions of general public (i.e., crowd) -- has emerged as a billion dollars business for supporting more than one million ventures. However, very few research works have examined the process of crowdfunding. In particular, none has studied how social networks help crowdfunding projects to succeed. To gain insights into the effects of social networks in crowdfunding, we analyze the hidden connections between the fundraising results of projects on crowdfunding websites and the corresponding promotion campaigns in social media. Our analysis considers the dynamics of crowdfunding from two aspects: how fundraising activities and promotional activities on social media simultaneously evolve over time, and how the promotion campaigns influence the final outcomes. From our investigation, we identify a number of important principles that provide a useful guide for devising effective campaigns. For example, we observe temporal distribution of customer interest, strong correlations between a crowdfunding project's early promotional activities and the final outcomes, and the importance of concurrent promotion from multiple sources. We then show that these discoveries can help predict several important quantities, including overall popularity and the success rate of the project. Finally, we show how to use these discoveries to help design crowdfunding sites.