Author(s): Somboon Prasobpiboon, Roongkiat Ratanabanchuen, Achara Chandrachai and Sipat Triukose
Crowdfunding is an alternative fundraising channel for entrepreneurs who need seed funding to support their prototype production. Due to the risky nature of newly creative projects from entrepreneurs, a reward-based crowdfunding platform plays an important role in assisting early stage startups to raise their initial funds. Crowdfunding helps new business owners to fulfill their capital requirements through an Internet platform by funding relatively small amounts of money from large numbers of individual contributors. The purpose of this study is to identify key success factors that drive reward-based crowdfunding projects. We developed a research model that demonstrates backers’ satisfaction in financially contributing money to support reward-based crowdfunding projects and conducted empirical research to investigate this model. Our study focuses on entrepreneurial, project and campaign factors including the backers’ motivation in contributing their money in crowdfunding projects. The result shows that entrepreneurial experience in crowdfunding projects, multimedia use and the elaborateness of project description have significant positive effects on backers’ funding contributions. We also found that campaign conditions which consist of of campaign duration, funding goals and the delivery time of reward have a negative relationship with the backers’ contribution in crowdfunding projects. Furthermore, our analysis of the model in the context of backers’ motivation reveals that both individual and social satisfaction have a significant impact on backers’ funding contributions to crowdfunding projects. Consequently, this study also presents practical implications for entrepreneurs and reward-based crowdfunding platforms to focus on project preparation and implementation, including platform design, in order to increase the chances of success in reward-based crowdfunding.