SUCCESS DRIVERS OF REWARD-BASED CROWDFUNDING CAMPAIGNS

Abstract

While the crowdfunding phenomenon has attracted considerable practitioner and scholarly attention, existing research does not allow us to fully understand the determinants of crowdfunding campaigns performance. This is a key question within crowdfunding research to date. Using the most popular crowdfunding platform in Portugal (PPL crowdfunding), we constructed a data set to capture campaign characteristics and funding outcomes. We focused on 347 PPL campaigns initiated and ended in 2017 to test our hypotheses. Data were compiled from campaign descriptions and final result appearing on the PPL platform. This platform uses a rewards-based model where founders receive tangible, nonmonetary rewards for their contributions, often in the form of products /services, or tokens of appreciation such as thank you notes. Using a binary logistic regression model this paper investigates the factors driving a campaign’s success. Such factors include project goal (euros), duration of campaign, facebook shares, geographic distance, project comments, communication quality, type of founders and number of backers. The dependent variable is a dichotomous variable (0/1) that indicates whether a project has received the full target amount. We use this success indicator to assess whether projects that received full funding generally differ significantly from projects that did not. Our results highlight the importance of some variables related to the project and the role of social networks on funding success rewards-based crowdfunding. These conclusions offer new insights into the dynamics of rewards-based crowdfunding.