Crowdfunding for Social Economy organisations: success factors

Thumbnail Image
Full text at PDC
Publication Date
Advisors (or tutors)
Journal Title
Journal ISSN
Volume Title
Facultad de Ciencias Económicas y Empresariales. Escuela de Estudios Cooperativos
Google Scholar
Research Projects
Organizational Units
Journal Issue
This paper aims to analyse the key success factors of crowdfunding based on rewards in social projects promoted by Social Economy organisations. For this purpose, we used the information from the Goteo database, which has been compiled manually, and consists of a total of 134 projects, involving around 12,321 investment decisions and a total amount raised of more than one million euros. By using the logit model, the following relevant conclusions have been obtained. First, the variables that have shown a positive effect on the chance of success of crowdfunding projects have been those related to the experience of the founders and the location of the project. Second, regarding the type of entity, associations are more successful than cooperatives, non-profit organizations, and foundations. Finally, the variable related to gender and human capital of the project members don’t have an influence on the success of the project.
Este artículo tiene como objetivo analizar los factores clave de éxito del crowdfunding basado en recompensas en proyectos sociales impulsados por organizaciones de Economía Social. Para ello, utilizamos la información de la base de datos Goteo, que ha sido recopilada manualmente, y está formada por un total de 134 proyectos, que suponen alrededor de 12.321 decisiones de inversión y un importe total recaudado superior a un millón de euros. Utilizando el modelo logit, se han obtenido las siguientes conclusiones relevantes. En primer lugar, las variables que han mostrado un efecto positivo sobre las posibilidades de éxito de los proyectos de crowdfunding han sido las relacionadas con la experiencia de los fundadores y la ubicación del proyecto. En segundo lugar, en cuanto al tipo de entidad, las asociaciones tienen más éxito que las cooperativas, las organizaciones sin fines de lucro y las fundaciones. Finalmente, la variable relacionada con el género y el capital humano de los miembros del proyecto no influye en el éxito del proyecto.
UCM subjects
Unesco subjects
Agrawal, A., Catalini, C., & Goldfarb, A. (2011) The geography of crowdfunding. The National Bureau of Economics Research. Retrieved from Agrawal, A., Catalini, C., & Goldfarb, A. (2014) Some simple economics of crowdfunding. In J. Lerner, & S. Stern (Eds.), NBER book series: Innovation policy and the economy, 14(1), pp. 63-97. Chicago: University of Chicago Press. Agrawal, A., Catalini, C., & Goldfarb. A. (2015) Crowdfunding: Geography, Social Networks, and the Timing of Investment Decisions. Journal of Economics & Management Strategy, 24 (2), pp. 253-274. Ahlers, G.K.C., Cumming, D., Günther, C., & Schweizer, D. (2015) Signaling in equity crowdfunding. Entrepreneurship Theory and Practice, 39(4), pp. 955–980. André, K., Bureau, S., Gautier, A., & Rubel, O. (2017) Beyond the Opposition Between Altruism and Self-interest: Reciprocal Giving in Reward-Based Crowdfunding. Journal of Business Ethics, 146 (2), pp. 313-332. Barasinska, N., & Schäfer, D. (2014) Is Crowdfunding Different? Evidence on the Relation between Gender and Funding Success from a German Peer-to-Peer Lending Platform. German Economic Review, 15(4), pp. 436-452. Baumgardner, T., Neufeld, C., Huang, P. C. T., Sondhi, T., Carlos, F., & Talha, M. A. (2017) Crowdfunding as a fast‐expanding market for the creation of capital and shared value. Thunderbird International Business Review, 59(1), pp. 115-126. Beckman, C. M., Burton, M. D., & O'Reilly, C. (2007) Early teams: The impact of team demography on VC financing and going public. Journal of Business Venturing, 22(2), pp. 147-173. Beier, M., & Wagner, K. (2014) Crowdfunding success of tourism projects: Evidence from Switzerland. Social Science Research Network. Retrieved 14/09/2021 from Belleflamme, P., Lambert, T., & Schwienbacher, A. (2014) Crowdfunding: Tapping the right crowd. Journal of Business Venturing, 29(5), pp. 585-609. Belleflamme P., Lambert T., & Schwienbacher A., (2013) Individual Crowdfunding Practices. Venture Capital: An International Journal of Entrepreneurial Finance, 15 (4), pp. 313-333. Burtch, G., Ghose, A., & Wattal, S. (2014) Cultural differences and geography as determinants of online prosocial lending. MIS Quarterly, 38(3), pp. 773-794. Cecere, G., Le Guel, F., & Rochelandet, F. (2017) Crowdfunding and social influence: an empirical investigation. Applied Economics, 49(57), pp. 5802-5813. Cha, J. (2017) Crowdfunding for video games: factors that influence the success of and capital pledged for campaigns. The International Journal on Media Management, 19(3), pp. 240-259. Chan, C. R., Park, H. D., Patel, P., & Gomulya, D. (2018) Reward-based crowdfunding success: decomposition of the project, product category, entrepreneur, and location effects. Venture Capital, 20(3), pp. 285-307. Chen, H., Gompers, P., Kovner, A., & Lerner, J. (2009) Buy Local? The geography of successful and unsuccessful venture capital expansion. National Bureau of Economic Research. Retrieved 15/09/2021 from Cholakova, M., & Clarysse, B. (2015) Does the possibility to make equity investments in crowdfunding projects crowd out reward–based investments? Entrepreneurship Theory and Practice, 39(1), pp. 145-172. Colombo, M. G., Franzoni, C., & Rossi–Lamastra, C. (2015) Internal social capital and the attraction of early contributions in crowdfunding. Entrepreneurship Theory and Practice, 39(1), pp. 75-100. Courtney, C., Dutta, S., & Li, Y. (2017) Resolving information asymmetry: Signaling, endorsement, and crowdfunding success. Entrepreneurship Theory and Practice, 41(2), pp. 265-290. Coval, J. D., & Moskowitz, T. J. (1999) Home bias at home: Local equity preference in domestic portfolios. The Journal of Finance, 54(6), pp. 2045-2073. Cumming, D. J., Leboeuf, G., & Schwienbacher, A. (2020) Crowdfunding models: Keep‐it‐all vs. all‐or‐nothing. Financial Management, 49(2), pp. 331-360. Davies, R. (2014) Civic crowdfunding: participatory communities, entrepreneurs and the political economy of place. Entrepreneurs and the Political Economy of Place (May 9, 2014). Franke, N., Gruber, M., Harhoff, D., & Henkel, J. (2008) Venture capitalists’ evaluations of start-up teams: Trade-offs, knock-out Criteria, and the impact of VC experience. Entrepreneurship, Theory and Practice, 32(3), pp. 459-483. Gras, D., Nason, R. S., Lerman, M., & Stellini, M. (2017) Going Offline: Broadening Crowdfunding Research beyond the Online Context. Venture Capital, 19 (3), pp. 217–237. Greenberg, J., & Mollick, E. (2015) Leaning in or Leaning On? Gender, Homophily, and Activism in Crowdfunding. In Academy of Management Proceedings: SSRN Electronic Journal. Greenberg, J., & Mollick, E. (2017) Activist choice homophily and the crowdfunding of female founders. Administrative Science Quarterly, 62(2), pp. 341-374. Guttmann A. (2021) Commons and cooperatives: A new governance of collective action. Annals of Public and Cooperative Economics, 92(1), pp. 33-53. Hobbs, J., Grigore, G., & Molesworth, M. (2016) Success in the management of crowdfunding projects in the creative industries. Internet Research, 26, pp. 146–166. Hörisch, J. (2015) Crowdfunding for environmental ventures: an empirical analysis of the influence of environmental orientation on the success of crowdfunding initiatives. Journal of Cleaner Production, 107, pp. 636-645. Janků, J., & Kučerová, Z. (2018) Successful Crowdfunding Campaigns: The role of project specifics, competition and founders’ experience. Czech Journal of Economics and Finance, 68, pp. 351–73. Josefy, M., Dean, T. J., Albert, L. S., & Fitza, M. A. (2017) The role of community in crowdfunding success: Evidence on cultural attributes in funding campaigns to “save the local theater”. Entrepreneurship Theory and Practice, 41(2), pp. 161-182. Kenost, C. M. (2016) Crowdfunding: Is It a Viable Financial Model for Nonprofits? All Capstone Projects. Paper 231. Knudsen, B., Florida, R., Gates, G., & Stolarick, K. (2007) Urban density, creativity, and innovation. Working paper. Retrieved 15/09/2021 from Koch, J. A., & Siering, M. (2015) Crowdfunding success factors: The characteristics of successfully funded projects on crowdfunding platforms. ECIS. Kshetri, N. (2015) Success of crowd-based online technology in fundraising: An institutional perspective. Journal of International Management, 21(2), pp. 100-116. Kunz, M. M., Bretschneider, U., Erler, M., & Leimeister, J. M. (2017) An empirical investigation of signaling in reward-based crowdfunding. Electronic Commerce Research, 17(3), pp. 425-461. Kuppuswamy, V., & Bayus, B. L. (2017) Does my contribution to your crowdfunding project matter? Journal of Business Venturing, 32(1), pp. 72-89. Lai, S., & Teo, M. (2008) Home‐biased analysts in emerging markets. Journal of Financial & Quantitative Analysis, 43(3), pp. 685-716. Lin, M., & Viswanathan, S. (2013) Home bias in online investments: An empirical study of an online crowd funding market. Social Science Research Network. Retrieved 15/09/2021 from Lin, M., & Viswanathan, S. (2016) Home Bias in Online Investments: An Empirical Study of an Online Crowdfunding Market. Management Science, 62 (5), pp. 1393–1414. Löher, J., Schneck, S., & Werner, A. (2018) A research note on entrepreneurs’ financial commitment and crowdfunding success. Venture Capital, 20(3), pp. 309-322. Lukkarinen, A., Teich, J. E., Wallenius, H., & Wallenius, J. (2016) Success drivers of online equity crowdfunding campaigns. Decision Support Systems, 87, pp. 26–38. Majumdar, A., & Bose, I. (2018) My words for your pizza: An analysis of persuasive narratives in online crowdfunding. Information & Management, 55(6), pp. 781-794 Marom, D., Robb, A., & Sade, O. (2014) Gender dynamics in crowdfunding (kickstarter). SSRN Work. Pap, 2442954. McFadden, D. (1974) Conditional logit analysis of qualitative choice behavior. In Frontiers in Econometrics, ed. Zarembka, New York: Academic Press, 105-142. Michelucci, F. V., & Rota, F. S. (2014) The success of non-profit crowdfunding: First evidences from the Italian web-platforms. Torino: DIGEP—Dipartimento di Ingegneria Gestionale e della Produzione, Politecnico di Torino, 1-16. Moleskis, M., Alegre,I., & Canela, M.A. (2018) Crowdfunding Entrepreneurial or Humanitarian Needs? The Influence of Signals and Biases on Decisions. Nonprofit and Voluntary Sector Quarterly, 1–20. Mollick, E. (2014) The Dynamics of Crowdfunding: An Exploratory Study. Journal of Business Venturing, 29 (1), pp. 1-16. Monzón, J. L., & Chaves, R. (2012) The social economy in the European Union. CIRIEC International, European Economic and Social Committee, Brussels. Ordanini, A. (2009) Crowdfunding: customers as investors. The Wall Street Journal, 23(3), pp. 5-7. Ordanini, A., Miceli, L., Pizzetti, M., & Parasuraman, A. (2011) Crowdfunding: transforming customers into investors through innovative service platforms. Journal of Service Management, 22 (4), pp. 443–470. Phan P. H., Bacq S., & Nordqvist M. (2014) Theory and Empirical Research in Social Entrepreneurship, Northampton: Edward Elgar. Pape, U., Brandsen, T., Pahl, J. B., Pieliński, B., Baturina, D., Brookes, N., & Zimmer, A. (2019) Changing Policy Environments in Europe and the Resilience of the Third Sector. Voluntas: International Journal of Voluntary and Nonprofit Organizations, pp. 1-12. Pitschner, S., & Pitschner-Finn, S. (2014) Non-profit differentials in crowd-based financing: Evidence from 50,000 campaigns. Economics Letters, 123(3), pp. 391–394. Rau, P. R. (2020) Law, trust, and the development of crowdfunding. Trust, and the Development of Crowdfunding (July 1, 2020). Rey-Martí, A., Mohedano-Suanes, A., & Simón-Moya, V. (2019) Crowdfunding and social entrepreneurship: spotlight on intermediaries. Sustainability, 11 (4), 1175. Sánchez Espada, J., Martín López, S., Bel Durán, P., & Lejarriaga Pérez de las Vacas, G. (2018) Educación y formación en emprendimiento social: características y creación de valor social sostenible en proyectos de emprendimiento social. REVESCO. Revista de Estudios Cooperativos, Tercer Cuatrimestre, Nº 129, pp. 16-38. DOI: 10.5209/reve.62492. Saxenian, A. (1996) Regional advantage: Culture and competition in Silicon Valley and Route 128. Boston, MA: Harvard University Press. Short, J., Ketche, D., McKenny, A., Allison, Th. & Ireland, D. (2017) Research on Crowdfunding: Reviewing the (Very Recent) past and Celebrating the Present. Entrepreneurship Theory and Practice, 41 (2), pp. 149-160. Schneor, R., & Munim, Z.H. (2019) Reward crowdfunding contribution as planned behaviour: An extended framework. Journal of Business Research 103, pp. 56-70. Skirnevskiy, V., Bendig, D., & Brettel, M. (2017) The influence of internal social capital on serial creators’ success in crowdfunding. Entrepreneurship Theory and Practice, 41(2), pp. 209-236. DOI:10.1111/etap.12272. Strong, N., & Xu, X. (2003) Understanding the equity home bias: Evidence from survey data. The Review of Economics and Statistics, 85(2), pp. 307-312. Stuart, T., & Sorenson, O. (2003) Liquidity events and the geographic distribution of entrepreneurial activity. Administrative Science Quarterly, 48(2), pp. 175-201. Viotto, J. (2015) Competition and Regulation of Crowdfunding Platforms: A Two-sided Market Approach. Communications & Strategies, 99 (3), pp. 33-50. Vismara, S. (2016) Equity retention and social network theory in equity crowdfunding. Small Business Economics, 46(4), pp. 579-590. Wan, W. W. N., Luk, C.L., Fam, K.S., Wu, P., & Chow, C. W. C. (2012) Interpersonal relationship, service quality, seller expertise: How important are they to adolescent consumers? Psychology & Marketing, 29(5), pp. 365-377. Yang, L., & Hahn, J. (2015) Learning from prior experience: an empirical study of serial entrepreneurs in IT-enabled crowdfunding. The 36th International Conference on Information Systems, Fort Worth, TX. Yu, S., Johnson, S., Lai, C., Cricelli, A., & Fleming, L. (2017) Crowdfunding and regional entrepreneurial investment: an application of the CrowdBerkeley database. Research Policy, 46(10), pp. 1723-1737. Zheng, H., Li, D., Wu, J., & Xu, Y. (2014) The role of multidimensional social capital in crowdfunding: a comparative study in China and US. Information Management, 51(4), pp. 488-496. Zhou, H., & Ye, S. (2018) Legitimacy, Worthiness, and Social Network: An empirical study of the key factors influencing crowdfunding outcomes for non-profit projects. Voluntas: International Journal of Voluntary and Non-profit Organizations, 30(4), pp. 1-16.