UCL logo

UCL Discovery

UCL home » Library Services » Electronic resources » UCL Discovery

The Role of Customer Investor Involvement in Crowdfunding Success

Cornelius, P; Gokpinar, B; (2016) The Role of Customer Investor Involvement in Crowdfunding Success. In: (Proceedings) 14th International Open and User Innovation Conference. Harvard Business School Green open access

[img]
Preview
Text
The Role of Customer Investor Involvement in Crowdfunding Success.pdf - ["content_typename_Accepted version" not defined]

Download (878kB) | Preview

Abstract

Entrepreneurs increasingly use reward-based crowdfunding to finance innovation projects through a large number of customer investments. The existing academic literature has predominantly studied the process and the efficiency of these crowd investments. However, we argue that the involvement of customers goes beyond the provision of capital. As investors, customers enter a principal-agent relationship with project creators. As a result, project creators are often confronted with a crowd of customer investors who try to influence the development of product ideas. We show that project creators can actually benefit from this influence, as customer investors partly substitute for the support usually received from conventional investors. Greater involvement of customer investors thus increases the likelihood of funding success. This holds when we control for creator ability and project quality. However, the positive effect of involvement is lower for teams, because customers face lower agency costs when they invest in team projects. We also link the involvement of customer investors during crowdfunding to the crowdsourcing literature and show that its positive effect can be attributed to the elicitation of external information through distant search.

Type: Proceedings paper
Title: The Role of Customer Investor Involvement in Crowdfunding Success
Event: 14th International Open and User Innovation Conference
Location: Harvard Business School
Dates: 01 August 2016 - 03 August 2016
Open access status: An open access version is available from UCL Discovery
Publisher version: https://digital.hbs.edu/events/oui/
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management
URI: http://discovery.ucl.ac.uk/id/eprint/10059531
Downloads since deposit
47Downloads
Download activity - last month
Download activity - last 12 months
Downloads by country - last 12 months

Archive Staff Only

View Item View Item