Edited by Russell W. Belk, Giana M. Eckhardt and Fleura Bardhi
Chapter 12: Crowdfunding: sharing the entrepreneurial journey
Crowdfunding refers to obtaining “funding” for an entrepreneurial venture (a “project”) from a large community (the “crowd”). Why do people (backers) spend time, effort, and personal funds to support the development and promotion of an entrepreneurial venture by another? There are many inherent, non-negligible risks associated with entrepreneurial ventures. Furthermore, in rewards-based crowdfunding, which is the most widespread form of crowdfunding with the largest number of online platforms, even if a project succeeds, its backers will not benefit financially from its commercial success. In this chapter, the authors discuss two key human motivations-affiliation or belongingness, and status or power in a community-that may explain participation in crowdfunding. In addition, they describe the current role of crowdfunding in the entrepreneurial ecosystem, and speculate on its future, given these two motivations.
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