Development of a Theory That Explains Why Funders of Reward-Based Crowdfunding Campaigns Cancel or Decrease Previously Made Pledges
Muma Business Review • Volume 7 • 2023 • pp. 023-052
Crowdfunding research has primarily been composed of attempts to identify crowdfunding performance and success factors. A research gap exists concerning funder motivations and behaviors as well as the dynamics that occur with pledge changes during crowdfunding campaigns. Therefore, understanding funder motivations and pledging behaviors during reward-based crowdfunding campaigns was the focus of this inquiry. Using a grounded theory design, I conducted 18 individual semi-structured interviews with funders to understand why they canceled or decreased their already-made pledges to reward-based crowdfunding campaigns. A constant-comparative analysis of the interviews yielded a novel theory describing the factors that motivate and deter funders as well as the contexts in which they occur. The identified funder motivations are reward hunting, financial hardship, purchase later, cost, risk, competition in category, ethical concerns, satisfy others, and goal proximity. Deterrents include rarity and fear of missing out, impact, small company size, trust, and investment. An analysis of these motivations and deterrents in light of recognized crowdfunding success factors is shared, and implications for future reward-based crowdfunding research into funder motivations, behavior, and campaign dynamics are presented. Lastly, I present design principles that fundraisers can use to design and conduct their campaigns in a manner likely to decrease the number of funders canceling and decreasing their pledges while maintaining a plan likely to lead to campaign success or increased performance.
Entrepreneurship, Crowdfunding, Motivation, Qualitative, Grounded Theory, Cancel, Decrease
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