Launch on a High Note: How Prefunding Strategies Affect Crowdfunding Outcomes

Aravinda Garimella, Suresh Kotha, Ming Fan, Weijia You

Research output: Contribution to conferencePaperpeer-review

Abstract

Recently, the phenomenon of crowdfunding has surfaced as an innovative way to raise capital for venture opportunities online. Using data from a unique crowdfunding platform, we examine whether opting for “prefunding”, or raising awareness prior to fund-raising, increases the likelihood of a campaign meeting its fund-raising goal. We also examine how prefunding activities influence fundraising dynamics to show that prefunding activities significantly increase the likelihood of a campaign meeting its fund-raising goal, and that the relationship between prefunding and project success is mediated by the number of backers and quality of backers. We take an in-depth look at projects that use prefunding and find that it is effective when entrepreneurs keep potential backers informed and ensure that they are engaged.

Original languageEnglish (US)
StatePublished - 2018
Externally publishedYes
Event38th International Conference on Information Systems: Transforming Society with Digital Innovation, ICIS 2017 - Seoul, Korea, Republic of
Duration: Dec 10 2017Dec 13 2017

Conference

Conference38th International Conference on Information Systems: Transforming Society with Digital Innovation, ICIS 2017
CountryKorea, Republic of
CitySeoul
Period12/10/1712/13/17

Keywords

  • Crowdfunding
  • Peer-to-peer communities
  • Prefunding

ASJC Scopus subject areas

  • Computer Science Applications
  • Information Systems

Cite this