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

Aravinda Garimella, Suresh Kotha, Ming Fan, Weijia You

Research output: Chapter in Book/Report/Conference proceedingConference contribution

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)
Title of host publicationICIS 2017
Subtitle of host publicationTransforming Society with Digital Innovation
PublisherAssociation for Information Systems
ISBN (Print)9780996683159
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

Publication series

NameICIS 2017: Transforming Society with Digital Innovation

Conference

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

Keywords

  • Crowdfunding
  • Peer-to-peer communities
  • Prefunding

ASJC Scopus subject areas

  • Computer Science Applications
  • Information Systems

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