An empirical investigation of entrepreneurs’ communication and gamification strategies in crowdfunding

Crowdfunding is an increasingly popular financing platform that allows entrepreneurs of new products and services to raise capital from a large pool of potential funders (i.e., investors). Unlike conventional funders, crowdfunding funders do not acquire equity in or make loans to ventures. Instead, they receive a non-monetary return in the form of pre-ordered products or services. Crowdfunding funders know that these early-stage investments typically entail risks such as unproven technologies, unfinished products, and untried services, the true quality, marketability and efficacy of which are untested. Yet entrepreneurs regularly succeed in attracting funders through crowdfunding platforms, indicating that the project campaign description is critical to their success. Therefore, developing effective digital communication is particularly important to crowdfunding entrepreneurs. A successful project campaign message must effectively communicate core values and establish an emotional connection with potential funders. This dissertation research sheds light on understanding the effects of project campaign descriptions in a crowdfunding context, focusing especially on how linguistic cues in project campaign descriptions and gamification can attract funders to a project and become motivated to support it. Specifically, this dissertation investigates how a project campaign’s linguistic cues—promoting entrepreneurs’ prosocial values and creating a sense of unity—can generate greater crowd support for entrepreneurs. This study also empirically examines gamification as a motivator on crowdfunding performance. Given the multifaceted nature of potential funders’ intrinsic motivation within crowdfunding environments, especially on reward-based crowdfunding platforms, this research examines the role of gamification in amplifying the effect of entrepreneurs’ prosocial mission cues on crowdfunding success. Using a dataset from Kickstarter and a controlled experimental study, I find that emphasizing prosocial missions and a sense of unity on project campaign descriptions increases the chance of crowdfunding success. Furthermore, conveying gamification features (i.e., subordinate challenging goals) in project campaigns can also be shown to directly contribute to meeting funding goals. In summary, this dissertation provides evidence that the effectiveness of prosocial mission cues on crowdfunding success is enhanced when the sense of unity increases and the project campaign displays gamification features.Ph.D.Includes bibliographical reference