Academic Research on Crowdfunders: What's Been Done and What's To Come?

• Date: 01 March 2015
• DOI: http://doi.org/10.1002/jsc.2010
• Author: Jamie Weatherston,Stephanie A. Macht
• Published date: 01 March 2015

Strat. Change 24: 191–205 (2015)

Published online in Wiley Online Library

(wileyonlinelibrary.com) DOI: 10.1002/jsc.2010 RESEARCH ARTICLE

Copyright © 2015 John Wiley & Sons, Ltd.

Strategic Change: Brie ngs in Entrepreneurial Finance

Strategic Change

DOI: 10.1002/jsc.2010

Academic Research on Crowdfunders: What ’ s Been

Done and What ’ s To Come?

1

Stephanie A. Macht

Newcastle Business School , Northumbria University , UK

Jamie Weatherston

Newcastle Business School , Northumbria University , UK

Nowadays, the media is rife with stories about individuals who raise sometimes

moderate, sometimes substantial amounts of capital from large numbers of

‘normal’ people.  is article focuses on ‘crowdfunding,’ a  nancial innovation that

has the potential to revolutionize the way in which entrepreneurial individuals

source capital for their endeavors ( Hui et al ., 2014 ; Shiller, 2013 ). Strictly speak-

ing, crowdfunding (CF) is not a recent invention as it has been used throughout

history, but the emergence of the Internet, and Web 2.0 in particular, only recently

exposed the general public to CF and allowed them to easily access this approach

to raising capital, be it as providers (crowdfunders) or recipients (fund-seekers)

of capital.

Simultaneous with this recent shift into the public eye, CF also became inter-

esting to scholarly researchers, with a surge of research e orts being put into

exploring this emerging  eld. However, due to the newness of this topic, CF as

an academic  eld of study is still very developmental, currently consisting of only

a small, albeit growing, base of published scholarly research ( Macht and Weath-

erston, 2014 ). Valanciene and Jegeleviciute ( 2013 ) stated explicitly that there are

three main actors in CF:

1. the fund-seeking entrepreneurs, who attempt to raise capital for certain pro-

jects (for instance, production of artistic work, social projects, or business

ventures);

2. the crowdfunders, members of the general public, who each invest small

amounts of their own money into entrepreneurial projects; and

From a crowdfunder ’ s point of

view, the crowdfunding process

consists of two phases: pre-

investment and post-investment.

Academic knowledge relating to a

crowdfunder ’ s pre-investment

phase refers mainly to the

funder ’ s motivations to pledge,

their due diligence, and their

decision to back certain projects

but not others.

The very limited knowledge

relating to the crowdfunder ’ s

post-investment phase points

toward the potential for

crowdfunders to provide added

value to fund-seekers in addition

to their  nancial pledge.

1 JEL classi cation codes: G23; G24; G29.

The majority of published work refers to the pre-investment phase of the

crowdfunding process, with only very little academic knowledge currently relating

to the post-investment phase.