Entrepreneurial Crowdfunding without Private Claims

Kevin J. Boudreau, Lars Bo Jeppesen, Toke Reichstein, Francesco Rullani

    Research output: Working paperResearch


    Today's crowdfunding raises funds for tiny, private entrepreneurial ventures without granting funders private claims to a project's future value. Rather than “investments,” these are “contributions.” This paper argues that for such crowdfunding neither producer nor consumer surplus – i.e., project quality, in traditional terms – will play a role in determining funding. Private gifts to funders create typically weak incentives to contribute. Specific kinds of non-pecuniary motivations provide main incentives to contribute. We confirm predictions in time-series observational data set on gross contributions, communications and announcements, new version releases and policy changes, and product use from a representative project.
    Original languageEnglish
    PublisherSSRN: Social Science Research Network
    Number of pages41
    Publication statusPublished - 23 Aug 2017
    SeriesHarvard Business School Strategy Unit Working Paper


    • Online platforms
    • Crowdfunding
    • Entrepreneurial finance
    • New ventures
    • Public goods

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