Exceeding Expectations: Exploring the Challenges of Overfunding on Crowdfunding Platforms

Abstract

This master’s thesis explores the contemporary phenomenon of overfunding, an act of receiving more money than it is needed, in the context of crowdfunding. The term ‘overfunding’ is originated in financial business and is used when a crowdfunding project receives more funds than its initial funding goal, which, by scholars, has been directly associated with delays in delivery of the funded products. However, at present, there is still and evident gap in the academic research within this field. Thereby, as a contribution to the literature, this thesis presents a qualitative study on how overfunding is experienced by project founders. With a focus on the reward-based crowdfunding model, the study has collected primary data from in-depth interviews conducted with a group of international founders, who are familiarized with the phenomenon as an outcome of their experiences on Kickstarter.com and Indiegogo.com. With an abductive approach and a thematic analysis, data has been examined and interpreted in order to record various patterns. The themes across data have been organized and presented in a new model, that can be used as a representation of the most common phases that projects founders reported to go through in their relation with overfunding. The stages include the project’s preparation, the platform selection, the marketing plans, the communication with backers, adopting an entrepreneurial thinking, overcoming challenges, assuming risks and delivering the results. The study validates prior researchers’ findings that overfunding is problematic due to the various unforeseen events that appear on the sides. However, the thesis’ results also suggest a series of solutions recommended for the future founders and entrepreneurs interested in successfully overcoming overfunding implications. Hence, an extensive preparation, well prepared marketing strategies along with a strong entrepreneurship skillset are suggested for founders to become successful entrepreneurs after an overfunding experience.