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Gordon Burtch<br />AnindyaGhose<br />Sunil Wattal<br />Analyzing Contribution Behavior in Crowdfunded Markets<br />October...
A Crowdfunding Example<br />Investors Get:<br />Money<br />The Idea: Revolights<br />Altruism (Warm Glow)<br />Raised: $21...
Why is This Important? Crowdfunding is Going Mainstream<br />Obama’s American Jobs Act Specifically Refers to Crowdfunding...
Examples of Crowdfunding Markets<br />
Crowdfunded Online Journalism<br />Private contribution toward a public good (Hamilton, 2003; Kaye and Quinn, 2010; Aitamu...
Conceptual Model(s)<br />Antecedents (Arellano-Bond GMM)<br />Consequences (Negative Binomial)<br />Prior Contribution Fre...
Findings<br />Antecedents Model<br />Substitutive effect: people de-allocate funds from a project as others contribute mor...
Conclusion<br />Crowdfunded Markets are About to Boom<br />New source of capital for entrepreneurs<br />Regulation and Des...
Questions?<br />Or Comments?<br />
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An Empirical Examination of the Antecedents and Consequences of Investment Patterns in Crowdfunding Markets

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A copy of the presentation slides from my recent presentation at the Fox School of Business, about my research on crowdfunding.

Published in: Business, Economy & Finance
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An Empirical Examination of the Antecedents and Consequences of Investment Patterns in Crowdfunding Markets

  1. 1. Gordon Burtch<br />AnindyaGhose<br />Sunil Wattal<br />Analyzing Contribution Behavior in Crowdfunded Markets<br />October 7th, 2011<br />
  2. 2. A Crowdfunding Example<br />Investors Get:<br />Money<br />The Idea: Revolights<br />Altruism (Warm Glow)<br />Raised: $215,621<br />From: 1,442 People <br />Budget: $43,500<br />Social Image<br />
  3. 3. Why is This Important? Crowdfunding is Going Mainstream<br />Obama’s American Jobs Act Specifically Refers to Crowdfunding<br />Entrepreneur Access to Capital Act (H.R. 2930) Under Review NOW<br />Seeks to establish exceptions to SEC regulations for crowd-funded sale of equity stakes<br />Policy, marketplace design will become increasingly important<br />Inform Design by Understanding Contribution Behavior in Crowdfunded Markets<br />What determines individuals’ contribution decisions in these markets (Antecedents)?<br />What are the consequences of those decisions (Consequences)?<br />
  4. 4. Examples of Crowdfunding Markets<br />
  5. 5. Crowdfunded Online Journalism<br />Private contribution toward a public good (Hamilton, 2003; Kaye and Quinn, 2010; Aitamurto, 2011)<br />Two Types of Models for Private Contribution to a Public Good That Incorporate Observation of Others<br />Substitution models and reinforcement models<br />Mixed empirical evidence in the literature<br />Data (Spans 2009-2011)<br />Web traffic statistics (proprietary data)<br />Daily contributions to all projects<br />Project details (budget, description, deliverables, etc.)<br />
  6. 6. Conceptual Model(s)<br />Antecedents (Arellano-Bond GMM)<br />Consequences (Negative Binomial)<br />Prior Contribution Frequency &<br />Intensity<br />Common<br />Sentiment<br />Social<br />Influence<br />Contribution<br />Decision<br />Readership<br />
  7. 7. Findings<br />Antecedents Model<br />Substitutive effect: people de-allocate funds from a project as others contribute more, faster<br />How to mitigate this? Seeding projects, subsidizing contribution?<br />Consequences Model<br />Faster funding spread across more contributors is associated with lower story readership<br />Predictive capacity of these indicators? Use contribution patterns to inform sales forecasting, inventory management.<br />
  8. 8. Conclusion<br />Crowdfunded Markets are About to Boom<br />New source of capital for entrepreneurs<br />Regulation and Design<br />Must take into account huge potential for social influence – in our case, to overcome/address the substitutive effect<br />Consider potential ancillary benefits (forecasting project performance)<br />
  9. 9. Questions?<br />Or Comments?<br />

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