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(No) Time for Change: When and Why Entrepreneurs Act During Underperforming Fundraising Attempts

Author

Listed:
  • Hendrik Wilhelm

    (Faculty of Management, Economics and Society, Witten/Herdecke University, 58455 Witten, Germany)

  • Norbert Steigenberger

    (Umeå School of Business, Economics and Statistics, Umeå University, 901 87 Umeå, Sweden; Media, Management, and Transformation Center, Jönköping International Business School, 55111 Jönköping, Sweden)

  • Clarissa E. Weber

    (Faculty of Business and Economics, University of Göttingen, 37073 Göttingen, Germany)

  • Jouni K. Juntunen

    (School of Technology and Innovations, and Innovation and Entrepreneurship InnoLab, University of Vaasa, 65200 Vaasa, Finland)

  • Mark Ebers

    (Faculty of Management, Economics and Social Sciences, University of Cologne, 50672 Cologne, Germany)

Abstract

Entrepreneurs need to mobilize funds, but they do so under considerable uncertainty about resource holders’ preferences, leading often to fundraising attempts that perform below entrepreneurs’ aspirations. Past research has offered contrasting theorizing and evidence for why entrepreneurs then make changes to their product offering during such attempts as well as for why entrepreneurs refrain from taking such action. This paper develops and tests behavioral theory to reconcile this tension, explicating when and why entrepreneurs change their product offering during underperforming fundraising attempts. Specifically, we argue that entrepreneurs draw on three sources of information that are inherent to fundraising attempts and that inform the extent of their actions to change their product offering: the degree to which they perform below their own fundraising aspirations, the degree to which they fall below peer fundraising performance, and the time that remains until the deadline for the fundraising attempt. Longitudinal data on 576 fundraising campaigns (6,758 observations) published on the crowdfunding platform Kickstarter support our theory. By developing novel behavioral theory on when and why entrepreneurs take action during resource mobilization, we offer contributions to research on entrepreneurial resource mobilization, the crowdfunding literature, and the Behavioral Theory of the Firm.

Suggested Citation

  • Hendrik Wilhelm & Norbert Steigenberger & Clarissa E. Weber & Jouni K. Juntunen & Mark Ebers, 2024. "(No) Time for Change: When and Why Entrepreneurs Act During Underperforming Fundraising Attempts," Organization Science, INFORMS, vol. 35(4), pages 1299-1321, July.
    • Handle: RePEc:inm:ororsc:v:35:y:2024:i:4:p:1299-1321
    DOI: 10.1287/orsc.2020.13803
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