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Crowdfunding Platforms: Ecosystem and Evolution

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  • Tan, Yee Heng
  • Reddy, Srinivas K.

Abstract

Crowdfunding is the practice of seeking support from a large number of backers, each funding a small amount, in order to reach a specific funding goal. This monograph examines: (1) the field of crowdfunding, (2) how it has evolved, (3) the impact crowdfunding has on the fields of innovation, marketing and finance and (4) the factors that can affect crowdfunding outcomes. We view crowdfunding as complementary and transformative, increasing the efficiency of several existing processes such as idea generation and testing, fund raising and collection. We combine practitioner perspectives and research findings to provide insights on this subject. We explore the crowdfunding ecosystem and the role that project creators, backers and the platform play in the entire crowdfunding process. We provide a comprehensive review of current academic research in crowdfunding that focus on three key components of the crowdfunding process: (1) project design and description, (2) project creator and backer characteristics and (3) platform design and architecture, and explore how different properties of these crowdfunding components impact the crowdfunding process and affect crowdfunding outcomes. We further provide an overview of new developments in crowdfunding (such as new crowdfunding models) and suggest trends (such as privacy issues) that may shape the crowdfunding ecosystem in the future.

Suggested Citation

  • Tan, Yee Heng & Reddy, Srinivas K., 2020. "Crowdfunding Platforms: Ecosystem and Evolution," Foundations and Trends(R) in Marketing, now publishers, vol. 14(2), pages 53-172, July.
    • Handle: RePEc:now:fntmkt:1700000061
    DOI: 10.1561/1700000061
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    References listed on IDEAS

    as
    1. Zaggl, Michael A. & Block, Joern, 2019. "Do small funding amounts lead to reverse herding? A field experiment in reward-based crowdfunding," Journal of Business Venturing Insights, Elsevier, vol. 12(C).
    2. Juanjuan Zhang & Peng Liu, 2012. "Rational Herding in Microloan Markets," Management Science, INFORMS, vol. 58(5), pages 892-912, May.
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    More about this item

    Keywords

    Behavioral Decision Making; New business financing; Information Systems and Groups: Crowdsourcing;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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