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Crowdfunding of SMEs and Startups: When Open Investing Follows Open Innovation

In: RESEARCHING OPEN INNOVATION IN SMEs

Author

Listed:
  • Giancarlo Giudici
  • Cristina Rossi-Lamastra

Abstract

Crowdfunding is currently booming, and it appears as a valuable alternative to finance startups and SMEs. In this chapter, we advise scholars to study the relationship between crowdfunding and open innovation. On the one hand, under this new way of financing, firms receive money as well as feedbacks and suggestions from crowdfunding investors who pledge money on the Internet. On the other hand, earlier open innovation activities and social networking allow SMEs to reduce information asymmetries and exploit the market of potential funders. Then, we take stock of contributions on the prominence of social capital in crowdfunding to discuss the linkages among crowdfunding, social capital, and open innovation. To this end, we define the concept of social capital and review the contributions, which study it in the crowdfunding realm. Finally, we describe three interesting cases of SMEs from the Crowdcube platform (goHenry, JustPark, Monzo), showing how these SMEs leveraged their social relations with extant customers and innovative users to raise equity capital.

Suggested Citation

  • Giancarlo Giudici & Cristina Rossi-Lamastra, 2018. "Crowdfunding of SMEs and Startups: When Open Investing Follows Open Innovation," World Scientific Book Chapters, in: Wim Vanhaverbeke & Federico Frattini & Nadine Roijakkers & Muhammad Usman (ed.), RESEARCHING OPEN INNOVATION IN SMEs, chapter 12, pages 377-396, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789813230972_0012
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    Citations

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    Cited by:

    1. Adhami, Saman & Giudici, Giancarlo & Martinazzi, Stefano, 2018. "Why do businesses go crypto? An empirical analysis of initial coin offerings," Journal of Economics and Business, Elsevier, vol. 100(C), pages 64-75.
    2. Paolo Carriere, 2019. "The Italian Regulatory Approach to Crypto-Assets and the Utility Tokens’ ICOs," BAFFI CAREFIN Working Papers 19113, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    3. Crosetto, Paolo & Regner, Tobias, 2018. "It's never too late: Funding dynamics and self pledges in reward-based crowdfunding," Research Policy, Elsevier, vol. 47(8), pages 1463-1477.
    4. Radziwon, Agnieszka & Bogers, Marcel, 2019. "Open innovation in SMEs: Exploring inter-organizational relationships in an ecosystem," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 573-587.
    5. Renato Passaro & Ivana Quinto & Pierluigi Rippa & Antonio Thomas, 2020. "Evolution of Collaborative Networks Supporting Startup Sustainability: Evidences from Digital Firms," Sustainability, MDPI, vol. 12(22), pages 1-20, November.
    6. Ciro Troise & Enrico Battisti & Michael Christofi & Nina Jorien Vulpen & Shlomo Tarba, 2023. "How Can SMEs Use Crowdfunding Platforms to Internationalize? The Role of Equity and Reward Crowdfunding," Management International Review, Springer, vol. 63(1), pages 117-159, February.
    7. Domingo, Ribeiro-Soriano & Piñeiro-Chousa, Juan & Ángeles López-Cabarcos, M., 2020. "What factors drive returns on initial coin offerings?," Technological Forecasting and Social Change, Elsevier, vol. 153(C).

    More about this item

    Keywords

    Open Innovation; SME; Entrepreneur; Innovation Ecosystem; Licensing; Ip; Collaboration; Market Partner; Partnerships; Innovation Management; Business Model;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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