Stretching the success in reward-based crowdfunding

• Published in: Journal of business research Vol. 152; pp. 205 - 220
• Main Authors: Yasar, Burze, Sevilay Yılmaz, Işıl, Hatipoğlu, Nurullah, Salih, Aslıhan
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01-11-2022
• Subjects: Entrepreneurial finance; Funding success; Goal-setting; Kickstarter; Reward-based crowdfunding; Stretch goals; Sustainable development goals; Stretch goals; Goal-setting; Entrepreneurial finance; Kickstarter; Reward-based crowdfunding; Sustainable development goals; Funding success
• ISSN: 0148-2963; 1873-7978
• DOI: 10.1016/j.jbusres.2022.07.053

•We empirically investigate the effects of initially-set stretch goals and communication openness on crowdfunding performance.•Projects with initially-set stretch goals have higher funding success than projects without stretch goals.•Higher levels of communication openness lead to higher project success.•Stretch goals have a positive effect on projects' funding performance if the creator communicates openly with the backers.•Aggressive stretch goals positively affect projects' funding success if communicated well.
The use of crowdfunding as a funding method has increased considerably over the last decade. However, competition for crowdfunding money is tough, and goal setting is critical for fund seekers. We investigate the impact of initially set stretch goals and the project creators' communication openness on project funding performance. Empirical results based on a large dataset from Kickstarter show that the stretch goals and higher levels of communication openness increase the likelihood of project funding success. Furthermore, communication openness positively moderates the relation between stretch goals and funding success. Moreover, projects with aggressive stretch goals are more likely to succeed if the goals are communicated well. The results provide practical implications for project creators to increase funding performance by communicating openly with the crowd.