The potential of crowdfunding for sustainable development: a comparison of sustainable and conventional crowdfunding projects

Publikation: Beiträge in ZeitschriftenZeitschriftenaufsätzeForschungbegutachtet


Crowdfunding bears great potential for sustainable entrepreneurs, who often face difficulties in receiving loans from traditional financing mechanisms. Because such ventures are able to tackle pressing environmental and social issues, they are of interest to researchers, and recent studies have already identified factors that increase their crowdfunding success. However, it remains unstudied as to what potential sustainable crowdfunding holds in contributing towards sustainable development and to what extent crowdfunding projects that are environmentally, socially, sustainability- and conventionally oriented actually differ. Based on a quantitative dataset, 282 investment-based crowdfunding projects were characterised along the entrepreneurship typology suggested by Thompson and colleagues. The results revealed that the marketing function of crowdfunding was prevalent for environmentally oriented crowdfunding projects. Socially oriented crowdfunding projects were identified as small scale compared to other project types, since they aimed for lower funding targets. Finally, conventionally oriented crowdfunding projects mainly used crowdfunding to finance service and organisational innovations. Based on these insights, implications for research and practice are drawn.
ZeitschriftInternational Journal of Entrepreneurial Venturing
Seiten (von - bis)508-527
Anzahl der Seiten20
PublikationsstatusErschienen - 11.2021

Bibliographische Notiz

Funding Information:
Crowdfunding is an effective tool for financing innovations of (sustainable) entrepreneurial ventures (Hervé and Schwienbacher, 2018; Testa et al., 2019). It can even be regarded as a success factor for crowdfunding initiators, since past literature has identified that project initiators who moderately promoted their project based on its innovativeness positively influenced its crowdfunding success (Lins et al., 2018). The Organisation for Economic Co-operation and Development (OECD) defines innovation as “the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations” (OECD, 2005, p.46). Different types of innovations can play different roles in fostering sustainable development (e.g., Hansen and Schaltegger, 2016; Hörisch, 2013; Cillo et al., 2019). This calls for investigating which innovation types (i.e., product, service or organisational innovations) are financed via sustainability-related and conventional crowdfunding. According to Agrawal et al. (2013), projects offering product innovations will receive a higher benefit from crowdfunding, since attributes and performance promises of the respective product can be easily communicated in project descriptions and videos. For sustainability-oriented crowdfunding initiators, Messeni Petruzzelli et al. (2019) recommend offering tangible outcomes in order to enhance funding success. However, Wehnert et al. (2019) stress that the crowdfunding success of sustainable product features strongly depends upon how complex the product is; in other words, products characterised by low complexity (such as cacao) enjoy a higher trust level in their sustainable features among supporters. In particular, as emphasised by Mollick and Robb (2016), reward-based crowdfunding platforms are useful to finance product innovations due to the opportunity to pre-sell the respective product as a return for financial support. For this reason, some researchers also use the term ‘product-based crowdfunding’ when referring to reward-based crowdfunding (e.g., Roma et al., 2017). In summary, an assumption can be made that product innovations are the most frequently financed on crowdfunding platforms. Therefore, the dominance of product innovations is also expected on investment-based crowdfunding platforms. The fourth hypothesis is formulated as follows:

Funding Information:
Crowdfunding is considered a successful tool for financing environmentally, socially and sustainability-oriented projects, which often face difficulties in receiving financial support from standard financial intermediaries. It is often suggested by researchers that such projects provide great potential to address environmental and social issues and thus facilitate sustainable development (Calic and Mosakowski, 2016; Hörisch, 2018; Vismara, 2019). This study is an initial examination that sheds light on the potential that sustainable crowdfunding holds in contributing towards sustainable development.

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