Investors in environmental ventures want good money—and a clean conscience: How framing, interest rates, and the environmental impact of crowdlending projects influence funding decisions

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@article{af324245d1f44bb0a896024b5661dc80,
title = "Investors in environmental ventures want good money—and a clean conscience: How framing, interest rates, and the environmental impact of crowdlending projects influence funding decisions",
abstract = "Crowdfunding is becoming the most important source for financing new ventures. In particular, it is often used to finance environmentally oriented ventures. Still, it is largely unknown what specifically makes an environmentally oriented crowdfunding project attractive to investors and how entrepreneurs can frame their projects in a way that fosters its attractiveness to these investors. To study how different factors influence the decisions of potential investors and informed by warm glow theory, we conducted a real-choice experiment using choice-based conjoint analysis among a purposefully drawn sample of potential investors (n = 569). The results inform practitioners that with regard to framing, altruistic cues are more effective than egoistic cues, whereas with regard to the actual benefits investors receive, egoistic benefits (i.e., interest payments) are more important than altruistic benefits (i.e., environmental impact). Moreover, we found that different groups of investors exist that seek different benefits. We labeled these groups “profit-maximizers,” “receptive altruists,” and “risk-seekers aiming for the best of both worlds.”",
keywords = "Sustainability sciences, Management & Economics, Crowdfunding, Environmental entrepreneurship, Warm glow theory, Framing, Conjoint analysis, Crowdfunding, environmental entrepreneurship, Warm glow theory, Framing, Conjoint analysis",
author = "Frederic Penz and Jacob H{\"o}risch and Isabell Tenner",
note = "Publisher Copyright: {\textcopyright} 2022 Elsevier Inc.",
year = "2022",
month = sep,
day = "1",
doi = "10.1016/j.techfore.2022.121849",
language = "English",
volume = "182",
journal = "Technological Forecasting and Social Change",
issn = "0040-1625",
publisher = "Elsevier B.V.",

}

RIS

TY - JOUR

T1 - Investors in environmental ventures want good money—and a clean conscience

T2 - How framing, interest rates, and the environmental impact of crowdlending projects influence funding decisions

AU - Penz, Frederic

AU - Hörisch, Jacob

AU - Tenner, Isabell

N1 - Publisher Copyright: © 2022 Elsevier Inc.

PY - 2022/9/1

Y1 - 2022/9/1

N2 - Crowdfunding is becoming the most important source for financing new ventures. In particular, it is often used to finance environmentally oriented ventures. Still, it is largely unknown what specifically makes an environmentally oriented crowdfunding project attractive to investors and how entrepreneurs can frame their projects in a way that fosters its attractiveness to these investors. To study how different factors influence the decisions of potential investors and informed by warm glow theory, we conducted a real-choice experiment using choice-based conjoint analysis among a purposefully drawn sample of potential investors (n = 569). The results inform practitioners that with regard to framing, altruistic cues are more effective than egoistic cues, whereas with regard to the actual benefits investors receive, egoistic benefits (i.e., interest payments) are more important than altruistic benefits (i.e., environmental impact). Moreover, we found that different groups of investors exist that seek different benefits. We labeled these groups “profit-maximizers,” “receptive altruists,” and “risk-seekers aiming for the best of both worlds.”

AB - Crowdfunding is becoming the most important source for financing new ventures. In particular, it is often used to finance environmentally oriented ventures. Still, it is largely unknown what specifically makes an environmentally oriented crowdfunding project attractive to investors and how entrepreneurs can frame their projects in a way that fosters its attractiveness to these investors. To study how different factors influence the decisions of potential investors and informed by warm glow theory, we conducted a real-choice experiment using choice-based conjoint analysis among a purposefully drawn sample of potential investors (n = 569). The results inform practitioners that with regard to framing, altruistic cues are more effective than egoistic cues, whereas with regard to the actual benefits investors receive, egoistic benefits (i.e., interest payments) are more important than altruistic benefits (i.e., environmental impact). Moreover, we found that different groups of investors exist that seek different benefits. We labeled these groups “profit-maximizers,” “receptive altruists,” and “risk-seekers aiming for the best of both worlds.”

KW - Sustainability sciences, Management & Economics

KW - Crowdfunding

KW - Environmental entrepreneurship

KW - Warm glow theory

KW - Framing

KW - Conjoint analysis

KW - Crowdfunding

KW - environmental entrepreneurship

KW - Warm glow theory

KW - Framing

KW - Conjoint analysis

UR - http://www.scopus.com/inward/record.url?scp=85133687647&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/19c71123-7b62-3295-a055-ae5732eae063/

U2 - 10.1016/j.techfore.2022.121849

DO - 10.1016/j.techfore.2022.121849

M3 - Journal articles

VL - 182

JO - Technological Forecasting and Social Change

JF - Technological Forecasting and Social Change

SN - 0040-1625

M1 - 121849

ER -