Study
Innovation & DesignHigh ImpactModerate effect

Crowdfunding Models Offer Diverse Pathways for Project Funding and Stakeholder Engagement

Understanding the distinct motivations and operational models of various crowdfunding platforms is crucial for effectively connecting innovators with capital and support.

Communications of the Association for Information Systems · 2015

01

Key Findings

  • 01Crowdfunding involves distinct stakeholder groups with unique perspectives.
  • 02Six primary business models exist within the crowdfunding landscape.
  • 03A conceptual framework can map the crowdfunding phenomenon and guide future research.
02

Application

Design takeaway

When seeking funding, carefully consider which crowdfunding model (e.g., rewards-based for early-stage products, equity-based for scalable ventures) aligns best with your project's objectives and target audience.

How to apply

When planning a new product or venture, research the different crowdfunding platforms and their associated business models to determine the most suitable avenue for securing capital and building a community of early adopters.

Project actions

  • 01When proposing a new product, consider how crowdfunding could be a viable funding source.
  • 02Research the different types of crowdfunding platforms (e.g., Kickstarter, Indiegogo, Seedrs) and their success rates for similar projects.
03

Method & Evidence

AimTo develop a conceptual framework for understanding the crowdfunding ecosystem by classifying its business models and identifying stakeholder viewpoints.
MethodLiterature review and conceptual framework development.
ProcedureThe authors reviewed existing literature on crowdfunding, analyzed stakeholder roles (founders, backers, technology providers), and identified six distinct crowdfunding business models (private equity, royalty, microfinance, peer-to-peer lending, rewards, donation) to propose a comprehensive conceptual framework.
ContextFinancial technology and innovation funding.

Variables

IV["Crowdfunding business model","Stakeholder viewpoint"]
DV["Crowdfunding success (e.g., funding amount, campaign completion rate)","Stakeholder engagement"]
CV["Project type","Industry sector","Geographic location of campaign"]
04

Strengths & Limitations

Strengths

  • +Provides a structured overview of a complex phenomenon.
  • +Identifies key stakeholder roles and motivations.

Limitations

The study is based on existing literature and may not capture the latest trends or emerging crowdfunding platforms.

Reliability & validity

The reliability of the identified models could be assessed by applying the framework to a large sample of crowdfunding campaigns and checking for consistent categorization. Validity could be enhanced by interviewing founders and backers about their experiences within these models.

Think critically

How might the evolution of blockchain technology and decentralized finance impact the traditional crowdfunding business models identified in this framework?

05

Design Principles

"Tailor your funding strategy to the specific mechanics and stakeholder expectations of the chosen crowdfunding model."

For designers and innovators, recognizing the nuances between different crowdfunding types (e.g., reward-based vs. equity-based) can significantly impact project strategy, marketing, and the type of engagement sought from backers. This knowledge allows for more targeted outreach and a better alignment of project goals with funder expectations.

06

What This Means for Your Design

There are different ways to ask people for money online to fund your ideas, and each way works a bit differently for the person asking and the person giving money.

How to use in your project

  • 1.Reference this research when discussing potential funding strategies for a new product or service, particularly if crowdfunding is being considered.
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Add to My Project

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Quick Cite

(2015). A Conceptual Framework for Understanding Crowdfunding. Communications of the Association for Information Systems. https://doi.org/10.17705/1cais.03701 Retrieved from https://designdex.org/study/6a7e7152-9d38-4274-b8cd-623db400a716/crowdfunding-models-offer-diverse-pathways-for-project-funding-and-stakeholder-engagement

Paragraph starter

This research provides a valuable framework for understanding the diverse landscape of crowdfunding, identifying six distinct business models (private equity, royalty, microfinance, peer-to-peer lending, rewards, and donation) and the viewpoints of key stakeholders. This understanding is crucial for innovators seeking funding, as it allows for a strategic selection of platforms that best align with project objectives and target funder demographics, thereby increasing the likelihood of successful capital acquisition and community engagement.

09

Source

Communications of the Association for Information Systems

A Conceptual Framework for Understanding Crowdfunding

journal · 2015

View source

Questions about this research

What does the research say about crowdfunding models offer diverse pathways for project funding and stakeholder engagement?
When seeking funding, carefully consider which crowdfunding model (e.g., rewards-based for early-stage products, equity-based for scalable ventures) aligns best with your project's objectives and target audience. Evidence: Communications of the Association for Information Systems (2015).
Why does "Crowdfunding Models Offer Diverse Pathways for Project Funding and Stakeholder Engagement" matter for design?
For designers and innovators, recognizing the nuances between different crowdfunding types (e.g., reward-based vs. equity-based) can significantly impact project strategy, marketing, and the type of engagement sought from backers. This knowledge allows for more targeted outreach and a better alignment of project goals with funder expectations.
How can designers apply this research?
When seeking funding, carefully consider which crowdfunding model (e.g., rewards-based for early-stage products, equity-based for scalable ventures) aligns best with your project's objectives and target audience.
What were the main findings?
Crowdfunding involves distinct stakeholder groups with unique perspectives.. Six primary business models exist within the crowdfunding landscape.. A conceptual framework can map the crowdfunding phenomenon and guide future research.
What research method was used?
Literature review and conceptual framework development..
How strong is the evidence?
Evidence strength is rated Moderate effect, based on a 2015 journal from Communications of the Association for Information Systems.
What should I do differently in my next project?
When planning a new product or venture, research the different crowdfunding platforms and their associated business models to determine the most suitable avenue for securing capital and building a community of early adopters.
What are the limitations?
The framework is conceptual and requires empirical validation across diverse crowdfunding campaigns and markets.
Is there evidence that crowdfunding affects design outcomes?
The research identifies six distinct ways crowdfunding operates, each catering to different needs of project creators and funders, and proposes a framework to understand these interactions. For designers and innovators, recognizing the nuances between different crowdfunding types (e.g., reward-based vs. equity-based) c Source: Communications of the Association for Information Systems (2015).
Where does this project research apply?
Financial technology and innovation funding. It sits within innovation & design research on designdex.org.

Related research topics

crowdfunding design research · evidence on crowdfunding · does crowdfunding improve design outcomes · project studies for designers · crowdfunding and project findings · innovation & design research evidence