Not just an ego-trip: Exploring backers’ motivation for funding in incentive-based crowdfunding

• Published in: The journal of strategic information systems 2017-12, Vol.26 (4), p.246-260
• Main Authors: Bretschneider, Ulrich, Leimeister, Jan Marco
• Format: Article
• Language: English
• Subjects: Altruism; Crowdfunding; Crowdfunding systems; Funding; Herding; Incentive-based crowdfunding; Incentives; Liking; Lobbying; Motivation; Prosocial motives; Recognition; Reward; Self interest; Self-interest motives; Social comparison
• ISSN: 0963-8687; 1873-1198
• DOI: 10.1016/j.jsis.2017.02.002

•Backers in crowdfunding are not only motivated to fund in prospect of a reward.•Backers are also motivated because they want to lobby that projects becomes real.•They also fund in expectation of recognition from others in return for investment.•Backers are also concerned about their image and fund to develop this image.•Backers also give because they developed feelings of liking for ventures. Incentive-based forms of crowdfunding – such as reward-, equity- and lending-based crowdfunding – are becoming increasingly popular. However, research that studies backers’ motivations for funding in these environments is still in an embryonic state, revealing an inconsistent and narrow picture. The few existing studies are largely guided by the idea that backers are mainly egoistically motivated and do not have prosocial motives. We developed a research model that describes backers’ motivation and conducted an empirical study to examine this model. Results indicate that backers indeed have several self-interest motivations for funding: prospect of a reward; expectation of recognition from others; to lobby a certain project in the hopes of its fruition; and to develop their image. However, some backers are also prosocially motivated in that they develop feelings of liking for a certain venture and/or project team. Furthermore, we found evidence that herding has a significant moderating effect on backers’ reward motivation. Strategic IS researchers as well as crowdfunding practitioners can draw on our findings to systematically design, implement, and evaluate potential incentive systems that respond to reward-, recognition-, lobbying-, image- and liking-motives and thereby attract the crowd more effectively to invest in ventures presented on incentive-based crowdfunding systems.