Crowdfunding Success Factors: Financial Information and Advertising Finance
Abstract
This study aimed to determine whether financial information, business location, funding objectives and advertising content as intervening variables can help the success of funding through 10 crowdfunding platforms registered with OJK. This study used signalling theory in discussing equity crowdfunding platforms, which can be assumed by small investors as a signal of business quality and can convince investors to invest, thus reducing the problem of information asymmetry. The research method used in this study was descriptive quantitative with the analytical model used to test the hypothesis was the logistic regression analysis model. The population of this study consisted of companies seeking funding through crowdfunding platforms registered with OJK Indonesia. The research was conducted in 2023. The data used in this study was secondary data obtained from published crowdfunding platform data. A purposive sampling technique was used to determine the research sample. The results of this study are expected to provide information to funding project owners and investors to be used as a guide in making decisions.
Keywords: financial information, business location, funding purpose, advertising finance, and funding success
References
[1] Alam M, Paull M, Peachey A, Holloway D, Griffiths J. Funding Sources And Performance Management Systems: An Empirical Study. J Account Organ Chang. 2021;17(2):242–62.
[2] Khajar I, Santoso B. External Funding Implications On Smes Performance (A Conceptual Model) Bt. In: Complex, Intelligent and Software Intensive Systems. Springer Int Publ. 2021.
[3] Almeida H, Wolfenzon D. Should Business Groups Be Dismantled? The Equilibrium Costs Of Efficient Internal Capital Markets. J Financ Econ. 2006;79(1):99–144.
[4] Zarrouk H, Sherif M, Galloway L, Ghak TE. Entrepreneurial Orientation, Access To Financial Resources And Smes’ Business Performance: The Case Of The United Arab Emirates. J Asian Financ Econ Bus. 2020;7(12):465–74.
[5] Usman SM, Bukhari FA, You H, Badulescu D, Gavrilut D. The Effect And Impact Of Signals On Investing Decisions In Reward-Based Crowdfunding: A Comparative Study Of China And The United Kingdom. J Risk Financ Manag. 2020;13(12):325.
[6] Ahlstrom D, Cumming DJ, Vismara S. New Methods Of Entrepreneurial Firm Financing: Fintech, Crowdfunding And Corporate Governance Implications. Corp Gov. 2018;26(5):310–3.
[7] Burtch G, Ghose A, Wattal S. An Empirical Examination Of The Antecedents And Consequences Of Contribution Patterns In Crowd-Funded Markets. Inf Syst Res. 2013;24(3):499–519.
[8] Yasar B. The New Investment Landscape: equity Crowdfunding. Cent Bank Rev. 2021;21(1):1–16.
[9] Koch JA, Siering M. The Recipe Of Successful Crowdfunding Campaigns. Electron Mark. 2019;29(4):661–79.
[10] Mollick E. The Dynamics Of Crowdfunding: An Exploratory Study. J Bus Venturing. 2014;29(1):1–16.
[11] Bradford CS. The New Federal Crowdfunding Exemption: promise Unfullfilled. Forthcoming. Secur Regul Law J. 2012;40:1–58.
[12] Xu H, Wu Y, Hamari J. Corrigendum To “What Determines The Successfulness Of A Crowdsourcing Campaign: A Study On The Relationships Between Indicators Of Trustworthiness, Popularity, And Success” ( Journal Of Business Research (2022) 139 (484–495). J Bus Res. 2022;140:693–4.
[13] Miglo A. Crowdfunding Under Market Feedback, Asymmetric Information And Overconfident Entrepreneur. Entrep Res J. 2021;11(4):1–19.
[14] Ordanini A, Miceli L, Pizzetti M, Parasuraman A. Crowd-funding: Transforming Customers Into Investors Through Innovative Service Platforms. J Serv Manag. 2011;22(4):443–70.
[15] Kiva.Org. Kiva - About Us. [cited 2016 Apr 21]. Available from: https://www.kiva.org/About.
[16] Hulme M, Wright C. Internet Based Social Lending: Past, Present And Future. Social Futures Observatory; 2006. pp. 1–107.
[17] Ma S, Dh H, Toward A. Better Understanding Of Crowdfunding, Openness And The Consequences For Innovation. Res Policy. 2017;46(4):784–98.
[18] Ziegler T, Shneor R, Wenzlaff K, Odorović A, Hao R, Ryll L. The 4th European Alternative Finance Benchmarking Report. Ssrn Electron J. 2021. https://doi.org/10.2139/Ssrn.3772260.
[19] Massolution. 2015cf Crowdfunding Industry Report. [cited 19 Dec]. Http://Crowdexpert.Com/Crowdfunding-Industry-Statistics/
[20] Kang L, Jiang Q, Tan C. Remarkable Advocates: An Investigation Of Geographic Distance And Social Capital For Crowdfunding. Inf Manage. 2017;54(3):336–48.
[21] Aprilia L, Ss W. The Impact Of Social Capital On Crowdfunding Performance. South East Asian J Manag. 2017;11(1): ; Epub Ahead Of Print. https://doi.org/10.21002/seam.v11i1.7737.
[22] Ahlers GK, Cumming D, Günther C, Schweizer D. Signaling In Equity Crowdfunding. Entrep Theory Pract. 2015;39(4):955–80.
[23] Spence M. Job Market Signaling. Q J Econ [Internet]. 1973;87(3):355. Available from: http://www.jstor.org/stable/1882010
[24] Gulati R, Higgins M. Which Ties Matter When? The Contingent Effects Of Interorganizational Partnerships On Ipo Success. Strateg Manage J. 2003;24(2):127– 44.
[25] Hervé F, Manthé E, Sannajust A, Schwienbacher A. Determinants Of Individual Investment Decisions In Investment-Based Crowdfunding. J Bus Finance Account. 2019;46(5-6):762–83.
[26] Frydrych D, Bock AJ, Kinder T, Koeck B. Exploring Entrepreneurial Legitimacy In Reward-Based Crowdfunding. Taylor Fr. 2014;16:247–69.
[27] Mochkabadi K, Volkmann C. Equity Crowdfunding: A Systematic Review Of The Literature. Small Bus Econ. 2020;54(1):75–118.
[28] Piva E, Rossi-Lamastra C. Human Capital Signals And Entrepreneurs’ Success In Equity Crowdfunding. Small Bus Econ. 2018;51(3):667–86.
[29] Troise C, Tani M, Jones P. Investigating The Impact Of Multidimensional Social Capital On Equity Crowdfunding Performance. Int J Inf Manage. 2020;55:102230.
[30] Vulkan N, Åstebro T, Sierra M. Equity Crowdfunding: A New Phenomena. J Bus Ventur Insights. 2016;5:37–49.
[31] Vismara S. Equity Retention And Social Network Theory In Equity Crowdfunding. Small Bus Econ. 2016;46(4):579–90.
[32] Connelly BL, Certo ST, Ireland RD, Reutzel C. Signaling Theory: A Review And Assessment. J Manage. 2011;37(1):39–67.
[33] Schwienbacher A. A Theoretical Analysis Of Optimal Financing Strategies For Different Types Of Capital-Constrained Entrepreneurs. J Bus Venturing. 2007;22(6):753–81.
[34] Tversky A, Kahneman D. Judgment under Uncertainty: Heuristics and Biases: Biases in judgments reveal some heuristics of thinking under uncertainty. Science [Internet]. 1974;185(4157):1124–31. Available from: http://dx.doi.org/10.1126/science.185.4157.1124
[35] Jr A. Do Behavioral Biases Vary Across Individuals? Evidence From Individual Level 401 (K) Data. J Financ Quant Anal. 2006;41(4):939–62.
[36] Benartzi S. Excessive Extrapolation And The Allocation Of 401(K) Accounts To Company Stock. J Finance. 2001;56(5):1747–64.
[37] Hoegen A, Steininger DM, Veit D. How Do Investors Decide? An Interdisciplinary Review Of Decision-Making In Crowdfunding. Electron Mark. 2018;28(3):339–65.
[38] Block J, Hornuf L, Moritz A. Which Updates During An Equity Crowdfunding Campaign Increase Crowd Participation? Small Bus Econ. 2018;50(1):3–27.
[39] Dorfleitner G, Hornuf L, Weber M. Dynamics Of Investor Communication In Equity Crowdfunding. Electron Mark. 2018;28(4):523–40.
[40] Ramcharan R, Crowe C. The Impact Of House Prices On Consumer Credit: Evidence From An Internet Bank. J Money Credit Bank. 2013;45(6):1085–115.
[41] Kim K, Hann I. Crowdfunding And The Democratization Of Access To Capital-An Illusion? Evidence From Housing Prices. Inf Syst Res. 2019;30(1):276–90.
[42] Liu XY, Liu J. Nankai Business Review International Article Information. Nankai Bus Rev Int. 2013;41:4–8.
[43] Angerer M, Brem A, Kraus S, Peter A. Start-Up Funding Via Equity Crowdfunding In Germany – A Qualitative Analysis Of Success Factors. J Entrep Financ. 2017;19(1):. Available from: Https://Doi.Org/10.57229/2373-1761.1290
[44] Agrawal A, Catalini C, Goldfarb A. Crowdfunding: Geography, Social Networks, And The Timing Of Investment Decisions. J Econ Manage Strategy. 2015;24(2):253–74.
[45] Schoeler G. Die Anwendung Der Oral Poetry-Theorie Auf Die Arabische Literatur. Islam - Zeitschrift Fur Geschichte Und Kult Des Islam Orients 1981;58:205–236. https://doi.org/10.1515/islm.1981.58.2.205.
[46] Lin M, Prabhala NR, Viswanathan S. Judging Borrowers By The Company They Keep. Manage Sci. 2013;59(1):17–35.
[47] Chernev A, Böckenholt U, Goodman J. Choice Overload: A Conceptual Review And Meta-Analysis. J Consum Psychol. 2012;25(2):333–58.
[48] Yang J, Liu L, Yin C. A Non-Liner Decision Model for Green Crowdfunding Project Success: evidence from China. Int J Environ Res Public Health. 2019 Jan;16(2):187. ; Epub Ahead Of Print.
[49] Cumming DJ, Leboeuf G, Schwienbacher A. Crowdfunding Models: Keep-It-All Vs. All-Or-Nothing. Financ Manag. 2020;49(2):331–60.
[50] Zhang N, Datta S, Kannan K. An Analysis Of Incentive Structures In Collaborative Economy: An Application To Crowdfunding Platform. Ssrn Electron J. 2014 Https://Doi.Org/10.2139/Ssrn.2518662
[51] Cordova A, Dolci J, Gianfrate G. The Determinants Of Crowdfunding Success: Evidence From Technology Projects. Procedia Soc Behav Sci. 2015;181:115–24.
[52] Koch JA, Siering M. Crowdfunding Success Factors : The Characteristics Of Successfully. Eur Conf Inf Syst; 2015. pp. 1–15.
[53] Hakenes H, Schlegel F. Exploiting The Financial Wisdom Of The Crowd — Crowdfunding As A Tool To Aggregate Vague Information. Ssrn Electron J. Epub Ahead Of Print 2014. https://doi.org/10.2139/Ssrn.2475025.
[54] Gujarati N. Functional Forms Of Infertility. 2009.
[55] Dftb T. Thinking Fast, And Slow. Don’t Forget The Bubbles. 2018. https://doi.org/10.31440/Dftb.17324.
[56] Gino F, Moore DA, Bazerman M. See no evil: When we overlook other people’s unethical behavior. Harvard Business School: Negotiation [Internet]. 2008. Available from: https://www.hbs.edu/faculty/Pages/item.aspx?num=35062
[57] Glaser M, Weber M. Overconfidence And Trading Volume. Geneva Risk Insur Rev. 2007;32(1):1–36.
[58] Statman M, Thorley S, Vorkink K. Investor Overconfidence And Trading Volume. Rev Financ Stud. 2006;19(4):1531–65.