In Search of Crowdfunding Business Models

Introduction

Crowdfunding has significantly changed the rules of entrepreneurship, in particular in the face of the low propensity of banking institutions to finance either startups, or poor or young ventures. Since 2005, crowdfunding platforms have substantially increased. Even if the demand is far from being satisfied as seen by more than 2.5 billion financially excluded individuals, it is noticeable that competition is growing among existing platforms. Such platforms consequently need to look for competitive advantages that allow them to position themselves favorably against their competitors.

However, the theory of strategy and management of crowdfunding is far behind its rampant growth. Concepts and theoretical models have not sufficiently developed to accompany and support the crowdfunding websites’ entrepreneurs, strategists and managers. This shortcoming likely causes costs and failures, in particular due to the current state of increasing competitive pressure in the sector. The concept of a business model, despite its strategic theoretical and practical importance, is one of these concepts that suffer due to the absence of a reliable definition.

Source: Google Scholar, checked on May 24, 2015.