Toward a Typology of Crowdfunding Motivations

Abstract

Crowdfunding is a modern approach to provide real-time financial assistance to those entrepreneurs who are interested in starting seed ventures. This phenomenon is developing slowly and the financial regulators are considering options to put appropriate checks and balances to regulate these activities. Although the experience of crowdfunding may not be satisfying as it ought to be, but there a sense of willingness on the part of the civil society to participate in crowdfunding as it is associated with a good cause. It is important to note that crowdfunding as a system is being based amongst small and mid-sized income group members. The motivation to support the cause of entrepreneurs is growing as the fund lenders are novice and in the threshold stage of supporting such seed ventures. The motivations of fund lender differ depending on their personal and environmental factors, especially in connection to the emerging laws and mandatory disclosures under the financial regulatory regime. In this paper, the focus is on (i) identification of what motivates fund lenders to support entrepreneurs and the impact of the fund movement.