Crowdfunding Benefits For Early-Stage Entrepreneurs: Bridging The Gap Between Finance And Democracy

Abstract

By offering an alternative to equity, debt, and bootstrapping, crowdfunding has had a significant impact on the field of entrepreneurial finance. It enables entrepreneurs to leverage "the crowd" to generate financial investment and additional "value-added" benefits (Belleflamme et al., 2014; Harrison, 2013; Ordanini et al., 2011). In 2012, crowdfunding generated £2.7 billion in investment (Massolution, 2013). Although studies have started to shed light on the phenomena, they have tended to concentrate more on the dynamics of investment platform activity than the experiences of the entrepreneurs who participate in it. This study examines experimentally how early-stage entrepreneurs that participate in reward-based crowdfunding, one of the most popular types of crowdfunding, perceive the advantages.