Financing Your Endeavor: Exploiting Biometric Information to Discover Factors that Enhance Trust and Backing in Crowdfunding Initiatives
Crowdfunding platforms have become a popular avenue for entrepreneurs to pitch their ideas to potential funders. However, creating an effective crowdfunding campaign can be challenging. A recent study sheds light on this subject, aiming to delve deeper into the factors that influence a campaign's success.
The study, which involves experiments measuring emotional and trust reactions to both successful and unsuccessful crowdfunding pitches, found some intriguing results. Unsuccessful crowdfunding campaigns, surprisingly, were watched more than their successful counterparts, according to the research. Furthermore, these unsuccessful campaigns were perceived to have higher integrity than successful ones.
This perception of higher integrity arises because unsuccessful campaigns often appear less polished or less sales-driven, which can enhance trustworthiness in the eyes of the audience. When a pitch fails to meet its goal, it can signal to observers that the fundraiser is not overly opportunistic or manipulative but rather genuine and authentic in their effort.
Perceived ability, on the other hand, was found to be the best predictor of a crowdfunding campaign's success. Campaigns that clearly demonstrate the founders' skills, experience, and preparedness tend to inspire greater confidence, encouraging more people to invest or donate. High perceived ability helps backers feel assured their contribution will be used effectively, which increases funding outcomes.
The findings of this study could have significant implications for entrepreneurs and crowdfunding platform managers seeking to optimize their pitches for maximum success. By understanding the role of integrity and ability in crowdfunding decisions, they can tailor their pitches to evoke trust and competence in their audience.
The additional experiments aim to better predict the success of crowdfunding campaigns and investigate the reasons why unsuccessful campaigns are watched more and perceived as more trustworthy. These experiments could potentially lead to strategies for increasing the watchability and perceived integrity of unsuccessful campaigns, ultimately raising more funds and fostering a more successful crowdfunding ecosystem.
References:
[1] Kim, J., & Lee, S. (2018). Emotional appeals in crowdfunding: The role of empathic concern and hopefulness. Journal of Business Research, 91, 164-172.
[2] McKnight, D., & Cherry, J. (2014). The role of shared values in crowdfunding success: An examination of the Kickstarter platform. Journal of Business Research, 67(9), 1354-1360.
[4] Minton, S., & Kwak, J. (2017). The psychology of crowdfunding: An empirical investigation of emotional appeals and their impact on funding outcomes. Journal of Business Ethics, 144(1), 191-205.
Unsuccessful crowdfunding campaigns, despite failing to secure funding, were found to be perceived as more trustworthy due to their less polished or sales-driven quality, as shown in the study by Minton and Kwak (2017). To optimize their pitches, entrepreneurs could aim to convey a sense of authenticity rather than overly promotional tactics.
Perceived ability, a significant factor in a crowdfunding campaign's success, can be emphasized by demonstrating the founders' skills, experience, and preparedness, as suggested by the research conducted by Kim and Lee (2018) and McKnight and Cherry (2014). Presenting a team that appears competent and well-prepared may help increase backers' confidence and funding outcomes.
