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The Driving Forces Behind Crowdfunding Management Essay

How can you raise over 10,000,000 in support for a consumer merchandise, that is non yet produced, without any aid from Bankss, angel investors or venture capitalists. How can you do 100s of people pay for a repast they merely might have in a distant hereafter? How is it possible to turn 1000s of committed clients to besides go stockholders without the procedure of an IPO?

The reply is crowdfunding, which is a funding method that has exploded in popularity the last few old ages and that is altering the manner many persons, start-ups and concerns seek support ( kalla Forbes ) . “ The basic thought of crowdfunding is to raise external finance from a big audience ( the “ crowd ” ) , where each person provides a really little sum, alternatively of beging a little group of sophisticated investors ” ( Schwienbacher & A ; Larralde, 2010, p. 1 ) .

The persons, investors, clients or consumers that make up the “ crowd ” are called crowdfunders ( Schwienbacher & A ; Larralde, 2010, p. 4 ) and normally pool their money together via the Internet ( kalla )

An illustration of how powerful crowdfunding can be is the Pebble E-paper Watch, a smartwatch for iPhone and Android, which raised $ 10,266,845 in investings during approximately one and a half months on the crowdfunding platform Kickstarter ( Kickstarter. 2012c ) . Another illustration is the Swedish beefburger eating house Flippin ‘ Warren burgers, which got 100s of persons paying for a beefburger before the eating house even existed and at the same time financed the start-up of their now vastly popular locale in Stockholm ( kalla ) .

illustration of equity crowdfunding

The crowdfunding market has grown with 557 % in the last five old ages and crowdfunding platforms raised a sum of about $ 1.5 billion in 2011, transcending one million successful undertakings ( Massolution, 2012 ) . This figure is predicted to duplicate in 2012 with the current growing rate, which indicates that this nascent method of funding decidedly has the possible to do a significant alteration in the manner persons, start-ups and concerns seek funding ( kalla ) . The long-run potency of crowdfunding is difficult to foretell, but presently the phenomena of crowdfunding expressions assuring.

With scarce research on the topic, there are many facets of crowdfunding that are still undiscovered and with the projected industry growing, a demand will probably originate for a foundation of which enterprisers and directors can do informed determinations when hosting crowdfunding undertakings.

1.1. Background

The background chapter will foremost cover the consumer ‘s engagement over clip and it ‘s deductions on crowdfunding, so a definition of crowdfunding will follow and in conclusion three different types of crowdfunding will be presented.

1.1.1. The Consumer ‘s Engagement

Consumers have traditionally been positioned at the terminal of a houses value concatenation, but last decennaries their function have changed from non merely being a mark for selling activities, to really being a portion of the value creative activity of a houses ‘ merchandises or services ( Hunt, Geiger-Oneto & A ; Varca, 2012, p. 347 ) . The consumers have later become cardinal information beginnings, co-producers, spouses for invention and, eventually, co-creators of value in the related literature ( Ordanini, Miceli, Pizzetti & A ; Parasuraman, 2011, p. 444 ) . This displacement of focal point on the function of the consumer has led to frequent activities by many houses to affect consumers and unidentified persons in the procedure of merchandise development and value creative activity ( Zheng, Li, and Hou, 2011, p. 57 ) . Involving consumers as co-producers and co-creators besides provides value for the consumers and the procedure has been positively correlated with the consumers ‘ merchandise satisfaction ( Hunt et al. , 2012, p. 347 ) .

This development of the consumer ‘s function was made possible ab initio by the rise of the Internet and subsequently by technological inventions associated with “ Web 2.0 ” ( Kleemann, Vo? and Rieder, 2008, p. 5 ) . Web 2.0 is a look coined in 2004 observing a set of rules and patterns that had emerged on the Internet, such as users being co-developers of unfastened beginning development patterns ( O’Reilly, 2007, p. 19 & A ; 30 ) . Recently, the consumer ‘s function has besides expanded to include investing support. This phenomenon of corporate attempts by consumers and persons to pool their money together via the Internet to put in different undertakings is called crowdfunding ( Ordanini et al. , 2011, p. 444 ) . Kleemann et Al. ( 2008 ) argue that we are witnessing an emerge of a new consumer type called the “ on the job consumer ” . Ordanini et Al. ( 2011 ) besides describes the thought of crowdfunding, when consumers and persons pay for bring forthing and advancing a merchandise alternatively of purchasing it, as a farther measure in the development of the consumer ‘s function. In association with these enterprises of affecting the consumers as investors, there are several issues in the boundaries between selling and finance, that are non yet to the full explored and explained ( Ordanini et al. , 2011, p. 444 ) . Zheng et Al. ( 2011 ) have shown that consumers get involved in similar sort of enterprises to a great extent because of their intrinsic motives. However, the field of crowdfunding is still undiscovered when it comes to why and how consumers contribute with pecuniary investings, the choice of enterprises and what deductions these behaviours within crowdfunding should hold for houses and directors prosecuting in these sort of activities ( Ordanini et al. , 2011, p. 444 ) .

1.1.2. A Definition of Crowdfunding

Crowdfunding is defined as:

A A A

“ an enterprise undertaken to raise money for a new undertaking proposed by

person, by roll uping little to moderate-sized investings from several other people

( i.e. a crowd ) ” ( Ordanini et al. , 2011, p. 444 )

The histrions involved in crowdfunding are the people who propose undertakings to be funded, the crowdfunding organisation and the crowd itself. The crowdfunding organisation serves as a signifier of hub, conveying together those who may desire to put in crowdfunding enterprises and those who seek investings for their undertakings via crowdfunding ( Ordanini et al. , 2011, p. 444-445 ) . These crowdfunding organisations typically conduct their concern via a web site, ( comparison: hypertext transfer protocol: //www.indiegogo.com/ , hypertext transfer protocol: //www.kickstarter.com/ and hypertext transfer protocol: //www.sellaband.com/ ) in which histrions can publicize their crowdfunding enterprises to the crowd.

The crowdfunding phenomena is much like regular investings, some attempts are successful and some are non. A popular crowdfunding site at the clip of authorship, Kickstarter, reports that 43.81 % of the crowdfunding undertakings at their web site are successful A ( Kickstarter. 2012d ) . They besides report that they do non accept merely any crowdfunding petition and that approximately 25 % of submitted undertakings are non accepted to the site ( Kickstarter. 2012b ) . This means, in pattern, given that their Numberss are right, that about one tierce ( 0,75*0,4381a‰?1/3 ) of the attempted crowdfunding undertakings at the web site in inquiry are successful. One illustration of such a successful crowdfunding undertaking in 2012 is Pebble E-paper Watch, which in sum raised $ 10,266,845 in investings during approximately one and a half months ( Kickstarter. 2012c ) . This demonstrates that it is so possible to obtain big investings from crowdfunding.

1.1.3. Different Types of Crowdfunding

Crowdfunding can be divided into three different types of crowdfunding enterprises: ( Schwienbacher & A ; Larralde, 2010, p. 13 )

Contributions – inquiring for contributions instead than offering some sort of fiscal or compensable inducement in exchange of an investing ( Schwienbacher & A ; Larralde, 2010, p. 13 ) . Example: Raising money for a good cause, like surgery of a morbid kid.

Passive investings – giving some signifier of inducement in exchange for investings, these inducements can take many signifiers. In general a higher investings yields a higher inducement. Most crowdfunding like this does non offer any sort of possibility for the investor to take part in the undertaking. This is in other words a signifier of crowdfunding where the enterprisers raise money without giving up control or holding the clients actively involved ( Schwienbacher & A ; Larralde, 2010, p. 13 ) . Example: Pre-ordering of a merchandise ( such as a music Cadmium ) .

Active investings – offering an active function in the enterprise in exchange for investings. This could include offering portions of the net income or vote rights for characteristics of the merchandise. As in the instance of inactive investings, a higher investing in active investings by and large yields a higher inducement. The enterprisers can in this manner addition penetration in their markets and receive valuable information of how the market thinks the merchandise should be customized ( Schwienbacher & A ; Larralde, 2010, p. 13-14 ) . This type of investing with engagement in co-production, increases merchandise satisfaction ( Hunt, Geiger-Oneto & A ; Varca, 2012, p. 354 ) . Example: Offer portions of net income from a concert, in proportion to how much money is invested.

1.2. Problem Discussion and Previous Research

As a new emerging phenomena, crowdfunding and its effects for concerns

and consumers are non to the full understood. For case: what drives the battle of consumers to put in crowdfunding enterprises? ( Ordanini et al. , 2011, p. 444 ) One interesting manner of nearing this inquiry is stated by Ordanini, Miceli, Pizzetti and Parasuraman ( 2011, p. 446 ) :

“ Some extant literature watercourses are helpful in supplying an appropriate background for understanding crowd-funding, although penetrations from each watercourse merely address some but non all facets of this emerging phenomenon. ”

This method provides an helpful model for nearing the job. The histrions that invest in crowdfunding undertakings can be seen as both clients and investors ( Schwienbacher & A ; Larralde, 2010, p. 13 & A ; Ordanini et al. , 2011 ) . This, in combination with the statement above, suggests that it is interesting to look into why people participate and invest in crowdfunding undertakings both from a client behaviour position and an investing behaviour position. Crowdfunding is every bit mentioned in 1.1.2 conducted online. If crowdfunders are seen as clients, the act of take parting in crowdfunding can be compared to client behaviour in on-line shopping.

Research in on-line client behaviour suggest that clients are motivated by extrinsic and intrinsic motives when shopping online ( Shang, Chen, & A ; Shen, A 2005, p. 401 ) .

Since crowdfunding is a comparatively new phenomena, the literature in the topic is far from extended. To show this, illustrations of hunts in Scopus and Thomson Reuters ‘ Web of Knowledge as of the 25th of October 2012 will be presented below. Scopus and Web of Knowledge are extended databases tracking commendations with 47 million ( SciVerse, 2012 ) and 49,4 million ( Web of Knowledge, 2011 ) records severally. A hunt for the term “ crowdfunding ” in Scopus rendered 5 consequences when restricting the consequences to articles. The same hunt in Web of Knowledge rendered 9 articles. Out of all these articles the oldest 1 was from 2011 ( Ley & A ; Weaven, 2011 ) , and the remainder were published in 2012. This demonstrates that crowdfunding is so a new phenomena, and from these speedy hunts it can be concluded that the literature in crowdfunding is scarce.

In a reappraisal of the literature found during the literature survey which laid the foundation to this thesis ( and included broader hunt footings than the above mentioned ) it was found that it was merely Ordanini, Miceli, Pizzetti & A ; Parasuraman ( 2011 ) who have studied how and why people engage in crowdfunding enterprises. The writers did this by carry oning interviews with employees at three major crowdfunding platforms. Their findings revealed that crowdfunding participants ‘ motives were really dependent on the type of undertaking. Their survey showed that the chief motive is backing for music undertakings, pecuniary return for fiscal lending and societal engagement for charity. However, their findings are based on interviews with sources from the crowdfunding intermediates without including any single investors in their survey. It appears to be a cognition spread from an investor position, look intoing the investors ‘ motives to take part in crowdfunding enterprises.

Since the histrions prosecuting in crowdfunding enterprises can be seen as both clients and investors ( Schwienbacher & A ; Larralde, 2010, p. 13 & A ; Ordanini et al. , 2011 ) , it is interesting to research why persons get involved in crowdfunding both from a client behavioural position and an investing behavioural position. To the extent of our cognition, this has non been covered in the literature so far. A In drumhead, the literature on crowdfunding is scarce and while some facets of crowdfunding has been studied, others remain undiscovered. The intent of this survey is to try to make full the mentioned cognition spread about motives in the literature of crowdfunding and lend to widening the research on crowdfunding. This thesis will analyze the factors that motivate customers/investors to prosecute in inactive crowdfunding undertakings.

1.3. Research Questions

The job description has resulted in the undermentioned research inquiries:

1. How do crowdfunders ‘ intrinsic and extrinsic motives affect their size of investing in inactive crowdfunding undertakings?

2. How of import is the influence of other crowdfunders ‘ investings?

1.4. Aim

The intent of this survey is to research the comparatively new phenomena of crowdfunding and analyze the motivational factors that make people invest in crowdfunding undertakings. By analyzing why consumers invest in crowdfunding undertakings this survey is intended to lend to make full the cognition spread identified in the job description. The literature in general about crowdfunding is scarce and to our cognition this type of survey about crowdfunding has non been conducted before.

Praktiska tillampningar

1.5. Disposition

The temperament of the thesis will be as follows, after this subdivision a chapter about the theory used in this thesis will be presented, followed by a chapter about the research design and methods used. After that, the consequences of our studies will be presented and a critical treatment about the consequences will follow. At the really terminal, the decisions from the survey will be presented and after that a list of mentions and appendixes will finalise this essay.

2. Theory

This chapter will show the theory that lays the foundation to the thesis. First, client behaviour and relevant motive theory will depict and related to crowdfunding, including the of import differentiation made in this thesis between intrinsic and extrinsic motive. Second, relevant investing behaviour theory related to crowdfunding and an account of the phenomena of impulse in crowdfunding will be explained.

2.1 Customer Behavior

As mentioned in the job treatment, the persons take parting in crowdfunding undertakings can be seen as both clients and investors ( Schwienbacher & A ; Larralde, 2010, p. 13 & A ; Ordanini et al. , 2011 ) . The first research inquiry of this thesis is “ What motivates crowdfunders to put in crowdfunding undertakings? “ , hence motive theories will be presented below. In general, motive research A is directed to happening motivations for peoples behavior ( Sheth & A ; Mittal, 2004, p. 234 ) . Within client behaviour, motive research is aimed at happening out “ the witting or subconscious grounds that motivate people to purchase or non to purchase a peculiar merchandise, service or trade name, or to sponsor or avoid a shop, or to accept or reject a selling communicating ” ( ibid. ) . In this survey, the research will be aimed at happening out the grounds why clients engage in crowdfunding enterprises, in other words, why they purchased the inducement offered at a given investing degree.

2.1.1. Motivation

Ryan & A ; Deci describes to be motivated as the “ means to be moved to make something ” ( 2000a, p. 54 ) . A individual who is motivated is a individual who is inspired, energized or activated to move, where as an unmotivated individual, feels no thrust, inducement or stimulation to move. Motivation can be measured in footings of the degree of motive and the orientation of the motive. The degree of motive refers to how much motive an person has, for illustration when a possible client is out shopping for a auto, if the salesman who assists the client get paid in footings of committee it could be expected that this salesman has a higher degree of motive to do the sale than if the same salesman would hold a fixed wage and no committee. The orientation of motive refers to the underlying motivations, ends and attitudes of the motive, in other words why person is motivated. An illustration of orientation of motive is that a pupil may make her prep because she finds it interesting and challenging, or the pupil may make her prep because her instructor and parents require her to make it. The pupil in this illustration may hold equal degree of motive in both instances, but the nature of the motive is wholly different because of its beginning ( Ryan & A ; Deci, 2000a, p. 54-55 ) .

A basic differentiation of orientations of motive is the differentiation between intrinsic motive and extrinsic motive: ( Ryan & A ; Deci, 2000a, p. 55 )

2.1.1.1. Intrinsic Motivation

Intrinsic motive is an orientation of motive that origins in making something for its built-in satisfactions instead than making something to accomplish an result. An per se motivated individual is a individual who is motivated because an activity is merriment, disputing, fresh, interesting or merely put fulfilling psychological demands ( Ryan & A ; Deci, 2000a, p. 56-57 ) . This can be compared to that kids from the day of the month of birth are active, funny and playful in despite of wagess being absent. It is a natural motive that encourages “ assimilation, command, self-generated involvement and geographic expedition that is so indispensable to cognitive and societal development and that represents a chief beginning of enjoyment A and verve throughout life ” ( Ryan & A ; Deci, 2000b, p. 70 ) .

In crowdfunding, illustrations of intrinsic motive could be to fund a technological undertaking of a appliance because it is fun, or funding a undertaking raising money for surgery of a kid out of compassion. An of import construct in the instance of charity is warm-glove giving. Warm-glove giving agencies that givers are egoistically motivated by the act of giving and non merely the altruismA A A ( Andreoni, 1990, p. FIXA ) .

2.1.1.1. Extrinsic Motivation

Extrinsic motive is in contrast to intrinsic motive when the beginning of motive prevarications in obtaining a dissociable result from executing an activity. Satisfying psychological demands is non needfully related to extrinsic motive, alternatively extrinsic motive covers the continuum between amotivation and intrinsic motive ( Ryan & A ; Deci, 2000b, p. 71-72 ) . An illustration of this is that a pupil may make her prep because she fears countenances from her parents or because the pupil unfeignedly believe that making the prep will be valuable for her future calling. In the latter instance intrinsic motive and feeling of pick is present, while in the anterior instance external control and conformity is at hand. Even though both instances involves knowing behaviour, the types of extrinsic motive is different because they vary in liberty.

In crowdfunding, illustrations of extrinsic motive could be to fund a technological undertaking of a appliance because an inducement given is the existent appliance, or funding an creative person ‘s concert for a portion of the net income.

2.1.2 Shopping experience

2.2. Investing Behavior

Harmonizing to Ordanini et Al. ( 2011 ) , the emerging phenomena of crowdfunding has transformed consumers into investors. The consumers are lending financially to other peoples ‘ or organisations ‘ undertakings and expect either a pecuniary or non-monetary inducement for their support. Therefore, the features of crowdfunding are really similar to fiscal investings and the behaviour of crowdfunders can thereby resemble the investing behaviour of persons in fiscal markets A ( Ordanini et al. , 2011, p. 450 ) .

Herding Behavior in Online Shopping

A big group ( a crowd or rabble ) is likely to demo illustrations of group behavior

2.2.1. Herding Behavior in Financial Markets

Crowdfunding undertakings seem to follow similar forms where the funding of the crowdfunders triggers a concatenation reaction and facilitates rapid growing at a certain point ( Ordanini et al. , 2011, p. 457-458 ) . This sort of snowball consequence in the crowdfunders ‘ behaviour, of something little edifice upon itself and going larger, can be found and be explained in several investing state of affairss and can be both positive and negative. This investing behaviour can be found as a negative consequence in bank tallies ( Iyer & A ; Puri, 2012, p. 1414 ) and as a positive consequence in rational herding in fiscal economic sciences ( Devenow & A ; Welch, 1996, p. 603 ) . Bank tallies are state of affairss when bank clients withdraw their sedimentations from Bankss because they do n’t believe that the bank can maintain them safe. This phenomenon has been a perennial instance in the history, from the Great Depression in the 1930 ‘s, to the fiscal crisis late ( Iyer & A ; Puri, 2012, p. 1414 ) . The same form can be found in rational herding in the fiscal markets, when investors act based on other investors ‘ determinations instead than information about the investing itself ( Masson, Gotur & A ; Lane, 2001, p. 100 ) . Imitation and apery are two of the worlds most basic inherent aptitudes, which could partially explicate why investors are influenced by the determinations of other investors in fiscal economic sciences ( Devenow & A ; Welch, 1996, p. 603 ) . Rational herding occurs because of final payment outwardnesss and information outwardnesss. Payoff outwardnesss is when investors benefit from other investors following their actions and information outwardnesss is when investors gain utile information from detecting old investors ‘ determinations to a degree where they consider it to be more dependable than their ain information ( Masson, Gotur & A ; Lane, 2001, p. 100 ) .

2.2.2. Investing Momentum in Crowdfunding

Ordanini et Al. ( 2011 ) have found that a similar impulse in crowdfunding occurs at a perennial phase of the crowdfunding procedure and they have identified three distinguishable stages in the investing procedure that are applicable to most crowdfunding undertakings. The first stage includes the investings making about half of the undertaking ‘s mark capital and largely consists of investings from people who are straight connected to the undertaking or the web of the Godhead of the undertaking. The accent in this stage is the engagement of people related to the undertaking or the Godhead to roll up a start support underlying the remainder of the crowdfunding procedure ( Ordanini et al. , 2011, p. 457-458 ) .

The 2nd phase normally slows down in investing growing and is considered to be the most delicate and of import stage, since it typically determines if a undertaking fails or succeeds. Motivating and affecting people in this stage is important to trip the crowding procedure and the inability to make so is a really common ground for failure ( Ordanini et al. , 2011, p. 457-458 ) .

The 3rd and last stage is when a undertaking triggers a concatenation reaction that facilitates rapid growing to make and, in some instances, exceed the investing mark. The crowdfunders in this stage are chiefly people without any original connexion to the undertaking and the investing procedure normally speeds up when it comes closer to the accumulated mark investing. Ordanini et Al. ( 2011 ) claim that the ground for this is that in many instances, the chance to put will vanish as the undertaking reaches its mark investing. In this state of affairs, the crowdfunders act really similar to investors in the fiscal markets and cipher want to lose the chance to put and be a portion of the undertaking, which consequences in a concatenation reaction triping more and more people to put ( Ordanini et al. , 2011, p. 457-458 ) .

Crowdfunding impulse graph? ( Ordanini )

3. Method

This chapter will explicate the method used in this thesis. First a wide perspecitve of the method used will be presented, the Research attack and Research design. After that a more narrow position and thesis particular inside informations will be presented ; the Research scheme utilizing studies, the conductivity of the study and the information analysis. Finally the dependability, cogency and replicability of this survey and the presentation of informations will be presented.

3.1. Research Approach

As shown, crowdfunding is a topic on which there is small existing literature and scarce cognition. Because of the deficient anterior research on the subject, it is merely non possible to specify a theoretical model for a hypothesis, which precludes a deductive research attack ( Saunders et al. , 2007, p. 127 ) . The research inquiries emphasizes on why something is go oning, instead than being able to depict what is go oning, which implies that a more inductive attack would be appropriate ( Saunders et al. , 2007, p. 126 ) . Although, an inductive attack involves pulling generalizable illations out of observations ( Bryman & A ; Bell, 2007, p. 14 ) , which is non an accurate relationship between the theory and informations in the survey since the research inquiries are based on old surveies. The aim of the survey is to detect new variables and relationships and to emphasize theory development, instead than theory coevals or verification of bing theory. For such a survey, Dubois & A ; Gadde ( 2002 ) suggest an abductive attack which enables uninterrupted interplay between theory and empirical observations. The abductive attack besides allows the model to be in turn modified as a consequence of unforeseen findings and penetrations during the research procedure, which enables new decisions when theoretical theoretical accounts and new constructs encounter the world ( Dubois & A ; Gadde, 2002, p. 559 ) .

3.2. Research Design

The research desigend is intended to bring forth grounds to reply the research inquiries that are established and to move as a model for the research procedure ( Bryman & A ; Bell, 2007, p. 39-40 ) . The survey entails informations from several instances at a individual point in clip in order to roll up quantifiable informations to observe forms of associations. Because of this, this survey is based on a cross-sectional design, which is the survey of a phenomena in a given point in clip ( Saunders, 2007, p. 155 ) . A A cross-sectional design enables analyzing several variables to research possible fluctuations, which suits the research inquiries of placing motives and separating differences between different classs in crowdfunding. In cross-sectional design research, the information is besides collected at the same time, in contrast to experimental design, and the information is quantifiable by a systematic method for measuring and benchmarking. However, with the cross-sectional design it is merely possible to analyze relationships without being certain of the insouciant influence, in contrast to an experimental design where variables are manipulated ( Bryman & A ; Bell, 2007, p. 55 ) . Although a cross-sectional research design is sufficiently equal to function as a foundation for pulling certain illations ( Bryman & A ; Bell, 2007, p. 56 ) .

3.3. Sampling

This survey has been conducted on the following crowdfunding web sites:

hypertext transfer protocol: //www.rockthepost.com/

hypertext transfer protocol: //www.sponsume.com/

hypertext transfer protocol: //www.helpersunite.com/

hypertext transfer protocol: //peerbackers.com/

hypertext transfer protocol: //www.sellaband.com/

The ground for taking the above mentioned crowdfunding web sites is that they permit reaching the participants in their crowdfunding undertakings via the web sites ‘ several internal mail systems. There are a few more crowdfunding web sites in which it is possible to reach investors, but some require that you have invested in the same undertaking as the users that you want to reach and others have no compulsory contact information, significance that the users manually would hold to post their contact information in their description to be contactable through the web site. Deserving noting is that even in the web sites chosen for this survey, there are some users that can non be contacted because of the option of being anon. when investment.

The survey is besides, as mentioned in the research inquiries, limited to passive investings in crowdfunding. Within inactive investings this thesis is besides limited to merely successful crowdfunding undertakings, because the crowdfunding websites appear to take the unsuccessful undertakings as to non deter possible clients. This makes it impossible to entree information about unsuccessful crowdfunding undertakings without the proprietors of the web sites ‘ coaction. Collaborating with the crowdfunding web sites themselves has though been judged to be out of the range for this survey due to clip limitations.

A effect of analyzing merely successful crowdfunding undertakings is that the participants in our survey are asked about their motives retrospectively. This means that the participants ‘ investing motives instead are their retrospective rationalisation of their investings, than their determination devising procedure prior to the investing. Therefore, it is impossible to find to what degree the customers/investors were affected by any post-purchase rationalisation or disagreement to warrant their investings. In an effort to counter this job, merely crowdfunders that have participated in crowdfunding undertakings that have late ended has been contacted. The clip frame chosen for this was one hebdomad. Within the crowdfunding undertakings chosen within the different classs of crowdfunding no sampling were made, alternatively all participants that were non anon. were contacted.

3.4. Research Strategy: Surveies

The research scheme chosen for this thesis is surveys in the signifier of Internet questionnaires. This research scheme has been chosen because it is common in concern and direction research and let for aggregation of big sums of informations to a comparatively little cost ( Saunders, 2007, p. 144 ) . Given the quota sampling and the internal mail systems provided by the crowdfunding sites, Internet studies provided us with a simple solution of making out to all participants in selected crowdfunding undertakings, seeing as it was reasonably easy to reach the crowdfunders via the internal mailing system. This allowed for bring forthing findings that are representative for the full population in the chosen crowdfunding undertakings. In comparing to question this is besides a less clip devouring scheme and visual perception as this is a unmarried man thesis, clip is of the kernel.

Surveies allows for roll uping big sums of informations for statistical analysis. The informations collected from studies could for illustration be used for proposing possible relationships between variables and produce theoretical accounts for these relationships ( Saunders, 2007, p. 144 ) ( Bryman & A ; Bell, 2007, p. 56 ) . This is much in line with our research inquiries. A

3.4.1 Survey Design

When planing a study it is of import to utilize standardised inquiries that will are likely to be interpreted in the same manner by all respondents ( Saunders, 2007, p. 393 ) .

The studies sent out to the different crowdfunding undertakings where hence indistinguishable.

Language – not native English talkers

The questionnaire consists of XX inquiries in entire, this because a questionnaire should non be longer than is necessary to run into the research aim and that it is by and large believed that a shorter questionnaire has a higher response rate than a longer questionnaire ( Saunders, Lewis, & A ; Thornhill, 2012, p. 436 ) .

Planing inquiries

( Bryman & A ; Bell, 2007, p. 266-271 )

Using web sites to roll up informations from persons

( Bryman & A ; Bell, 2007, p. 665 )

Web Surveys

( Bryman & A ; Bell, 2007, p. 676 )

Aims when doing the study

Sing as open-ended inquiries are non suited for studies ( Saunders, 2007, p. 393 ) a Likert graduated table will be used to mensurate each inquiry.

3.4.1.2 Likert Scale A

A Likert Scale is bla bla bla and bla bla bla

Resonable to aˆ¦ . ‘

Questionnare Design and Likert Scale

( Bryman & A ; Bell, 2007, p. 247-250 )

“ Strongly hold ” and “ Strongly disagree ” ( Saunders, Lewis, & A ; Thornhill, 2012, p. 436 )

3.4.2 Operationalization

In this subdivision the study inquiries are formulated and motivated based on the theory presented in the Theory chapter. First the inquiry mensurating the result variable size of investing will be explained followed by the inquiries which steps forecaster variables, presented in the same order as presented in the Theory.

3.4.2.2 Outcome variable: Size of investing

An result variable is a variable that is assumed to alter as a map of forecaster variables. An result variable is sometimes called a dependant variable ( Field, 2009, p.7 ) . Sing as the first research inquiry is: How do crowdfunders ‘ intrinsic and extrinsic motives affect their size of investing? , mensurating size of investing as an result variable is an obvious pick. The inquiry was formulated as:

Question X. How much did you put in the undertaking?

This inquiry allowed the respondent to manually come in any figure in the reply field.

3.4.2.3 Predictor variable: Intrinsic motive

A forecaster variable is synonymous with an independent variable and is a variable that to some extent is thought to foretell the result variable ( s ) . All of these forecaster variables will be measured in a Likert graduated table of 1 to 7, unlike otherwise indicated.

Ryan & A ; Deci have written two articles about intrinsic and extrinsic motive ( 2000a & A ; 2000b ) , in one of them merely below the headline of Intrinsic motive ( 2000a, p. 56 ) they write:

“ When per se motivated a individual is moved to move for the merriment or dispute entailed instead than because of external goads, force per unit areas, or wagess ”

This suggests that the features merriment and disputing are two of import constructs in the theory of intrinsic motive. Sing as funding a inactive investing undertaking in crowdfunding is barely ambitious in other footings than happening interesting undertakings and doing the existent payment, the factor merriment is more likely an of import factor that motivates crowdfunders. This led to the undermentioned study inquiry:

Question x. I funded the undertaking because it was merriment

In Ryan & A ; Deci ‘s other article about intrinsic and extrinsic motive, they write below the headline of Intrinsic motive ( 2000b, p. 70 ) that:

“ … intrinsic motive, the built-in inclination to seek out freshness and challenges, to widen and exert one ‘s capacities, to research, and to larn. ”

Using the same logical thinking as above, excepting challenges, this citation suggests that freshness is an of import incentive. Therefore the study included a inquiry about the freshness of the undertaking:

Question x. I funded the undertaking because I thought it was advanced

In an effort to step besides the intrinsic motives involved in the procedure of taking portion in crowdfunding, a concluding inquiry mensurating the intrinsic motive was formulated:

Question x. Crowdfunding is an merriment construct that I like to prosecute in

Question x. I funded the undertaking because I wanted the undertaking to win

Question x. I funded the undertaking because I wanted to lend to the undertaking

3.4.2.4 Predictor variable: Extrinsic motive

Extrinsic motive is described as motive deducing from obtaining a dissociable result. To mensurate the importance of extrinsic motive the undermentioned inquiry was formulated:

Question ten. Receiving a merchandise or service was of import to me when puting in the undertaking

3.4.2.5 Predictor variable: Investment Behavior & A ; Momentum in Crowdfunding

Rational herding theories about investing behaviour suggest that investors act based on other investors ‘ determinations instead than information about the investing itself, i.e. detecting old investors ‘ determinations to a degree where they consider it to be more dependable than their ain information. To analyze whether this behavior applies to crowdfunding, the undermentioned inquiries were formulated:

Question ten. The fact that other people already had invested made me more confident that the project/product/cause was good

Question ten. The undertaking was funded to the undermentioned grade when I invested

The latter inquiry was non measured by a Likert graduated table of 1 to 7, but alternatively on a Scale of 1 to 3. 1 represented that 0-50 % of the undertakings end had been reached, 2 represented 50-100 % and 3 everything above 100 % .

Surveies about investing impulse in crowdfunding indicates that the initial stage of investings, making about half of the undertaking ‘s mark capital, largely consists of investings from people who are straight connected to the undertaking or the web of the Godhead of the undertaking. Having a connexion to a undertaking besides likely motivates the crowdfunder per se to put. To analyze if the stage invested in is connected with the crowdfunder ‘s intrinsic motives and connexion to the undertaking, the undermentioned inquiry was formulated:

Question x. I had some sort of connexion to the undertaking or the Godhead before puting, i.e. friend, household, co-worker, through societal webs, etc.

3.4.3 The order of inquiries

When building a questionnaire it is utile to set the order and flow of the inquiries, so that they appear logical to the respondent. In the beginning of the questionnaire inquiries that are straightforward and gratifying, such as inquiries about properties and behaviour, should be placed ( Saunders, Lewis, & A ; Thornhill, 2012, p. 444-445 ) . With this as guidelines the undermentioned inquiry order was chosen:

Question 1.

Question 2.

Question 3.

Question 4.

Question 5.

Question 6.

Question 7.

Question 8.

Question 9.

The same order of inquiries is used for all conducted studies in this thesis, this because changing the inquiry order can impact the result of the questionnaire ( Bryman & A ; Bell, 2007, p. 221 ) .

3.5. Conducting the study

The study was conducted on XXth of November until YYth of December 2012. Below the first stage of carry oning the study ; the pilot survey will be explained, followed by the distribution inside informations and response rates.

3.5.1 Pilot study

Before the study was conducted, a minor pilot survey were made to prove the quality of the study prior to the informations aggregation. This pilot study resulted in no major penetrations and led to no important alterations in the study design.

3.5.2 Distribution

The study was distributed through the internal mail system on the chosen crowdfunding sites. This distribution technique does to a higher degree guarantee that it is so the intended respondents that answer the study, than would it hold been a postal study, a bringing and aggregation study or a telephone study ( Saunders, 2007, p. 364 ) . To non impact the respondents ‘ replies, the exact same electronic mail was sent out to all crowdfunders:

*Mail design, bild*

3.5.2 Response rate

When carry oning a Internet study a response rate lower than 11 % can be expected ( Saunders, 2007, p. 364 ) , hence a sum of XX crowdfunding undertakings and YY crowdfunders have been contacted. A sensible clip as to when the informations aggregation can be considered complete for this type of study is 2-6 hebdomads ( Saunders, 2007, p. 364 ) . In this survey the information was compiled and analyzed XXXXXXX hebdomads after the last electronic mail was sent out to the crowdfunders, which is within the recommended clip period.

When the information was compiled a entire figure of YYYY crowdfunders had responded to the study. The distribution were as follows:

*snygg tabell*

Nagot om tabellen

Bortfall?

3.6. Datas Analysis

The informations obtained from the study was analyzed by multiple arrested development analysis in IBM SPSS Statistics ( which is a package suited for this type of analysis ) . The inquiries mensurating the motives of crowdfunders ( forecaster variables ) were tested relation to the size of investing ( the result variable ) .

Dummy variables

( Field, 2009, p. 300 )

Relationships non causality

Eventuality tabular arraies

Pearson ‘s R

( Bryman & A ; Bell, 2007, p. 360-362 )

Statistical Significance

( Bryman & A ; Bell, 2007, p. 367-371 )

3.7. Dependability, Validity and Replicability

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3.7.1 Dependability

Reliability is a measuring of how dependable a survey is, how dependable the research attack is and how dependable the measurement is. It is of import that research workers are independent and do non impact the respondents replies ( Eriksson & A ; Wiedersheim-Paul, 2006, s. 59 ) . To counter act this non taking inquiries has been formulated and a pilot survey conducted proving the questionnaire before subjecting it to the crowdfunders. Besides the full class of action has been explained exhaustively, go forthing it up to the readers to judge themselves if this survey ‘s consequences are dependable.

3.7.2 Cogency

When planing a study it is of import to utilize standardised inquiries that will are likely to be interpreted in the same manner by all respondents ( Saunders, 2007, p. 393 ) .

3.7.3 Replicability a†? kanske gar in one dependability? Eller utveckla mer har..

( Bryman & A ; Bell, 2007, p. 58 )

( Saunders, Lewis, & A ; Thornhill, 2012, p. )

3.8. Presentation of Datas

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4. Consequences

5. Discussion

6. Decisions

6.1.

6.2. Restrictions

6.3. Suggestions for Future Research