Crowdfunding Research

Crowdfunding has taken off so quickly, that there is still relatively little research that can offer advice to creators, backers, platforms, and policy makers.  The Wharton Crowdfunding Study seeks to change this with your help.  To see the sort of research that I am conducting, here are a few major papers from my research so far (all the links go to free copies of the articles on the Social Science Research Network):

Crowdfunding democratizes access to funding. With Jason Greenberg of NYU, I have been examining examining how crowdfunding may increase the chances of success in raising funds for groups that have traditionally been at a disadvantage in in gaining access to money through more established channels, such as women in technology.

The crowd looks for signals of quality. I find that successful projects in crowdfunding seem to have the same characteristics as successful VC-backed projects: they demonstrate plans on how to deliver, show prototypes, indicate outside support by including quotes from journalists, and reference other successful work that the proposers have done in the past.

Fraud is rare, though delays are common. Crowdfunding has been remarkably free from fraud, even though over 75% of projects deliver late.  In my paper on the subject, I find that less than 1% of the funds in crowdfunding projects in technology and product design go to projects that seem to have little intention of delivering their results.  I think this is in large part due to the influence of community on the crowdfunding process.  The result is that (as covered in this great CNN piece) project creators almost always try to deliver, often at great cost to themselves.

The crowd and experts often agree. With Ramana Nanda of Harvard Business School, I have examined how experts, such as professional theater critics rate crowdfunding projects. We find that the crowd and experts generally agree, and that the crowd seems to often select more daring projects.