New Academic Research on Crowdfunding

CrowdFund Beat News Wire, PRESS RELEASE
California Management Review Publishes Special Issue on Crowdfunding

Popular opinion suggests that major crowdfunding platforms serve to democratize the process of innovation, enabling entrepreneurs and creators in a way that could not be supported under traditional models. But emerging research paints a more nuanced picture.

The popularity of crowdfunding among entrepreneurs and investors has opened up new opportunities that would not have been possible in the pre-internet era. For example, pre-sales on Kickstarter allow would-be creators to get a sense of demand for their product before investing heavily in development and manufacturing. Other crowd-based platforms like LendingClub actively seek to subvert existing financial institutions by facilitating peer-to-peer lending.

“Crowdfunding offers something other funding mechanisms do not—a way to democratize access to the capital needed to commercialize and distribute innovation.”

As a rapidly emerging and evolving phenomenon, crowdfunding is still being studied extensively. A new collection of articles published in the latest issue of California Management Review highlights the strengths and weaknesses of crowdfunding as it exists today.




In 2014, musician and entrepreneur Jack Conte published a blog post describing the financials of his band Pomplamoose’s 28-day U.S. tour. Conte explained that despite selling out shows at many historic venues, the band actually lost over $11,000 on tour, providing evidence of the decline in the music industry. To combat this trend, Conte founded a new crowdfunding platform, Patreon, that allows supporters to send a defined amount of money to artists each time they release new material. He hoped that this would allow fellow creators to make a living in the new digital economy.

Conte is on the right track. Earlier this month, Patreon raised an additional $30 million in Series B funding. The platform joins a stable of successful crowdfunding websites like Kickstarter and Indiegogo, which have famously funded a wide variety of projects ranging from the production of albums and short films to 3D printers and smartwatches. While Conte’s success cannot be disputed, a major question remains: can crowdfunding become a solution for everybody, or just a handful of outliers?

SPECIAL ISSUE Crowdfunding

In the past, launching a company and shipping a product was something that could only be done by those who had money, or those who could attract investment from venture capitalists. But things are changing. The advent of crowdfunding platforms — internet-based marketplaces that connect those seeking funds with hundreds if not thousands of supporters — has been greeted with enthusiasm by entrepreneurs, policymakers, and the general public alike. Their enthusiasm is understandable: today, normal people can invest in ideas that they think might gain broad appeal. But crowdfunding remains an emerging and evolving phenomenon that is not well understood. Far from a fad, this mega trend is here to stay — and has broad implications across many industries.


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BloombergCouples Desperate For Children Turn to Crowdfunding FertilityBloombergCrowdfunding has become a popular mechanism for many couples who can't afford the high costs of IVF, or adoption and surrogacy. “It's not an easy thing to share publicly,” says Crystal Barrett, 33 [...]

Mountain XpressFaces in the crowd: WNC crowdfunding initatives | Mountain XpressMountain XpressEach week, Xpress highlights notable WNC crowdsourcing initiatives that may inspire readers to become new faces in the crowd. This week features a feature ...and more » [...]

Crowdfund InsiderMassive Rule 147 Amendments May Be On The Horizon Impacting Intrastate CrowdfundingCrowdfund InsiderAlmost a year ago, the SEC proposed certain amendments to the current Rule 147 which were intended to help foster, and increase the viability of, Intrastate crowdfundin [...]

AZCentral.comTiny companies lure investors under Arizona crowdfunding lawAZCentral.comInvestors who make bets under the state's one-year-old crowdfunding law certainly have the potential to get in on the ground floor, but they must be patient and might not receive any returns. Th [...]

MarketWatchWhy a crowdfunding site is giving out $10,000 scholarships ...MarketWatchIt's another indication that families are struggling with college costs.and more » [...]

Huffington PostReal Estate Crowdfunding's Pathway of ChangeHuffington Post“Crowdfunding is just the Internet,” stated Attorney Mark Roderick as he opened last month's RealCap Chicago. RealCap is an annual conference that joins crowdfunding leaders and innovators to propel th [...]

BBC NewsNHS trust 'relies' on crowdfunding to equip wardBBC NewsAn NHS trust has launched a crowdfunding appeal to buy equipment for a new hospital unit because "it cannot get started without donations". The Royal National Orthopaedic Hospital (RNOH) in Stanmore, n [...]

MottoIVF: More Couples Crowdfunding to Pay for Procedure - MottoMottoMore and more couples are turning to crowdfunding to fund costly in vitro fertilization (IVF) treatments, Bloomberg reports.More Couples Who Can't Afford IVF Are Turning To Crowdfunding For HelpRomperCouples des [...]

EntrepreneurIs Crowdfunding Right for You? Answer These 7 Questions to Find ...EntrepreneurLess than a third of crowdfunding campaigns reach their financial goals. Will yours be one of them?and more » [...]

ForbesVenture Crowdfunding Revisited: An Update with NIN VenturesForbesI am about to head off to attend the Global Crowfunding Convention (GCC) 6 in Las Vegas. It will be my fourth time attending. The crowdfunding industry has grown from $16 billion in 2014 to $34 billion in 2015, and [...]

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