Internal Social Capital and the Attraction of Early Contributions in Crowdfunding. (January 2015)

• Record Type: Journal Article
• Authors: Colombo, Massimo G.; Franzoni, Chiara; Rossi–Lamastra, Cristina
• Is Part Of: Entrepreneurship theory and practice. Volume 39:Number 1(2015:Jan.)
• Page Start: 75
• Page End: 100
• Publication Date: 2015-01
• Subjects: Small business -- Periodicals; New business enterprises -- Periodicals; Entrepreneurship -- Periodicals; 658.421
• DOI: 10.1111/etap.12118
• Languages: English
• ISSNs: 1042-2587

Abstract

The nascent crowdfunding literature has highlighted the existence of a self–reinforcing pattern whereby contributions received in the early days of a campaign accelerate its success. After discussing what sustains this pattern, we maintain that the internal social capital that proponents may develop inside the crowdfunding community provides crucial assistance in igniting a self–reinforcing mechanism. Results of an econometric analysis of a sample of 669 Kickstarter projects are consistent with this view. Moreover, the effect of internal social capital on the success of a campaign is fully mediated by the capital and backers collected in the campaign's early days.