Searching for Success—Entrepreneurs' Responses to Crowdfunding Failure. (May 2021)

• Record Type: Journal Article
• Authors: Piening, Erk P.; Thies, Ferdinand; Wessel, Michael; Benlian, Alexander
• Is Part Of: Entrepreneurship theory and practice. Volume 45:Number 3(2021)
• Page Start: 626
• Page End: 657
• Publication Date: 2021-05
• Subjects: failure -- problemistic search -- search distance -- entrepreneurs -- crowdfunding; Small business -- Periodicals; New business enterprises -- Periodicals; Entrepreneurship -- Periodicals; 658.421
• DOI: 10.1177/1042258720980710
• Languages: English
• ISSNs: 1042-2587

Abstract

In this study, we seek to provide new insights into the process of problemistic search by examining entrepreneurs' behavioral responses to failures. Using a comprehensive dataset of over 65, 000 crowdfunding projects, we specifically explore how negative performance feedback influences entrepreneurs' search distance. Our results demonstrate that the severity and persistence of failure have a U-shaped and inverted U-shaped relationship with search distance, respectively. Moreover, greater temporal distance between an entrepreneur's failure experience and a subsequent crowdfunding project is not only associated with increases in search distance, but also attenuates the curvilinear main effects.