Success Factors in Reward based and Equity based Crowdfunding in Finland

Yearly Global Crowdfunding Volumes 
Billion USD 

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Master’s Thesis 
16 
3. Motivations to Participate in Crowdfunding 
3.1. Motivations of Entrepreneurs 
Entrepreneurs have numerous reasons to initiate a crowdfunding project. Motivations 
vary between creators and between project types. According to 
Gleasure (2015), the 
perceived benefits of crowdfunding differed from one entrepreneur to another. 
Despite these differences, all crowdfunding initiatives have one motivation in com-
mon. A major motivation of entrepreneurs is to raise financial capital through crowd-
funding (
Mollick, 2014; 
De Buysere et al., 2012; Gerber and Hui, 2013; Manchanda 
and Muralidharan, 2014; Lasrado and Lugmayr, 2013;
Wheat et al., 2013). Crowd-
funding enables entrepreneurs to seek funding from a crowd for a one-time project 
(Mollick, 2014) or for financing a start-up business (
De Buysere et al., 2012). This is 
a great opportunity for small businesses that have limited financing options (Val-
anciene and Jegeleviciute, 2013). The variety and sheer amount of crowdfunding ini-
tiatives means financial capital requirements differ as well. The amount of capital 
raised through crowdfunding is often small, with the median amount being 6400€ 
(
Belleflamme et al., 2013)
. 
Entrepreneurs also use crowdfunding as a way to present and market their ideas 
(Belleflamme et al., 2013). This enables creators to build awareness and interest for 
the project (Mollick, 2014; 
Manchanda and Muralidharan, 2014; Gerber and Hui, 
2013; De Buysere et al., 2012). Public interest at an early stage can be very valuable 
for the entrepreneur for several reasons - it can translate into funding, market demand, 
word-of-mouth or feedback for product development. Since crowdfunding initiatives 
are typically facilitated online, the achieved reach is potentially very large. Social 
media and online word-of-mouth can further enhance the reach of the awareness 
(Gerber and Hui, 2013; De Buysere et al., 2012). Public interest also allows entrepre-
neurs to get feedback on their ideas (Manchanda and Muralidharan, 2014; De Buysere 
et al., 2012), which in turn can se used in product development. 
Another major motivation behind crowdfunding initiatives is to find validation for the 
project from the crowd (
Belleflamme et al., 2013; 
Gerber and Hui, 2013; Manchanda 
and Muralidharan, 2014; De Buysere et al., 2012; Valanciene and Jegeleviciute, 

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