Success Factors in Reward based and Equity based Crowdfunding in Finland

Master’s Thesis 
39 
based crowdfunding is not practical for most entrepreneurs in Finland. It is only ap-
plicable for non-profit organization under the Finnish fundraising law. Reward-based 
crowdfunding must also be carefully managed. The rewards for funding the initiative 
must be sold under consumer law, with value-added tax and fixed prices. (Lasrado 
and Lugmayr, 2013) Investment-based crowdfunding projects are very regulated in 
Finland. The selling of bonds or equity must be facilitated via authorized platforms. 
However, peer-to-peer lending currently falls outside the regulatory scope. Overall, 
Finland does not have a specifically made regulatory regime for crowdfunding, in-
stead is waiting on the European Commission’s legal initiative. For now, policies 
guide the market towards self-regulation. (Gajda, 2014) 
For initiatives working within these constraints success factors are similar to those 
globally. Success depends on project quality, social networking capabilities and mar-
keting reach of the entrepreneur and the crowdfunding platform (Lasrado and Lug-
mayr, 2013). 
Since crowdfunding is an emerging practice in Finland as has yet to have been studied 
at length, the author believes it to be important to further research the topic in a Finn-
ish environment. Additionally, there has not been much research on the influence a 
chosen crowdfunding model to the importance of success factors. This is why the au-
thor has decided to research which of the afore mentioned success factors are im-
portant in crowdfunding in Finland. 
 

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Master’s Thesis 
40 
8. Methodology and Data Collection Methods 
8.1 Theoretical Perspective and Methodology 
In this thesis the author takes a constructivist worldview. Constructivism views truth 
and meaning as being not independent of interaction, instead created within the inter-
actions people have with the world (Morgan and 
Smircich
, 1980; Guba and Lincoln, 
1994; Mir and Watson, 2000; Gray, 2013). This perspective allows subjects to con-
struct their own meaning in different ways, even in relation to the same phenomenon 
(Mir and Watson, 2000; Gray, 2013). Since the topic of crowdfunding is based on the 
interaction between creators and funders, the author believes constructivism to be a 
well-suited perspective. 
Since crowdfunding success is closely linked with factors that are not easily quantifi-
able, the author views individual experiences and opinions as an important resource in 
studying the topic. Thus, the author uses interpretivism as her theoretical perspective. 
Interpretivism views the world as a construct formed by human actors (Walsham, 
1995). It deals with the actions of the individual and focuses on qualitative aspects 
(Gray, 2013). 
The author uses phenomenological research in order to find the opinions and subjec-
tive accounts of the participants. By using quite unstructured research methods, the 
author hopes to uncover factors that were possibly not in the original focus. (Gray, 
2013)