Success Factors in Reward based and Equity based Crowdfunding in Finland

 

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Master’s Thesis 
80 
11. Conclusions 
Crowdfunding has become an increasingly popular financial alternative for entrepre-
neurs 
(
Belleflamme et al., 2015). Crowdfunding is still evolving as a concept (Lar-
ralde and Schwienbacher, 2010) and the academic literature regarding it is limited 
(
Estellés-Aroles and Gonzáles-Ladrón-de-Guevara, 2012; Giudici et al., 2013).
Research has been done on the participation motivations of both entrepreneurs and 
funders – and motivations for both groups have been found to be heterogeneous and 
numerous (Gleasure, 2015, Mollick, 2014). Motivations for entrepreneurs include 
obtaining funding 
(
Manchanda and Muralidharan, 2014; 
Frydrych et al., 2014)
, find-
ing validation 
(Belleflamme et al., 2013; 
Gerber and Hui, 2013) and verifying demand 
for their idea (
Mollick, 2014)
. As for funders, motivations vary from looking for fi-
nancial gain (De Buysere et al., 2012) to wanting to support a cause 
(Wheat et al., 
2013)
. Research divides crowdfunding into four different models based on the com-
pensation funders receive for their contributions: donation, reward, loan and equity 
based crowdfunding. Funders receive social and material rewards as well as loan and 
equity based financial returns for their contribution respectively. (Mollick, 2014) 
Earlier research has also been done on the factors that affect the success of crowd-
funding projects. Several aspects such as project type 
(Belleflamme et al., 2013)
and 
duration 
(Frydrych et al., 2014), as well as entrepreneur background and social net-
works (Frydrych et al., 2014; Agrawal et al., 2015), have been found to have an im-
pact on the success of a crowdfunding initiative.
T
his thesis set out to find which aspects affect the success of reward and equity based 
crowdfunding projects in Finland. The results of the study indicate that the type of 
project seems to have an impact on its crowdfunding success. Certain industries, such 
as art performing arts and restaurant businesses seem to be more easily funded than 
some other industries. The results also indicated that shorter project durations were 
optimal, in order to not lose momentum. Though entrepreneur background did not 
seem to have as much of an impact than previously believed, entrepreneurs’ social 
networks were important to the success of the project.