Success Factors in Reward based and Equity based Crowdfunding in Finland

Master’s Thesis 
18 
Entrepreneurs gravitate towards crowdfunding due to the ease of it. Creating a crowd-
funding initiative costs entrepreneurs nothing, except for possible compensation given 
in return for funds (Manchanda and Muralidharan, 2014) and the marketing efforts put 
into the campaign. Crowdfunding also affords entrepreneurs creative and strategic 
freedom, since they are not accountable to funders in the same way as they would be 
to traditional investors (Gleasure, 2015). This means entrepreneurs are not expected to 
act according to an external party’s expectations, instead are given the freedom to be 
self-governing. 
To summarize, entrepreneurs participate in crowdfunding for various reasons (Gleas-
ure, 2015). Obtaining capital for their idea is a unifying motivation amongst entrepre-
neurs (
Mollick, 2014; 
De Buysere et al., 2012; Gerber and Hui, 2013; Manchanda and 
Muralidharan, 2014; Lasrado and Lugmayr, 2013;
Wheat et al., 2013)
, but other rea-
sons to participate also exist. Entrepreneurs partake in crowdfunding in order to pre-
sent their ideas to the public 
(Belleflamme et al., 2013) 
and find validation for the 
ideas (
Belleflamme et al., 2013; 
Gerber and Hui, 2013; Manchanda and Muralidharan, 
2014; De Buysere et al., 2012; Valanciene and Jegeleviciute, 2013). Additionally, 
entrepreneurs look to build relationships with other participants 
(
Gerber and Hui, 
2013) and gain strategic freedom to be self-governing (Gleasure, 2015). Crowdfund-
ing can also demonstrate demand and validate the business venture, which might lead 
to further funding from traditional sources 
(Mollick, 2014)
. 
3.2. Motivations of Funders 
The funders of crowdfunding initiatives are people of the general public, who have 
one commonality – they all decided to finance a particular project. Due to the differ-
ences between funders, their motivations for funding are extremely heterogeneous 
(Mollick, 2014). Despite the heterogeneity, common motivations can be found.
Generally funders expect some type of reward for their contribution (Wheat et al., 
2013; 
Gerber and Hui, 2013
). These rewards can be divided into three rough catego-
ries. There are financial rewards, material rewards and social rewards that funders can 
gain from contributing (
De Buysere et al., 2012)
. 

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