Success Factors in Reward based and Equity based Crowdfunding in Finland

Master’s Thesis 
20 
friend and other wanting to support a cause. Another typical motivation is to connect 
with people in their social networks and to engage in a community. (
Gerber and Hui, 
2013) These reasons provide internal satisfaction from supporting a cause, and exter-
nal recognition from having a community that is aware of the donation. 
As mentioned before, this division into three reward types - financial, material and 
social – is at times too generalized. A decision to fund a project is often due to a mix-
ture of several different motivations. Part of the motivation to contribute to a project 
may come from financial rewards and part from non-monetary wishes to support an 
idea (
Belleflamme et al., 2015). Motivations may be based on wanting to support a 
cause, yet wanting a personal connection in the form of updates from and meetings 
with the creator (Wheat et al., 2013). It may be difficult to discern which motivations 
drive which funders or which motivations are the major drivers. According to 
Frydrych et al. (2014) social and psychological factors may be equally or more im-
portant for funders than financial rewards. Clearly there is heterogeneity in the moti-
vations of a single funders as well as the in the motivations of funders as a group.
To summarize, motivations funders have for participating in crowdfunding are heter-
ogeneous (Mollick, 2014). Motivations can include financial gain as compensation for 
contributions, for example in the form of equity shares, profit sharing or loans (
De 
Buysere et al., 2012, Giudici et al., 2013). Instead of monetary, the compensation re-
ceived for funding a project can be material in nature. Funders can be given the prod-
uct or service the project is developing as compensation for their contributions, or be 
allowed to be involved in the development process in different ways, as a form of 
reward (
Mollick, 2014).
In addition to monetary or material rewards, motivations can 
be based more in the internal and external joy of contributing to a project or cause, 
without expectation of compensation 
(
Giudici et al., 2013). 
Internal joy refers to the 
internal satisfaction that comes from giving, whereas external motives are related to 
the prestige received from having others be aware of the contribution (Harbaugh, 
1998). Reasons for funders to contribute to crowdfunding are often composed of sev-
eral different motivations 
(
Belleflamme et al., 2015), which adds to the heterogeneity 
of funder motivations.