Success Factors in Reward based and Equity based Crowdfunding in Finland

Master’s Thesis 
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the financial and governance reports provided by entrepreneurs. Consequently, busi-
nesses that provide neither financial forecasts nor disclaimers are less likely to attract 
investors. Their initiatives tend to have longer durations and raise less funding overall. 
In equity crowdfunding, businesses that signal an intention to seek exit through an 
initial public offering or a trade sale are more prone to attract investors compared to 
ones planning to use a different form of exit. (Ahlers et al., 2015) 
Not all businesses are prepared to reveal such information to potential funders. Ac-
cording to 
Gleasure (2015), fear of disclosure is a prominent reason for entrepreneurs 
to not seek crowdfunding. This applies especially for ventures dealing in business-to-
consumer markets, due to the importance of first mover advantage. They fear reveal-
ing business plans and other key information may invite imitators, and resulting in 
them losing their competitive advantage.
However, not all signaling is done through financial documents. Narrative is an inte-
gral part of creating legitimacy for and interest in an initiative. Stories help construct 
new ventures, acquire funding and generate wealth. Stories legitimate entrepreneurs in 
the eyes of the crowd and competitors, and this legitimization enables capital acquisi-
tion. (Lounsbury and Glynn, 2001) 
5.6. Geography 
Through globalization our world and networks have become increasingly international 
and independent of geographical location. Entrepreneurs are able to find funding 
globally and funders are able to find funding opportunities from all over the world. 
With the rise of the Internet and easily accessible online funding platforms, geograph-
ical locations no longer proves a barrier for crowdfunding (Agrawal et al., 2015). 
Thus, crowdfunding can facilitate funding acquisition that is independent of geogra-
phy (Frydrych et al., 2014). Also, 
Giudici et al. (2013) state that the geographic area 
itself does not have an effect of crowdfunding decisions – meaning initiatives in a 
particular area do not benefit from potential goodwill associated with the region. 
Despite this, geography seems to be linked to the nature and the success rate of 
crowdfunding initiatives (Mollick, 2014). This is due to social relationships and cul-
tural differences that are not eliminated by online tools. Crowdfunding platforms 

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