Reward-based Crowdfunding. Influence of Virtuous and Entrepreneurial Orientation Rhetoric on Campaign Performance

Table of contents

List of figures

List of tables

List of abbreviations

Table of appendices

Abstract

1 Introduction

2 Theory development and hypotheses
2.1 Crowdfundingoverview
2.2 Virtuous and entrepreneurial orientation rhetoric
2.3 Social role theory
2.4 Social role theory, VO and EO rhetoric, and reward-based crowdfunding
2.4.1 VO and EO rhetoric, and reward-based crowdfunding
2.4.2 Sex, VO and EO rhetoric, and reward-based crowdfunding
2.4.3 Race, VO and EO rhetoric, and reward-based crowdfunding
2.4.4 Attractiveness, VO and EO rhetoric, and reward-based crowdfunding
2.4.5 Age, VO and EO rhetoric, and reward-based crowdfunding

3 Methodology
3.1 Sample and data collection
3.1 Dependent variables
3.2 Independent variables
3.4 Control variables
3.5 Moderating variables
3.6 Statistical analysis

4 Results
4.1 Main analysis
4.2 Robustness checks
4.3 Interaction of multiple demographic characteristics

5 Discussion
5.1 Limitations and future research

6 Conclusion

Appendices

References

List of figure

Figure 1. Moderating effects of sex and attractiveness on VO and EO rhetoric for funds raised.

Figure 2. Three-way interaction effects of sex, race, and VO and EO for funds raised (influence of sex within groups of same race)

Figure 3. Three-way interaction effects of sex, race, and VO and EO for funds raised (influence of race within groups of same sex)

Figure 4. Three-way interaction effects of sex, race, and VO and EO for success (influence of sex within groups of same race)

Figure 5. Three-way interaction effects of sex, race, and VO and EO for success (influence of race within groups of same sex)

List of tables

Table 1. Descriptive statistics

Table 2. Correlations

Table 3. Multilevel funds raised model results

Table 4. Multilevel success model results

Table 5. Summary ofhypothesis tests: main analysis and robustness checks

List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

Table of appendices

Appendix A. Dictionaries for virtuous orientation dimensions

Appendix B. Dictionaries for entrepreneurial orientation dimension

Appendix C. Robustness check: single level funds raised model

Appendix D. Robustness check: single level success model

Appendix E. Robustness check: 95% confidence cutoff multilevel funds raised model

Appendix F. Robustness check: 95% confidence cutoff multilevel success model

Appendix G. Three-way interaction effects for multilevel funds raised model

Appendix H. Three-way interaction effects for multilevel success model

Abstract

Crowdfunding is on course to become the leading source of capital for new venture financing, which is one of the most challenging tasks entrepreneurs have to face. Notwithstanding considerable progress, our understanding of its underlying processes remains inadequate. In this paper I extend academic literature on reward-based crowdfunding and examine the influence of entrepreneurial rhetoric on campaign performance through the lens of the social role theory. I explore how altruistic values shared by its participants redefine the social role of an entrepreneur. I demonstrate how this peculiarity can be exploited in favor of various disadvantaged demographic groups through an appropriate use of the language reflective of virtuous and entrepreneurial orientations. Despite their apparent importance, these two types of rhetoric have been largely neglected by scholars studying online funding platforms. Based on my quantitative analysis of 8,459 Kickstarter campaigns using a multilevel regression technique, I discover that virtuous orientation has a positive and entrepreneurial orientation negative effect on reward-based crowdfunding performance. Furthermore, in line with the social role theory, Caucasian women and racial minority men benefit greater than white males from the use of virtuous rhetoric and get punished more for using entrepreneurial rhetoric. However, to my surprise, these effects are reversed for racial minority females, who appear to be rewarded for violating the behavior associated with their sex and race. Overall, my findings confirm that rhetoric is an important tool at entrepreneurs’ disposal, and they can improve their chances of success in reward-based crowdfunding by using it appropriately and in accordance with their social role.

1 Introduction

Crowdfunding is a recent global phenomenon that is often viewed by scholars as an attempt to democratize entrepreneurs’ access to capital (Anglin, Short, et al., 2018; Greenberg & Mollick, 2016; Marom, Robb, & Sade, 2014; Mollick & Kuppuswamy, 2016). It allows individuals to finance their ventures by leveraging internet technologies and social networks. It has been estimated that over USD 34 billion was raised through crowdfunding in 2015, compared to only about half a billion USD in 2009 (Massolution, 2015) and World Bank reports that this value will reach USD 300 billion by 2025 (Davis, Hmieleski, Webb, & Coombs, 2017). This new capital acquisition tool is one of the fastest growing financial innovations on record (Rau, 2019), with triple digit growth rates for both the number of platforms and the volume of funding they generate (Davis et al., 2017; EquityNet, 2014). It is also expected that crowdfunding will replace venture capital as the leading source of startup financing in the near future (Anglin, Short, et al., 2018). Not only has this method of capital acquisition become popular among entrepreneurs, but its novelty, distinctiveness and rapid growth have also sparked interest of a growing number of scholars.

Entrepreneurial finance has been a prominent research topic in academia, as it touches upon one of the most important and challenging tasks that entrepreneurs have to face, that is resource acquisition (Martens, Jennings, & Jennings, 2007). However, prior to the 2008 Global Financial Crisis (GFC), scholars largely focused their attention on the traditional financial vehicles such as equity funding (Becker-Blease & Sohl, 2007), institutional capital (Bigelow, Lundmark, Parks, & Wuebker, 2011), bank financing (Büttner & Rosen, 1988; Eddleston, Ladge, Mitteness, & Balachandra, 2014; Fay & Williams, 1993), venture capital financing (Canning, Haque, & Wang, 2012) and business angels (Parhankangas & Ehrlich, 2014), to name a few. However, after the 2008 market crash a new type of funding platforms, which are commonly referred to as crowdfunding, had gained the momentum online. It combines elements of microfinance and crowdsourcing, which makes it unique to traditional finance (Mollick, 2014). For example, as opposed to its conventional counterparts, crowdfunding relies on a large number of geographically distributed amateur investors with moderate wealth (Bogost, 2012; Li, Chen, Kotha, & Fisher, 2017; Mollick, 2014), who invest online and often out of altruistic motivations (Allison, Davis, Short, & Webb, 2014; Allison, McKenny, & Short, 2013;M. Johnson, Stevenson, & Letwin, 2018; McKenny, Allison, Ketchen, Short, & Ireland, 2017).

Given these unique characteristics, a new theoretical foundation was deemed necessary, as scholars believed that performance drivers and underlying mechanisms would exhibit a certain degree of divergence between traditional and alternative finance (Anglin & Short, 2019; Short, Ketchen, McKenny, Allison, & Ireland, 2017; Skirnevskiy, Bendig, & Brettel, 2017). As a result, the research on this topic has grown at a rapid clip with a number of papers initially focusing on the factors contributing to crowdfunding success, such as campaign rhetoric (Bogost, 2012; Ciuchta, Letwin, Stevenson, & McMahon, 2016; Courtney, Dutta, & Li, 2016; Davis et al., 2017; Li et al., 2017; Mollick, 2014; Steinberg & DeMaria, 2012). It has been demonstrated that an effective entrepreneurial pitch is an essential element of a successful capital acquisition process (Balachandra, Briggs, & Eddleston, 2017). In crowdfunding the pitch is normally delivered through the means of a text description. As a result, a number of scholars turned their attention to the rhetoric used by founders in their written campaign narratives (e.g. Allison et al., 2013; Anglin, Short, et al., 2018; Anglin, Wolfe, Short, McKenny, & Pidduck, 2018). Despite the proliferation of this topic in crowdfunding research, there has been little attention given to the virtuous (i.e., “pro-social”) orientation (VO) and entrepreneurial (i.e., “profit-seeking”) orientation (EO) rhetoric. They both have been extensively studied in other areas of entrepreneurial finance and been found to influence funding outcomes (e.g. McLeod, Moore, Payne, Sexton, & Evert, 2018; Payne, Brigham, Broberg, Moss, & Short, 2011; Putnins & Sauka, 2019; Vaznyte & Andries, 2019). Thus, according to Watson, Dada, Wright, and Perrigot (2017, p. 753), “EO is considered to be a key ingredient for firm success” and is linked to competitiveness, innovativeness and proactiveness. These characteristics are indicative of a company’s ability to generate profits and, hence, help attract traditional capital providers who tend to value this quality. However, given the growing pressure from society on companies to act in socially responsible ways, more and more companies resort to VO in order to differentiate themselves and create a positive corporate image. This tends to increase the satisfaction of all stakeholders, notjust that of investors (Chun, 2017). It is linked to qualities such as empathy, warmth and integrity which are particularly appealing to more altruistically motivated capital providers on alternative platforms. Despite their apparent importance for a firm’s strategic market positioning (Moss, Neubaum, & Meyskens, 2014), neither VO nor EO have been meaningfully studied in crowdfunding literature. I was able to find only one paper by Moss et al. (2014) that specifically examines the effects of VO and EO rhetoric on the campaign performance within the context of a microlending website Kiva.org. Furthermore, crowdfunding is not a homogeneous concept and generalization of these results is not feasible across various platforms due to their inherent differences (Anglin & Short, 2019; Anglin, Short, et al., 2018). Indeed, in their paper, Anglin and Short (2019) replicated the same study but using campaign data from the reward-based crowdfunding (RBCF) website Kickstarter.com and found contrasting results.

Not only do the values held by capital providers and, hence, the effects of VO and EO on performance appear to show divergence in traditional and online settings, but there have also been signs indicating that the negative biases against certain social groups common in traditional finance may be at least partially alleviated or even reversed in crowdfunding. For example, women have often faced challenges in raising capital through conventional channels (Büttner & Rosen, 1988; Eddleston et al., 2014; Guzman & Kacperczyk, 2019), but in alternative finance they tend to perform better than men (Greenberg & Mollick, 2016; M. Johnson et al., 2018; Marom et al., 2014). However, other social groups, such as racial minorities, still seem to be at a disadvantage (Anglin, Wolfe, et al., 2018; Pope & Sydnor, 2008; Ravina, 2008). Other demographic characteristics, such as attractiveness and age, have also been found to influence outcomes in a wide range of contexts and play an important role in obtaining access to resources (e.g. Anglin, Wolfe, et al., 2018; S. Johnson, Sitzmann, & Nguyen, 2014; Zhao, O'Connor, Wu, & Lumpkin, 2020). However, within the specific context of RBCF, the influence of these characteristics, including sex and race, remains relatively less explored than in other more established areas of entrepreneurial finance. Furthermore, their interaction with other factors affecting performance, such as VO and EO rhetoric, is even less understood. This brings us to the two-fold research question of my paper: 1) How do VO and EO rhetoric of a campaign narrative influence its performance in reward-based crowdfunding? and 2) How is the influence of VO andEO rhetoric on reward-based crowdfunding performance moderated by one’s sex, race, attractiveness and age. Not only is this question intriguing for academia as answering it extends existing theories to the new context, creates avenues for future research and brings us a step closer to understanding how democratization of finance can help make entrepreneurship more inclusive, but it is also very important for practitioners. Thus, given that securing access to capital is often a major challenge for entrepreneurial ventures (Eddleston et al., 2014), understanding how to effectively use available tools, such as VO and EO rhetoric properly aligned with one’s social role, can help to ease this strain. This is particularly crucial for those social groups, who have been often left behind in traditional finance.

In order to answer my research question, I use a sample of 8,459 campaigns that were created between 2013-2018 on the world’s most prominent reward-based crowdfunding website Kickstarter.com (Anglin, Short, et al., 2018). I first examine the effects ofVO and EO on RBCF performance by utilizing computer-aided text analysis (CATA) software, which is a common approach and is widely used in crowdfunding research on similar topics (e.g. Anglin, Wolfe, et al., 2018; Moss et al., 2014; Parhankangas & Renko, 2017). I operationalize VO and EO as unidimensional constructs using two dictionaries that were empirically derived and validated by Payne et al. (2011) and Short, Broberg, Cogliser, and Brigham (2010) respectively. I hypothesize that given evidence of pro-social values held by stakeholders in RBCF (Allison et al., 2014; Calic & Mosakowski, 2016), VO will have a positive and EO - a negative effect on reward-based crowdfunding performance. I then draw on the social role theory (Eagly, 1987), in order to answer the second part of my question. This theory claims that individuals are explicitly (e.g., through a job hierarchy) or implicitly (e.g., through observable characteristics such as ethnicity) assigned to social roles, which come with certain expected norms of behavior and stereotypes, including the language they should use (Parhankangas & Renko, 2017). One can simultaneously assume multiple roles that can conflict with each other (e.g., entrepreneur and female). Moreover, even if that individual tries to downplay the characteristics of a role associated with negative stereotypes, they can still get sanctioned for deviating from their expected behavior. This often happens to women who try to act more masculine in order to fit into the role of an entrepreneur (Anglin, Wolfe, et al., 2018; Rudman, 2012). Therefore, I argue that because VO is better aligned with the social role of a female, racial minority, attractive and older person and vice versa for EO, such individuals would benefit greater from using the former and be punished more for using the latter in their campaign narratives than their counterparts. To test my hypotheses, I use a multilevel generalized linear model (GLM) for the continuous^h«^ raised and a multilevel logistic regression for the dichotomous success dependent variables. The results of my study indicate that there appears to be a positive effect of VO and a negative effect of EO on RBCF performance, which is in line with my expectations. However, to my surprise, entrepreneurs were rewarded for using a language that was in conflict with their roles based on their demographic characteristics (e.g., women and attractive people using rhetoric high in EO). These results, nevertheless, are not unique as authors of other papers came across situations when individuals were not punished and even were rewarded for violating their social roles (e.g. Balachandra et al., 2017; Schneider, Tinsley, Cheldelin, & Amanatullah, 2010). Other scholars, however, pointed out that the interaction between rhetoric and one’s observable characteristics may be more complex. To explore this possibility, I perform a three-way interaction analysis and find statistically significant results that are in line with the social role theory for all combinations of VO and EO with sex and race, with a notable exception of racial minority females. This may be indicative of their vulnerable position due to their low level of perceived credibility and legitimacy, which can be boosted by using entrepreneurial orientation rhetoric in their campaign descriptions (Anglin, Wolfe, et al., 2018; Balachandra et al., 2017; Eddleston et al., 2014)

I extend the ongoing academic conversation in three ways. First, my study adds to the growing literature on reward-based crowdfunding, which has become the most prominent type of online funding platforms (Mollick, 2014). It deepens our understanding of RBCF’s unique underlying mechanisms and demonstrates that, for the most part, virtuous positioning of a venture may help make it more attractive to funders, whereas entrepreneurial positioning tends to have an opposite effect. Secondly, I make a contribution to the literature on entrepreneurial rhetoric. I demonstrate that rhetoric embedded in campaign text descriptions is an important tool at founders’ disposal for increasing their chances of success. Furthermore, I improve generalizability of the VO and EO dictionaries by extending them to a new context using computer-aided text analysis tools. To the best of my knowledge, this is the first paper to examine the effects of VO and EO as unidimensional constructs specifically in reward-based crowdfunding. Finally, my work adds to the academic literature on the social role theory. I find further evidence of the evolving role of an entrepreneur who is expected to act in a more holistic manner, at least online. This plays in favor of some of the disadvantaged demographic groups, such as females. This pro-social shift in values reduces role conflict and even plays in women’s favor, which is reflected in their superior performance compared to men. Unfortunately, stereotypes associated with being a racial minority appear to be still incompatible with their entrepreneurial roles. Furthermore, I demonstrate that an individual’s chances of success in RBCF can be increased by an appropriate use of virtuous and entrepreneurial orientation rhetoric in accordance with their social role.

2 Theory development and hypotheses

2.1 Crowdfunding overview

Securing access to capital is considered to be one of the most important and challenging entrepreneurial tasks (Balachandra et al., 2017; Mollick, 2014). First prototypes of lending, the most established and well-known form of financing, can be traced back to ancient Assyria, India and Sumeria as early as 3000-2000 BC (Davies & Davies, 1996). Throughout history, a whole range of new financial vehicles catering to entrepreneurial needs have been developed, including private equity, venture capital, business angels and various banking products, to name a few (Davis et al., 2017; Rau, 2019). These traditional financing tools are similar in a way that they represent centralized (e.g., in terms of a geographic location as well as the number of capital providers) systems, in which funding decisions are made by a relatively small group of highly experienced wealthy professionals who normally seek a return on their investment (Greenberg & Mollick, 2014; Rau, 2019; Wilson & Testoni, 2014). Thus, funding applications undergo a very stringent vetting, selection and due diligence process during which investors normally interact with entrepreneurs face-to-face in a formalized manner in order to evaluate the potential and creditworthiness of their undertaking (Vaznyte & Andries, 2019). However, research indicates that not everyone has equal access to capital in traditional finance and those who do not fit the image of a successful entrepreneur, such as women and racial minorities, are often at a disadvantage (Büttner & Rosen, 1988; Pope & Sydnor, 2008). Fortunately, findings from recent studies indicate that these discriminative tendencies can be, at least, partially alleviated or even reversed by the new form of financing that is commonly referred to as crowdfunding. On these online platforms, providers of capital appear to be driven by different motivations and respond to different stimuli as compared to their traditional counterparts (e.g. Allison et al., 2014; Anglin, Short, et al., 2018; Calic & Mosakowski, 2016; Greenberg & Mollick, 2016; M. Johnson et al., 2018).

Crowdfunding is a relatively new method of raising capital, which emerged as an alternative to traditional finance at the turn of the 21st century (Massolution, 2015). The proliferation of internet technologies, a trend towards democratization of institutions and the 2008 Great Financial Crisis served as catalysts for its growth and adoption (Massolution, 2015). These online funding platforms started to gain traction as a response to the 2008 market crash, which curbed financing activities making it very difficult for entrepreneurs to raise capital through traditional channels (Massolution, 2015). Crowdfunding is an evolving phenomenon, which can take different forms and shapes, but in its essence it represents “the efforts by entrepreneurial individuals and groups - cultural, social, and for-profit - to fund their ventures by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries” (Mollick, 2014, p. 2). Thus, in contrast to their traditional counterparts, these alternative platforms are powered by a large number of geographically distributed amateur funders with moderate wealth who do not necessarily seek to turn a profit but rather to support a certain entrepreneurial undertaking (Rau, 2019; Wilson & Testoni, 2014). They normally have limited, if any, legal recourse and make their contribution decisions based just on the information provided on a project’s campaign page, such as text description or photographs (Rau, 2019; Wilson & Testoni, 2014). Since virtually anyone can create a crowdfunding campaign, backers are often exposed to a very large number of potential candidates but have very limited knowledge about them. As a result, during the decision making process, capital providers on online platforms are even more likely to resort to heuristics than professional investors, who tend to be more experienced and better prepared to evaluate a given business opportunity more fairly, although not completely without biases (Anglin, Wolfe, et al., 2018; Komarova & Gonzalez, 2015). These heuristics can be based on objective factors such as one’s credit score and successful entrepreneurial track record or subjective factors, such as one’s sex, race, attractiveness and age (Komarova & Gonzalez, 2015). Stereotypes connected to these observable characteristics often play against certain social groups in traditional finance. However, there has been evidence that some of these biases are reversed and have a positive effect in crowdfunding for certain demographic categories e.g., for women (M. Johnson et al., 2018; Mollick & Kuppuswamy, 2016). Some scholars suggest that this anomaly is due to the holistic approach and altruistic values that lie at the core of crowdfunding (Allison et al., 2014; Allison et al., 2013). Thus, this new form of financing is particularly suited for meeting the needs of an emerging type of entrepreneurs who are more socially and communally oriented (Calic & Mosakowski, 2016; Parhankangas & Renko, 2017). They, at least to some extent, try to generate value for society as a whole rather than simply chase profits. This, in turn, tends to attract a new type of capital providers who may have a different expectation of what a successful entrepreneur should be and hence, respond to traditional stimuli differently (Allison et al., 2013; M. Johnson et al., 2018). However, the findings, so far, have been mixed. For example, Moss et al. (2014) found that VO rhetoric has a largely negative and EO has a largely positive effect on microlending performance on Kiva.org, whereas Anglin and Short (2019) discovered opposing results for RBCF performance on Kickstarter.com. Furthermore, some scholars found evidence that women perform better than men in crowdfunding (e.g. Greenberg & Mollick, 2016; M. Johnson et al., 2018; Pope & Sydnor, 2008), whereas other traditionally disadvantaged groups, such as racial minorities, still appear to face challenges (M. Johnson et al., 2018; Ravina, 2008). These contrasting findings suggest that our understanding of the mechanisms driving crowdfunding performance remains inadequate and further investigation is required.

Crowdfunding is a broad and heterogenous concept, which, according to Mollick (2014) can be categorized into four groups based on goals of funders: patronage, lending, reward-based and equity-based. The patronage model refers to donation-based crowdfunding where capital providers act as philanthropists and do not expect anything back. A lending model is at the heart of peer-to-peer lending platforms, such as Kiva.org or Prosper.com, where lenders normally expect at least the return of their principal. Even though these lenders act as “mini-banks”, their motivations also clearly include elements of altruism. For example, they often face significant default risks by lending to borrowers in impoverished communities and receiving little or no reward in return (Allison et al., 2013). The third category, reward-based crowdfunding platforms such as Kickstarter.com, is currently the most prominent and prevalent model (Mollick, 2014) and is the focus of this paper. It normally operates on an all-or-nothing basis, where founders set a monetary campaign goal and they can only collect the pledged funds if that target has been reached. Reward-based crowdfunding is unique in a way that, unlike on other platforms, its capital providers are also often the customers (Anglin, Wolfe, et al., 2018; Calic & Mosakowski, 2016). They normally have an option to either make a small donation (similar to the patronage model) or contribute by pre-purchasing an entrepreneur’s product i.e., a ‘reward’, which is to be delivered in the future. Therefore, RBCF also combines elements of altruistic and opportunistic motivations on behalf of funders. The last model, equity-based crowdfunding, is the closest to traditional financing platforms among the four, in a way that backers get a stake or a similar token in the funded company and their decisions are more influenced by the potential return on their investment. This model remains highly regulated and less commonly adopted than the other three (Heminway & Hoffman, 2012), representing less than 5% of the total market (Massolution, 2012). To sum up, crowdfunding, by and large, exhibits somewhat different dynamics from traditional finance due to its greater inherent focus on altruistic motivations.

2.2 Virtuous and entrepreneurial orientation rhetoric

A well-crafted entrepreneurial pitch is one of the most important elements of a successful fundraising campaign (Balachandra et al., 2017; Moss et al., 2014). In traditional finance, the pitch normally takes place offline, face-to-face with potential investors or lenders. It is delivered verbally and usually with some optional media aids. In crowdfunding, on the other hand, a founder would normally pitch their business concept online without direct interaction with funders (Anglin, Short, et al., 2018; M. Johnson et al., 2018; Wilson & Testoni, 2014). They normally do it through the means of a text description, which can also be accompanied by some optional media artifacts such as pictures and videos. Research indicates that the language used for shaping the business narrative of an entrepreneurial pitch has an important effect on capital acquisitions outcomes (Allison et al., 2013; Anglin & Short, 2019; Anglin, Short, et al., 2018; Anglin, Wolfe, et al., 2018; Moss et al., 2014; Parhankangas & Renko, 2017). For example, Anglin, Wolfe, et al. (2018) investigated the effects of the narcissistic rhetoric and discovered an inverted-U relationship with crowdfunding outcomes on Kickstarter.com, which, in general, implies positive effects at moderate levels of such rhetoric. Anglin, Short, et al. (2018) turned their attention to positive psychological capital language, consisting of four dimensions: hope, optimism, resilience and confidence. They found a positive influence of this language on crowdfunding performance on the same website. Finally, in the paper by Allison et al. (2013), the authors examined the warm-glow effect of a rhetoric in microlending on Kiva.org in improvised countries. They discovered that entrepreneurial narratives higher in blame and urgency language get funded faster than those higher in accomplishment, tenacity and variety language.

As can be seen, the importance of the rhetoric embedded in an entrepreneurial pitch sparked great interest among scholars, which is reflected in the breadth of topics studied. Virtuous and entrepreneurial orientations are other types of rhetoric that capital seekers can employ in their narratives to win funders over. According to Moss et al. (2014), VO is associated with ethical and virtuous positioning of an enterprise that can help it gain investors’ trust and faith. EO, on the other hand, is associated with competitiveness and result-driven performance, which can help boost investors’ confidence in a company’s ability to generate profits and remain creditworthy. Both virtuous and entrepreneurial orientations are prominent topics in academic literature and there are various approaches scholars can undertake when working with these two concepts (Chun, 2017; Putnins & Sauka, 2019). First, researchers have identified several subcategories of both VO and EO, which, therefore, can be studied either as unidimensional (e.g. Covin & Slevin, 1989) or multidimensional constructs (e.g. Lumpkin & Dess, 1996). Both are valid approaches but according to Kreiser, Marino, Kuratko, and Weaver (2013), the former is particularly suitable for assessing a construct’s effect on performance, whereas the latter is more useful for getting to the bottom of what drives the construct- performance relationship. Therefore, given the formulation of my research question as “How...”, I employ the high-level approach as it serves the purpose arguably better. Secondly, both virtuous and entrepreneurial orientations can be studied either on an individual or firm level. Given VO’s origin in human traits, it is a relatively newer concept to be applied to organizations. However, its importance continues to grow rapidly because of the increasing pressure on companies to act in socially responsible ways (Chun, 2017). EO, on the other hand, has been more widely studied on an organizational level, as its dimensions, such as innovativeness, are better suited to describe firms (Watson et al., 2017). In this paper I follow suit and examine both VO and EO as firm-level constructs. The dictionaries that I use to operationalize these two types of rhetoric have also been empirically derived and validated in organizational contexts. Many scholars have explored the effects of these two types of rhetoric on funding outcomes in various areas of entrepreneurial finance (e.g. Lumpkin & Dess, 1996; Moss et al., 2014; Putnins & Sauka, 2019; Vaznyte & Andries, 2019). However, virtually no such research exists specifically in the context of reward-based crowdfunding (Anglin & Short, 2019). This white spot is particularly surprising because VO and EO are the “yin” and “yang” that entrepreneurs need to artfully balance for the right positioning of their business in order to appeal to different types of capital providers (Chun, 2017; Moss et al., 2014; Vaznyte & Andries, 2019). Understanding the effects of these two types of rhetoric is especially important when shifting from traditional finance to the crowdfunding context because of the inherent differences of these two types of funding channels. For example, in the former case, profit maximization motives of lenders tend to be stronger and EO may be more appealing. However, in the latter case, altruistic motives often play a more prominent role and VO may prove more effective (Allison et al., 2014).

Virtues were originally studied within the framework of Aristotle’s human character traits, such as courage, temperance, liberality, magnificence, pride, good temper, friendliness, trustfulness, witness, shamejustice, honor and sincerity (Dyck & Kleysen, 2001). Chun (2005) was the first one to empirically derive and validate the six organizational virtues: conscientiousness, courage, empathy, integrity, warmth and zeal. According to the author, conscientious firms position themselves as reliable, hardworking proud and secure; courageous - as ambitious, achievement-oriented, leading and competent; empathetic - as concerned, reassuring, supportive and sympathetic; high-integrity firms - as honest, sincere, socially- responsible and trustworthy; warm - as friendly, open, pleasant and straightforward; and, finally, zealous - as exciting, innovative, imaginative and spirited. Chun (2005, p. 272) describes organizational virtues as “ethical character traits that are learned from an accumulative perception of a firm’s behaviors in everyday business life, that drives internal and external stakeholder satisfaction, and that is aligned with its ethical values used for strategic positioning”. Moss et al. (2014, p. 34) state that “virtuous organizations are seen as fair, honest, reliable, trustworthy, and committed to the support of others”. In other words, a firm with a virtuous orientation aims to increase satisfaction of all stakeholders by acting fairly, responsibly and ethically. In this paper I will use an extended definition of a VO based on the one by McLeod et al. (2018, p. 1):

Definition 1: a virtuous orientation, as an organizational-level construct, refers to the integrated set of beliefs and values adopted by a firm that support ethical and virtuous behaviors in order to maximize internal and external stakeholder satisfaction.

To come up with a working definition of an entrepreneurial orientation, I turn to the work by Lumpkin and Dess (1996). It integrates prior theory and empirical findings in the area of EO and is often used as a foundation by many papers on this topic (e.g. Moss et al., 2014; Short et al., 2010). Lumpkin and Dess (1996) use Miller (1983, p. 771's)’s definition of an entrepreneurial firm, as the one that “engages in product market innovation, undertakes somewhat risky ventures, and is first to come up with ‘proactive’ innovations, beating competitors to the punch”. According to the authors, the EO concept comes primarily from the strategic management area of research and is connected to organizational growth and success. In their paper, Lumpkin and Dess (1996) derive five dimensions of EO: autonomy, competitive aggressiveness, innovativeness, proactiveness and risk-taking. As per Moss et al. (2014) who build on this foundational work, autonomous firms act independently in order to pursue new opportunities and execute strategies; competitively aggressive - maintain a competitive position and act aggressively to defend it; innovative - use creativity and experimentation to introduce new products and processes; proactive - are able to anticipate upcoming changes and promptly adapt in order to prepare for or benefit from them; and, finally, risk-tolerant - are comfortable with a high level of uncertainty as a cost of taking high-impact but risky actions. Similar to Lumpkin and Dess (1996), Moss et al. (2014, p. 35) define an EO as “processes, practices, and decision-making style of entrepreneurial firms [that lead to entry] and reflect the mindset and methods organizations use to search and pursue opportunities for growth”. To sum up, a firm with an entrepreneurial orientation aims to maximize shareholder profits by acting opportunistically, aggressively and even selfishly e.g., as opposed to pro-socially. For the purposes of this paper, I will use an extended definition of an EO based on the one by Putnins and Sauka (2019, p.2):

Definition 2: an entrepreneurial orientation, as an organizational-level construct, reflects inclinations of firms to take calculated risks, innovate, and pursue proactive behaviors in order to beat the competition and with a purpose of maximizing shareholder profits.

2.3 Social role theory

The concept of a role is one of the most prominent topics in social sciences (Biddle, 1986; Vogel, Wester, Heesacker, & Madon, 2003). It originally emerged as an attempt to explain why representatives of the two sexes act differently in various settings. Thus, in her pioneering work, Eagly (1987) argued that such differences stem from the division of labor that can be traced to our distant ancestors. For example, men assumed the role of a hunter, protector and warrior as they were usually physically bigger and stronger than women who, on the other hand, normally took care of the household and raised children (Peterson & Hyde, 2014). As a result, by observing such differences in performed tasks throughout history, societies developed certain gender stereotypes and expectations associated with each sex. For example, males are usually expected to be masculine and viewed as agentic i.e., confident and competitive. Females, on the other hand, are expected to be feminine and viewed as communal i.e., nurturing and caring (Eagly, 1987). An important distinction needs to be made here that gender (e.g., feminine) is socially constructed, whereas sex (e.g., female) is determined by one’s surface- level physiological characteristics (Anglin, Wolfe, et al., 2018). Roles are not limited to only gender and there is almost an infinite number of them that one can take on e.g., a racial minority, LGBTQ, mother, entrepreneur etc. (e.g. Anglin, Wolfe, et al., 2018; Sluss, van Dick, & Thompson, 2011). A person’s social role has an important implication for how they are perceived and expected to behave by different groups in various contexts. This phenomenon has been extensively studied through the lens of the social role theory in numerous areas of entrepreneurial research (Anglin, Wolfe, et al., 2018; Sluss et al., 2011).

A ‘role’ is commonly defined as “a set of behavioral expectations attached to an individual's position relative to a particular social setting or social group” (Anglin, Wolfe, et al., 2018, p. 3). The social role theory is, thus, concerned with the roles that individuals take on in various societal contexts, as well as with their associated “expectations, stereotypes and allowed forms of behavior” (Anglin, Wolfe, et al., 2018, p. 3). A role can be explicitly assigned through formal hierarchies and titles e.g., that of a department manager at a company, or implicitly through observable characteristics, such as ethnicity, age or even clothes one wears (Anglin, Wolfe, et al., 2018; Sluss et al., 2011). The latter type of assignment is especially common in situations where individuals are not acquainted with each other, such as in crowdfunding (Baron, Markman, & Bollinger, 2006). It is a reaction of our brain to the unknown in an attempt to simplify the complex environment (Jenq, Pan, & Theseira, 2015). Thus, arguably, roles serve an important purpose by providing a valuable framework for how one should or should not act in various settings. As a matter of fact, without them individuals and organizations would hardly be able to function (Sluss et al., 2011). However, despite their usefulness in certain situations, role-induced behavioral expectations may impose disadvantageous stereotypes on certain groups, which are normally difficult to overcome (S. Johnson, Murphy, Zewdie, & Reichard, 2008). For example, managerial abilities of Asians are often questioned because of the racial stereotypes suggesting that they should be submissive rather than assertive (Chung & Lankau, 2005). This problem is further complicated by the fact that, normally, individuals are part of many social groups and thus, can simultaneously wear multiple hats (Anglin, Wolfe, et al., 2018; Sluss et al., 2011). This, in turn, may lead to a role conflict, when qualities and behaviors expected from one role clash with those of another (Anglin, Wolfe, et al., 2018; S. Johnson et al., 2008). For example, this often happens to female entrepreneurs who are expected to be nurturing and gentle (Biddle, 1986; S. Johnson et al., 2008) based on their gender role but “self-reliant, confident, charismatic, aggressive, risk taking, creative, or narcissistic” (Anglin, Wolfe, et al., 2018, p. 3) based on their occupational role. Furthermore, even if they try to downplay their feminine characteristics to fit the entrepreneurial role better, they may get sanctioned for violating their gender role (Anglin, Wolfe, et al., 2018; Rudman, 2012). Such conflicts may create certain challenges for individuals across a plethora of different contexts, including online funding platforms (Anglin, Wolfe, et al., 2018).

In this paper I explore how one’s role based on their demographic characteristics, such as sex, race, attractiveness and age, affects their ability to raise funds as an entrepreneur in reward-based crowdfunding. Some scholars claim that online funding platforms attract a different type of capital providers and seekers who appear to be more pro-socially oriented than their traditional counterparts (Allison et al., 2014; Calic & Mosakowski, 2016; Parhankangas & Renko, 2017). Indeed, Calic and Mosakowski (2016) argue that social entrepreneurs experience difficulty raising funds through conventional channels and crowdfunding emerged as a response to this challenge in order to cater to their needs. Therefore, the expectations held by crowdfunding participants for a role of a successful entrepreneur appear to be somewhat different from those in a traditional context. They are expected to take a holistic approach and act in ways to maximize satisfaction of all stakeholders, not just investor profits (Calic & Mosakowski, 2016). This can be advantageous for certain groups, such as women, whose social role based on their sex is better aligned with this shift in values between the offline and online settings. Expected forms of behavior as defined by one’s social role also extend to the language used by representatives of various groups (Parhankangas & Renko, 2017). Thus, I explore whether this positive bias for socially oriented entrepreneurs can be further exploited through the use of an appropriate type of rhetoric. Finally, it is worth mentioning that even though I treat both VO and EO as firm-level constructs and the social role theory is normally applied to individuals, this does not create a contradiction because an entrepreneurial firm is often considered by scholars to be an extension of the entrepreneur behind it (Gilbert, McDougall- Covin, & Audretsch, 2006).

2.4 Social role theory, VO and EO rhetoric, and reward-based crowdfunding

I now bring the three streams of entrepreneurial research together to formulate and to test hypotheses necessary to answer the research question of my paper. Thus, I first examine how virtuous and entrepreneurial orientations of a campaign rhetoric influence its RBCF performance. I then dive deeper and apply the social role theory in order to understand how a founder’s social role, assigned based on their sex, race, attractiveness and age, moderates this relationship.

2.4.1 VO and EO rhetoric, and reward-based crowdfunding

Previous research, by and large, suggests that both VO and EO rhetoric have an impact on entrepreneurial outcomes (Moss et al., 2014; Payne et al., 2011; Putnins & Sauka, 2019; Vaznyte & Andries, 2019). However, their effects vary depending on the context, in which these two constructs are applied (Anglin & Short, 2019; Putnins & Sauka, 2019). For example, according to a review of papers done by Putnins and Sauka (2019), a certain number studies found a positive significant relationship between EO and company performance, while others, albeit a smaller group, found a significant negative relationship, and some reported no significance at all. VO, as an organization-level construct, is a relatively newer and less studied concept but it has also been found to play a role in entrepreneurial outcomes in a variety of settings (Chun, 2017; McLeod et al., 2018; Payne et al., 2011). Given the rising demands of society for companies to act in more socially responsible ways, this type of rhetoric is sparking interest among both academics and practitioners (Chun, 2017; McLeod et al., 2018; Payne et al., 2011)

Within the crowdfunding realm, studies about the influence of VO and EO rhetoric on the campaign success are almost non-existent (Anglin & Short, 2019). However, a small but growing body of research finds evidence of their importance but conclusions also vary depending on the context (Anglin & Short, 2019). Thus, Moss et al. (2014) studied VO and EO as multi-dimensional constructs using data from a microlending website Kiva.org and found mixed results. Thus, only four out of six VO dimensions (conscientiousness, courage, empathy and warmth) were significant and had a negative effect on the loan funding success, whereas only three out of five EO dimensions (innovativeness, competitive aggressiveness and risk taking) were significant and had a positive influence. However, in their replication study of this paper but within the RBCF context ofKickstarter.com, Anglin and Short (2019) did not find significance for any of the dimensions for the same dependent variable. Furthermore, they found a significant negative effect of autonomy and innovativeness for funds raised and backers models, which is inconsistent with the discoveries made by Moss et al. (2014). Thus, discussing these contrasting results in their replication paper, Anglin and Short (2019) advise to examine each type of crowdfunding individually and once again warn against naive generalization of findings across contexts.

Given the mixed results of prior studies, difficulty with generalizability of results across platforms and a virtual absence of papers about VO and EO rhetoric specifically within RBCF (Anglin & Short, 2019), I turn to the Kickstarter.com website as a final step of hypothesis formulation about their effects on performance. I do so in order to get a better understanding of the context provided and the values embraced by the platform. Thus, a quick glance at the “About Us” section of the website almost instantly gives away its virtuous orientation. There is great emphasis on words such as “help”, “support”, “community”, “society”, “together” etc. For example, Kickstarter’s mission statement presented on that same page reads: “Our mission is to help bring creative projects to life”. In general, Kickstarter appears to call for an empowerment of individuals by encouraging them to follow their passion and break free from the profit-seeking behavior of a typical business. The following is stated just below their mission statement:

We don’t want art world elites and entertainment executives to define our culture; we want creative people — even those who’ve never made anything before — to take the wheel. We help creators connect directly with their communities, putting power where it belongs.

Another statement on the same page reads: “Kickstarter is one of those platforms that gives you space to work with people who know you, love you, and support you.” Furthermore, when one is about to create a project on Kickstarter.com, they are first taken to an introduction page with the following message: “A Kickstarter project does more than raise money. It builds community around your work”. Finally, in 2015 Kickstarter became a Public Benefit Corporation — “a for- profit company that prioritizes positive outcomes for society as much as [for its] shareholders” (Kickstarter, 2020a). To summarize, one can reasonably conclude that Kickstarter favors a virtuous orientation of projects on its platform, as its context, arguably, resonates with Definition 1.

At the same time, there is no mention ofbuzz words common for conventional funding platforms, such as “profits”, “market share”, “business opportunity”, “return on investment” and so on. As a matter of fact, Kickstarter discourages the use of exaggerations in campaign descriptions that are often used to impress traditional investors. For example, when I tried to create a sample campaign with a title “Best product ever”, I was advised not to use such a bold statement and was redirected to an information page with guidelines suggesting to avoid the use of superlatives and puffery (e.g., words such as “best”, “revolutionary”, “unrivaled”). It warns that:

The language you choose to present your project plays a critical role in setting expectations for backers. [...] Leaning on cheap marketing language to make your project appealing at the outset won’t do you any favors in the long run if your project isn’t able to meet the unrealistic expectations you set for your backers.

To sum up, one can reasonably conclude that Kickstarter favors less or even disfavors, to some extent, an entrepreneurial orientation of projects on its platform, as its context appears to be somewhat incompatible with Definition 2.

The above conclusions are also supported by the demographics of crowdfunding. Thus, Calic and Mosakowski (2016) report that crowdfunders tend to be younger males from North America or Europe with a decent income. They normally belong to generation Y or are millennials, who tend to choose to work for and be customers of companies that are environmentally friendly and socially responsible. Such preferences are arguably better aligned with the virtuous rather than entrepreneurial orientation of firms. This change in values held by crowdfunding participants may potentially be exploited through an appropriate type of rhetoric. Thus, combining the findings of prior research on VO and EO with the discussed context of Kickstareter.com, I arrive at the following two hypotheses:

Hypothesis la. The use of VO rhetoric in campaign narratives has a positive effect on reward- based crowdfunding performance.

Hypothesis lb. The use of EO rhetoric in campaign narratives has a negative effect on reward- based crowdfunding performance.

2.4.2 Sex, VO and EO rhetoric, and reward-based crowdfunding

A vast amount of research exists on the influence of an individual’s sex on entrepreneurial outcomes in a variety of contexts (e.g. Brooks, Huang, Kearney, & Murray, 2014; Canning et al., 2012; M. Johnson et al., 2018; Vishal, Goktan, & Gunay, 2014). From a social role theory perspective, in traditional finance male entrepreneurs tend to perform better than their female counterparts because their gender role is better aligned with their occupational role (Anglin, Wolfe, et al., 2018; Buttner & Rosen, 1988; Eddleston et al., 2014; Guzman & Kacperczyk, 2019; Vishal et al., 2014). However, given the greater importance placed on the pro-social orientation of founders in crowdfunding, it appears that the gender role of women is better aligned with this evolving role of an entrepreneur, which reduces the tension, and they tend to outperform men (Greenberg & Mollick, 2016; M. Johnson et al., 2018; Marom et al., 2014). Therefore, given the findings of prior studies, I explore sex as one of the factors influencing reward-based crowdfunding performance, as well as its moderating effect on the entrepreneurial rhetoric in campaign descriptions.

According to their gender role, women are normally expected to be communal e.g., compassionate, nurturing, gentle, agreeable, helpful and selfless etc. (Anglin, Wolfe, et al., 2018; Balachandra et al., 2017; S. Johnson et al., 2008). Such qualities are aligned with dimensions of VO rhetoric, whose dictionary includes words such as “mindful”, “caring”, “compassionate”, “kind”, “ready-to-help”, “tolerant”, “ethical” and “diplomatic” (Payne et al., 2011). At the same time, women’s gender role appears to be incompatible with the dimensions of EO that include words such as “do-it-yourself”, “compete”, “exploit”, “fight” and “radical” (Short et al., 2010). Men, however, are expected to be agentic e.g., assertive, dominant, controlling and confident etc. (Anglin, Wolfe, et al., 2018; Balachandra et al., 2017; S. Johnson et al., 2008), and would normally benefit from higher levels of EO and lower levels of VO, which is in line with their gender role expectations. Given the perceived compatibility of women’s gender role with the VO rhetoric and incompatibility with the EO rhetoric, I hypothesize that they will benefit greater from using higher levels of VO and be punished more than their male counterparts when using higher levels ofEO:

Hypothesis 2a. An entrepreneur’s sex positively moderates the relationship between VO and reward-based crowdfunding outcomes, such that women benefit greater than men from using higher levels ofVO rhetoric.

Hypothesis 2b. An entrepreneur’s sex negatively moderates the relationship between EO and reward-based crowdfunding outcomes, such that women get punished more than men for using higher levels ofEO rhetoric.

2.4.3 Race, VO and EO rhetoric, and reward-based crowdfunding

Similar to sex, matters concerning race have become a prominent research topic in academia, including the area of entrepreneurial finance (e.g. Anglin, Wolfe, et al., 2018; Pope & Sydnor, 2008; Ravina, 2008). It is well established that racial minorities are usually at a disadvantage when seeking funding or applying for loans (Galster, 1996; Han, 2004; Lyons- Padilla et al., 2019). Even though they are not a homogeneous group and variations exist in how Blacks, Hispanics, Asians or other racial groups are perceived (Chung & Lankau, 2005), there are a number of common stereotypes attached to their minority status. Unfortunately, these biases normally do not play in their favor and often impair their perceived entrepreneurial aptitudes and leadership abilities (Anglin, Wolfe, et al., 2018; Chung & Lankau, 2005; Spence et al., 2013). What is more concerning is that, unlike with sex, research indicates that there is largely no reversal nor neutralization of these discriminative tendencies in crowdfunding (Anglin, Wolfe, et al., 2018; Pope& Sydnor, 2008; Ravina, 2008). Therefore, given the findings of prior studies, I explore race as one of the factor’s influencing RBCF performance as well as its moderating effect on the entrepreneurial rhetoric in campaign descriptions.

Given the social role of minorities shaped by observed behavior throughout history, they are normally expected to be in roles of subordinates rather than leaders or managers (Anglin, Wolfe, et al., 2018; Chung & Lankau, 2005). Due to various historical reasons, they have traditionally held less power than Caucasians in various areas of Western society (Chung & Lankau, 2005). Power is often associated with authority, control, credibility and expertise (Ragins, 1997). These are closely connected to words found in the EO dictionary, such as “exploit”, “authority”, “expert”, “bold”, “fearless” and “independent” (Short et al., 2010). On the other hand, it is also a stereotype that racial minorities are perceived as more nurturing, supportive and weak (Chung & Lankau, 2005; Ragins, 1997). Such qualities can be connected to VO rhetoric, which is represented by words such as “aidful”, “helpful”, “charitable”, “humane”, “supportive”, “amiable” and “tender” (Payne et al., 2011). Consequently, given the perceived compatibility of racial minorities’ social role with the VO rhetoric and incompatibility with the EO rhetoric, I hypothesize that they will benefit greater than Caucasians from using higher levels of VO and be punished more than their white counterparts when using higher levels ofEO:

Hypothesis 3a. An entrepreneur’s race positively moderates the relationship between VO and reward-based crowdfunding outcomes, such that racial minorities benefit greater than Whites from using higher levels ofVO rhetoric.

Hypothesis 3b. An entrepreneur’s race negatively moderates the relationship between EO and reward-based crowdfunding outcomes, such that racial minorities get punished more than Whites for using higher levels ofEO rhetoric.

2.4.4 Attractiveness, VO and EO rhetoric, and reward-based crowdfunding

Even though physical attractiveness is a more subjective concept compared to sex and race due to differences in tastes, there is normally a certain degree of consensus in what is perceived as attractive (Langlois et al., 2000; Ravina, 2008). Similar to other observable characteristics, a person’s appearance has also been found to have an influence on performance in a wide range of contexts (e.g. Baron et al., 2006; Eagly, Ashmore, Makhijani, & Longo, 1991; Jenq et al., 2015; S. Johnson et al., 2014; Lee, Pitesa, Pilluda, & Thau, 2015; Ravina, 2008). However, its effects appear to be more domain dependent and can vary greatly (S. Johnson et al., 2014). For example, in certain situations good looks are an asset and generate the so-called “what is beautiful is good” (Dion, Berscheid, & Walster, 1972) or “beauty premium” (Jin, Fan, Dai, & Ma, 2017) effects. Similarly, the title of the book “Beauty Pays” by Hamermesh (2011) speaks for itself and discusses how attractive people are in a more advantageous position in “labor, loans and marriage markets” (Ruffle & Shtudiner, 2011, p. 3). On the other hand, scholars came across situations when attractiveness is a “liability” and has a negative effect on performance via the “beauty is beastly” effect (Heilman & Saruwatari, 1979). For example, this happens when attractive women apply for masculine sex-typed jobs (S. Johnson et al., 2014). On online platforms, conclusions about the influence of attractiveness on performance also seems to differ. For example, Jin et al. (2017) and Ravina (2008) found a significant positive relationship, whereas in studies by Duarte, Siegel, and Young (2012) and Ciuchta and O'Toole (2016) it was also positive but insignificant. These contrasting findings of prior studies further motivated me to explore attractiveness as one of the factors influencing reward-based crowdfunding performance, as well as its moderating effect on the entrepreneurial rhetoric in campaign descriptions.

According to a study by Dion et al. (1972) quoted by Ruffle and Shtudiner (2011, p. 3), attractiveness has been shown to be linked to traits such as “sensitivity, kindness, poise, modesty and outgoingness”. Good-looking people are also perceived as more trustworthy and appear to “elicit altruistic, trusting and cooperative behavior” (Ruffle & Shtudiner, 2011, p. 3). Such qualities can be arguably connected to VO, whose dictionary includes words such as “accountable”, “considerate”, “listening”, “equitable”, “kind”, “sincere” and “trustworthy” (Payne et al., 2011). On the other hand, unattractive people may then be perceived to be lower on those traits or even as unfriendly, bitter, grumpy and boastful. Indeed, in a paper by Greitemeyer (2020), good-looking people were more humble and accurate at evaluating their looks, while their uglier counterparts were consistently overestimating themselves. Such traits and qualities of unattractive individuals can be associated with words from the EO rhetoric dictionary, such as “unconnected”, “brash”, “enemy” and “antagonist” (Short et al., 2010). Consequently, given the perceived compatibility of attractive people’s social role with the VO rhetoric and incompatibility with the EO rhetoric, I hypothesize that they will benefit greater than uglier individuals from using higher levels of VO and will be punished more than their unattractive counterparts when using higher levels ofEO:

Hypothesis 4a. An entrepreneur’s attractiveness positively moderates the relationship between VO and reward-based crowdfunding outcomes such, that attractive individuals benefit greater than their unattractive counterparts from using higher levels ofVO rhetoric.

Hypothesis 4b. An entrepreneur’s attractiveness negatively moderates the relationship between EO and reward-based crowdfunding outcomes, such that attractive individuals get punished more than their unattractive counterparts for using higher levels ofEO rhetoric.

2.4.5 Age, VO and EO rhetoric, and reward-based crowdfunding

Finally, I turn my attention to the last demographic characteristic explored in this paper, that is an entrepreneur’s age. This factor appears to be least studied of the four notjust within the crowdfunding context, but in the entrepreneurial literature in general (Zhao et al., 2020). Nevertheless, studies indicate that one’s age can also have an influence on outcomes in a variety of contexts due to stereotypes (Flamion, Missotten, Jennotte, Hody, & Adam, 2020; Zhao et al., 2020). Similar to attractiveness, age appears to be a double-edged sword, whose effects are domain dependent. For example, older people usually possess a greater amount of human capital that they have accumulated throughout their lives. This makes them appear to make better and wiser decisions and hence improves their job performance (Becker, 1962; Forbes, 2005). At the same time, they may appear less healthy and energetic, impairing their entrepreneurial abilities (Brockhaus, 1980; Gielnik, Zacher, & Frese, 2010). Indeed, there exist certain stereotypes that successful entrepreneurs are usually of a moderately younger age (Zhao et al., 2020). In general, there are normally more negative prejudices and discrimination associated with an older age due to the perception of declining abilities and competence, especially in today’s digital world when staying up to date with current developments is especially crucial (Flamion et al., 2020). These contrasting findings of prior studies further motivated me to explore age as one of the factors influencing reward-based crowdfunding performance, as well as its moderating effect on the entrepreneurial rhetoric in campaign descriptions.

Given their social role, older people are often perceived as warm (Flamion et al., 2020), conservative (Hambrick & Manson, 1982), risk averse (Stewart & Roth, 2001) and family oriented (Parasuraman, Purohit, Godshalk, & Beutell, 1996). These traits can be arguable connected to VO, whose dictionary contains words such as “careful”, “responsible”, “steady”, “supportive”, “kind”, “hospitable” and “tolerant” (Payne et al., 2011). Younger adults, on the other hand, are often perceived as more openminded (Hambrick & Manson, 1982), risk tolerant (Stewart & Roth, 2001) and independent (Flamion et al., 2020). These traits resonate with the words from the EO dictionary such as “autonomy”, “free”, “ambitious”, “competitive”, “creative”, “imagination”, “innovation”, “brash” and “risky” (Short et al., 2010). Consequently, given the perceived compatibility of older people’s social role with the VO rhetoric and incompatibility with the EO rhetoric, I hypothesize that they will benefit greater than younger individuals from using higher levels of VO and be punished more than their younger counterparts when using higher levels ofEO:

Hypothesis 5a. An entrepreneur’s age positively moderates the relationship between VO and reward-based crowdfunding outcomes, such that older individuals benefit greater than their younger counterparts from using higher levels ofVO rhetoric.

Hypothesis 5b. An entrepreneur’s age negatively moderates the relationship between EO and reward-based crowdfunding outcomes, such that older individuals get punished more than their younger counterparts for using higher levels ofEO rhetoric.

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