Structured Abstract
(Purpose) This thesis aims to take stock and systemize existing knowledge on crowdfunding while providing overview of the industry, its regulatory environment and advancing the insight into the role of crowdfunding in the startup lifecycle.
(Design/metodology/approach) It is adopting an exploratory and phenomenon-based approach which is deemed appropriate when investigating rather new phenomena. Furthermore, the work combines survey and interview methodologies to assess the opinion and real-world behavior of different stakeholders in crowdfunding marketplace and identify gaps requiring further academic consideration.
(Theoretical Perspective) Grounded in limited theories surrounding crowdfunding as well as adjacent fields such as early stage, informal and angel investment.
(Metodology) Empirical data was gathered using multiple interactive web-based questionnaires distributed to different stakeholders and “informed general public” mainly through the social networks (Linkedin, Facebook and Twitter) and direct solicitation of entrepreneurial associations, networks and online communities. The study relies on both qualitative and quantitative analysis in attempt to find data patterns useful in future research and establish some managerial and policymaker recommendations based on limited evidence collected.
(Originality and practical implications) The work adds value to this field through a 3-fold contribution: Taking a look at crowdfunding through the prism of SWOT analysis of the practice itself and Porter’s 5 forces analysis of crowdfunding platforms industry. Providing evidence in favor of implementing various degrees of regulation based on different crowdfunding categories, using the Italian case of equity-based crowdfunding regulation as a model. Finally, it yields some interesting findings on relevance of crowdfunding in the venture startup while pointing out key motivators which make entrepreneurs consider this fundraising option. In addition, related policymaker/managerial implications are exposed and academic literature updated with reference to contemporary developments in this dynamic field.
Keywords: crowdfunding, industry overview, regulation, role, dynamics
Paper type: MSc thesis
Table of Contents
Introduction
Part I.
What is crowdfunding?
Position of crowdfunding inside the entrepreneurial equity “food” chain and how crowdfunding differs from angel/VC funding
Main actors in crowdfunding space
Crowdfunding taxonomy and crowdfund investing ecosystem
Literature review and principal research streams
General exploratory research
Who gets crowdfunded?
Regulation and policy
Dynamics of the crowdfunding process
The geography of crowdfunding
Common points and research gaps
Five forces that shape the crowdfunding industry
Market overview and SWOT analysis of crowdfunding
Part II.
USA
Criticism
Italy
Is the Italian approach truly in line with expectations of market participants and the general public?
Other European countries and the future of Paneuropean regulation
Policymaker suggestions on crowdfunding issues
Part III.
Theoretical framework and grounding
Research questions
Research method and design
Data collection and empirical setting
Quantitative Findings
Descriptive results
Empirical patterns and relationships
Evidence in consensus analysis
Qualitative findings
Qualitative findings obtained from questionnaires
Expert interviews
Business angels and equity crowdfunding (cases)
Conclusions
Managerial and policymaker implications
Limitations and suggestions for future research
Research Objectives and Key Topics
This thesis examines the role of crowdfunding within the venture startup ecosystem, aiming to systematize existing knowledge, evaluate the industry's dynamics, and provide insights into the regulatory environment and potential managerial implications for entrepreneurs.
- Exploration of crowdfunding as a viable alternative for early-stage capital.
- Strategic industry analysis using Porter’s 5 forces and SWOT frameworks.
- Investigation of regulatory environments in the USA and Italy.
- Methodological integration of stakeholder insight surveys and expert interviews.
- Evidence-based recommendations for policymakers and startups.
Excerpt from the Book
What is crowdfunding?
Crowdfunding (also known as crowdfinance) is a term used to describe a form of fundraising, usually conducted over the internet, in which a large number of people pool relatively small individual contributions in order to support a specific goal (Ahlers et al., 2012). Review of a rather modest literature on the topic uncovers a number of nuances in how crowdfunding is defined; confirming that substantial academic knowledge in this field is yet to be developed in order for consensus to emerge.
Belleflamme et al. (2013) extended upon the definition of a more general concept of crowdsourcing provided by Kleemann et al. (2008) in order to define crowdfunding as “an open call, essentially through the Internet, for the provision of financial resources either in form of donation or in exchange for a form of reward and/or voting rights in order to support initiatives for specific purposes”. Mollick (2014) and Bradford (2012) acknowledge that crowdfunding essentially draws inspiration from concepts like microfinance and crowdsourcing, but still represents a unique category of fundraising enabled by the proliferation of internet sites dedicated to the concept.
Crowdfunding refers to a variety of different efforts by entrepreneurs – cultural, social and for profit to fund their efforts by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries.
Summary of Chapters
Introduction: Provides the context of technological advancements and the emergence of crowdfunding as an important source of startup finance.
Part I.: Defines crowdfunding, explores its taxonomy, the ecosystem, and analyzes the industry through Porter’s 5 forces and SWOT analysis.
Part II.: Discusses the regulatory landscapes, specifically focusing on the USA and Italy, and addresses the concerns of market participants.
Part III.: Details the theoretical grounding, research methodology, quantitative and qualitative empirical findings, and final conclusions.
Keywords
crowdfunding, startup, finance, regulation, innovation, equity, industry, entrepreneurship, venture, ecosystem, data, survey, model, market, stakeholders.
Frequently Asked Questions
What is the core focus of this research?
The work focuses on the role of crowdfunding as a mechanism for startup financing, assessing its effectiveness and its position relative to traditional capital sources like business angels and venture capital.
What are the primary themes discussed?
The themes include the definition and taxonomy of crowdfunding models, the impact of current and proposed regulations in the US and Europe, and the strategic drivers behind the industry's growth.
What is the central research question?
The study primarily asks whether crowdfunding can serve as a viable, complementary pillar for venture startups and what factors influence an entrepreneur’s propensity to utilize it.
Which methodology is employed?
The thesis utilizes an exploratory and phenomenon-based approach, combining mixed-method research including stakeholder insight surveys, consensus analysis, and expert interviews.
What is covered in the main body of the work?
The main body covers the theoretical framework, a comprehensive review of existing literature, industry structure via SWOT and Five Forces models, comparative regulatory analysis, and empirical results from custom-made surveys.
Which keywords best characterize the research?
Key terms include crowdfunding, startup, regulatory environment, entrepreneurial finance, industry dynamics, and equity-based funding.
What does the study conclude about the Italian regulatory approach?
The author observes that the Italian system, while relatively young, represents a progressive and timely effort that aligns well with the feedback received from market participants, potentially serving as a model.
What specific practical guidance does the thesis offer entrepreneurs?
The work provides managerial implications, such as the need for entrepreneurs to align their business model with the specific requirements of crowdfunding platforms and the importance of leveraging existing networks to ensure campaign momentum.
- Quote paper
- I. M. (Author), 2014, Crowdfunding. Overview of the industry, regulation and role of crowdfunding in the venture startup, Munich, GRIN Verlag, https://www.grin.com/document/285390
