FACULTY AND RESEARCH

This study investigates characteristics of individual crowdfunding practices and drivers of fundraising success, where entrepreneurs can tailor their crowdfunding initiatives better than on standardized platforms. Our data indicate that most of the funds provided are entitled to receive either financial compensations (equity, profit-share arrangement) or non-financial benefits (final product, token of appreciation), while donations are less common. Moreover, crowdfunding initiatives that are structured as non-profit organizations tend to be significantly more successful than other organizational forms in achieving their fundraising targets, even after controlling for various project characteristics. This finding is in line with theoretical arguments developed by the contract failure literature that postulates that non-profit organizations may find it easier to attract money for initiatives that are of interest for the general community due to their reduced focus on profits.