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Crowdfunding Platforms asSuper-Catalysts
in an Entrepreneurial Ecosystem
Prof. Dr. Othmar M Lehner
based on current research by
Othmar Lehner and Theresia Harrer 2016-2017
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Three Recent Inquiries into CF
• Crowdfunding Platforms as Super-Catalysts in an Entrepreneurial Ecosystem – Lehner & Harrer (2017), British Academy of Management -
forthcoming
• Entrepreneurial Implications of Crowdfunding– Lehner, Ennsgraber & Grabman (2015), Venture Capital -
Journal of Entrepreneurial Finance
• Formation and Interplay of Social Capital in CF– Lehner (2014), Entrepreneurship & Regional Development
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3Types and Platforms, Source: Lehner
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An entrepreneurial ecosystem refers to
the social and economic environment affecting the local/regional entrepreneurship.
… it can also be a group of companies, including start-ups, and one or more coordination (focal) entities, which share similar goals and decide to form a network or organization in order to explore economies of scale combined with flexibility and entrepreneurial "drive".
Pitelis, Christos (2012) "Clusters, entrepreneurial ecosystem co-creation, and appropriability: a conceptual framework." Industrial and Corporate Change: Oxford University Press
Research Design:
23 crowdfunding cases which were successfully funded on 11 different platforms with a total funded sum of 77,210,781 USD. The selection being based upon the criteria of being either exemplary as identified in the literature or exceptional (Uy et al., 2009). Inductive coding with inter-coder reliability and theme building (Denzin et al. 2012).
• What are the value propositions of CF Platforms?
• What is the influence of CF Platforms as focal actors on the whole field from a neo-institutionalist perspective?
• What can be derived from the specific context for broader entrepreneurship research on focal actors in ecosystems?
Following Cornelissen’s (2017) AMR styles of theorizing, we aim to:“explain the fuzzy nature of many subjects by logically and causally combining different constructs into a coherent and explanatory set of types”
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Platform Main Type of CF Geographic Scope Number Cases/
Documents
Cases Total Funding Volumes
(USD)
03 Crowdcube Equity, Debt UK, US 3 / 35 2,357,156
01 Kickstarter Reward US, worldwide 6 / 57 52,887,966
02 Indiegogo Reward, Equity, Donation US, worldwide 7 / 63 17,456,597
(12,810,000*)
04 Australian Small Scale
Offerings Board
Equity, Debt AUS, worldwide 2 / 29 799,156
05 1000x1000 Reward/Debt AT 2 / 26 2,142,969
06 Symbid Equity US, Europe 1 / 24 1,263,146
07 Kiva Lending US, worldwide 0 / 16 Platform only
08 RocketHub Equity US 0 / 9 Platform only
09 Fundly Donations US, worldwide 1 / 7 3,790
10 GoFundMe Lending, Social/ Personal
Fundraising
US 0 / 5 Platform only
11 MicroVentures Equity, Venture Capital,
Business Angels
US, worldwide 1 / 3 300,000
General Documents Non-specific worldwide 34
Aggregated Info Types of Cases:
Reward 9
Equity 8
Donation 3
In-Demand 1
Reward / Lending
2
Industry of Cases:
High Tech 8
Hygiene 1
Tourism 3
Social 2
Software 4
Consumer 4
Personal 1
Total:
11 platforms,
23 cases and
308 documents
Total funds:
77,210,781 USD
* has not been transferred because
threshold was not reached, not
included in total
Statistics on Platforms, Cases and Documents
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Financial Intermediary
Accelerator
Information Broker
Expert
Advocator
Catalyst
Roles:
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Financial
Intermediary
The platform acts as an
intermediary between the
ventures and the crowd,
complies and enforces
compliance with a complex
set of regulations.
It offers various types of
capital and uses some form
of commission as a revenue
stream.
Seen in all cases,
building the
foundation of CF
Original Value
Proposition
Financial
Intermediation
(Haas et al.,
2014)
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Accelerator The platform actively
acknowledges and supports
growth and scaling strategies
through active promotion and
collaboration with other
providers.
Often several stages of CF with
different types of capital in
combination with traditional
forms and market-channels
are targeted.
Signals are actively created to
attract economic capital.
Indiegogo
InDemand,
Microventures,
ASSOB
Signalling and
Legitimacy
(Ryu and Kim, 2016;
Kromidha and
Robson, 2016;
Ahlers et al., 2015),
Social Capital,
Networking Theory
(Skirnevskiy et al.,
2017; Colombo et
al., 2015)
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Symbolic Capital
Social Capital
Cultural Capital
Economic
CapitalEntrepreneur(s)
engage
Opportunityenables exploitation
Bourdieu’s Social Capital in Crowdfunding, Source: Lehner 2014
Accelerator Role
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Information
Broker
The platform provides
investor-relations relevant
tools, checklists and
communication channels
in a standardized way.
Through this the
transaction costs are
reduced and a functioning
market is enabled.
Crowdcube,
ASSOB, Symbid,
RocketHub,
GoFundMe
Information
Economics
(Belleflamme et al.,
2015),
Transaction Cost
Theory (Scholes et
al., 1976),
Human Computer
Interaction (Prpic
and Shukla, 2016)
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Information Broker Role
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Expert The platform offers value
through its expert role, for
example through consulting
services and expert rounds.
Often specifically tailored to
niche positions. From a
critical perspective,
platforms can limit and lead
to uniform configurations
through a restrictive and in-
transparent selection
process.
Kickstarter,
1000x1000,
Kiva
Symbid
Configuration
Theory
(Miller, 1986),
Neo-
Institutionalism,
(Chaney et al.,
2016),
Power and
Discourse
(Beaulieu et al.,
2015)
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Expert Role
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Expert Role – (Reflexive) Isomorphism
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Advocator The platform acts as powerful
contributor to the CF
discourse, for example by
influencing policy makers and
legislation.
Besides the common ground
with the ventures there is also
a considerable power-play
involved.
ECN,
Symbid,
Indiegogo,
1000x1000,
RocketHub
National CF
Association of
Canada (NCFA)
Power and
Discourse,
Legislation (Coke,
2017),
Advocacy, Social
Movement
(Steinberg, 2017)
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Advocator/ Lobbyist Role
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Catalyst The platform uses its public
outreach to target new
markets and introduce new
and innovative services and
products.
Through this, ventures which
are seen as relevant from a
societal perspective but are
underfunded by traditional
sources gain traction and can
exploit their opportunities.
Microventures,
Kiva,
Fundly,
GoFundMe,
Generosity
Indiegogo,
Innovation (Lehner
et al., 2015;
Partanen et al.,
2014),
Social
Entrepreneurship,
Impact Investing
(Lehner, 2013),
Legitimacy (Fisher
et al., 2017;
Frydrych et al.,
2014)
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Most Frequent Themes Most Frequent Tropes
Empowerment (15) Community (11)
Self Determination (9) Entrepreneurship (11)
Health (6) Strong Woman (9)
Body Image (6) Natural Woman (8)
Sharing Economy (5) Sexuality (7)
Ongoing Research on 42 CF cases: Feminist Perspectives in CF: A Discourse Analysis – Harrer/LehnerForthcoming in 2017
Catalyst Role
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Financial Intermediary
Accelerator
Information Broker
Expert
Advocator
Catalyst
Roles:
Concluding
• Crowdfunding can indeed be understood as an ecosystem with actors, links and positions, and with CF Platforms as focal, coordinating actors.
• CF Platforms claim several value propositions through their roles, from intermediaries to advocators, accelerators, information brokers, catalysts and experts.
• From a neo-institutionalist perspective, this brings with the danger of a reflexive isomorphism and an unnatural narrowing of the field.
• For entrepreneurship research in general, CF displays the necessity for interdisciplinary approaches, and the potential need for a revised epistemology, as we need to cater for both, a socially constructed nature (see e.g. feminist themes) as well as a pragmatic view on contextualized generalizations. 23
July 2016: 780pp, 95 illustrationsHb: 978-1-138-77754-5 | £125.00eBook: 978-1-315-77257-8
Ongoing Research
Future Perspectives & Outlook
Invitation to Collaborate!
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Current Research: C-FIT
• Feminist Perspectives in CF
• The Role of Platforms as Intermediaries
• Signaling and Trust in CF
• Rules & Regulations: International Comparison
• Behavioural Finance and CF
• Matchmaking: Textual and Visual (Re)Presentation
• The building of Legitimacy: Ventures and CF
• Transaction Cost Theory to explain CF26
Crowdfunding Platforms asSuper-Catalysts
in an Entrepreneurial Ecosystem
Prof. Dr. Othmar M Lehner
based on current research by
Othmar Lehner and Theresia Harrer 2016-2017
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