Thomas H. Allison

Crowdfunding in a Prosocial Microlending Environment: Examining the Role of Intrinsic Versus Extrinsic Cues

Microloans garnered from crowdfunding provide an important source of financial capital for nascent entrepreneurs. Drawing on cognitive evaluation theory, we assess how linguistic cues known to affect underlying motivation can frame entrepreneurial narratives either as a business opportunity or as an opportunity to help others. We examine how this framing affects fundraising outcomes in the context of prosocial lending and conduct our analysis on a sample of microloans made to over 36,000 entrepreneurs in 51 countries via an online crowdfunding platform. We find that lenders respond positively to narratives highlighting the venture as an opportunity to help others, and less positively when the narrative is framed as a business opportunity.

Research on Crowdfunding: Reviewing the (Very Recent) past and Celebrating the Present:

Crowdfunding is a rapidly growing phenomenon wherein entrepreneurs seek funding for their entrepreneurial activities from a potentially large audience of interested individuals. Crowdfunding has exploded in popularity over the last decade and now accounts for tens of billions of dollars annually. But despite the importance and growth of crowdfunding, little scholarly knowledge exists about the topic. To address this gap, this special issue includes five articles that each advance knowledge about crowdfunding in important ways. We briefly review past work on crowdfunding in leading entrepreneurship and management journals. We then highlight the diverse contributions offered in the special issue articles.

How Should Crowdfunding Research Evolve? A Survey of the Entrepreneurship Theory and Practice Editorial Board

The explosion of crowdfunding within entrepreneurial circles is attracting increased academic interest in the nature of crowdfunding, its antecedents, and its consequences. In an effort to help researchers concentrate their inquiry on the most promising questions and theories involving crowdfunding, we surveyed key thought leaders within the entrepreneurship field—the Entrepreneurship Theory and Practice editorial review board—regarding what inquiry they believe is needed. Their responses offer implications for crowdfunding research. For example, cross–disciplinary work is one approach that board members believe holds high potential. In response, we outline a cross–disciplinary research agenda that can inform scholarly efforts.

The Role of Charismatic Rhetoric in Crowdfunding: An Examination with Computer-Aided Text Analysis

Abstract Purpose Social entrepreneurs often make public appeals for funding to investors who are motivated by nonfinancial considerations. This emerging research context is an opportunity for researchers to expand the bounds of entrepreneurship theory. To do so, we require appropriate research tools. In this chapter, we show how computer-aided text analysis (CATA) can be applied to advance social entrepreneurship research. We demonstrate how CATA is well suited to analyze the public appeals for resources made by entrepreneurs, provide insight into the rationale of social lenders, and overcome challenges associated with traditional survey methods. Method We illustrate the advantages of CATA by examining how charismatic language in 13,000 entrepreneurial narratives provided by entrepreneurs in developing countries influences funding speed from social lenders. CATA is used to assess the eight dimensions of charismatic rhetoric. Findings We find that four of the dimensions of charismatic rhetoric examined were important in predicting funding outcomes for entrepreneurs. Implications Data collection and sample size are important challenges facing social entrepreneurship research. This chapter demonstrates how CATA techniques can be used to collect valuable data and increase sample size. This chapter also examines how the rhetoric used by entrepreneurs impacts their fundraising efforts.

Errant Signals: How Crowdfunding Performance Elicits Competition for De Novo Entrepreneurs

Crowdfunding enables entrepreneurs to raise significant amounts of financial capital from a large crowd of individual investors each contributing small dollar amounts. This democratization of fundraising has led practitioners and academics alike to herald crowdfunding as a particularly promising source of capital. However, this optimistic view of crowdfunding’s role in entrepreneurship has not captured the competitive threats that emerge from public fundraising. For instance, the success of Matthew and Mark McLachlan in raising over

Better Together? Signaling Interactions in New Venture Pursuit of Initial External Capital

6.4 million on Kickstarter for the Fidget Cube was quickly copied and the Stress Cube was launched by an existing organization. We integrate insights from signaling theory and the competitive dynamics literature to examine how quality signals sent to potential investors by the entrepreneur and the subsequent performance of the campaign may elicit increased competition for entrepreneurs at a time when they are unlikely to be able to effectively address this challenge. Specific...