TY - JOUR
T1 - Funding the story of hybrid ventures
T2 - Crowdfunder lending preferences and linguistic hybridity
AU - Moss, Todd W.
AU - Renko, Maija
AU - Block, Emily
AU - Meyskens, Moriah
N1 - Funding Information:
While much of the earlier research on entrepreneurial finance has focused on formal investors as the targets of entrepreneurs' communication, more recent literature acknowledges that the investing “crowd” behaves differently. The amounts provided by individuals on crowdfunding platforms are typically small (roughly $34 USD per individual funder per loan based on our sample), making the downside of funding much more limited. A key part of any crowdfunding proposal, such as those presented on the Kiva platform, is a description in which the entrepreneurs present the project to be funded. Previous research has demonstrated the importance of communication content (what the pitch contains) for funding purposes. For instance, pitch rhetoric associated with blame and present concern has been found to increase funding speed ( Allison et al., 2013 ), as have narratives that highlight the venture as an opportunity to help others ( Allison et al., 2015 ), and those that emphasize autonomy, competitive aggressiveness, and risk-taking ( Moss et al., 2015 ). In addition to pitch content, the linguistic style used ( Parhankangas and Renko, 2017 ) as well as favorable impression formation ( Duarte et al., 2012 ) have been found to make a difference. Collectively, this previous body of research demonstrates that effective communication is central to crowdfunding success, as funding decisions are based on very limited amounts of digitally-conveyed information.
Funding Information:
The authors would like to thank Oana Branzei and the other JBV Special Issue guest editors for their guidance on how to improve the paper, and the two anonymous reviewers for their thoughtful comments throughout the review process. We are also grateful for the financial support from the Whitman School of Management at Syracuse University.
Publisher Copyright:
© 2017 Elsevier Inc.
PY - 2018/9
Y1 - 2018/9
N2 - Prosocial crowdfunding platforms are venues for individual lenders to allocate resources to ventures that specifically pursue economic and social value. In a setting where hybridity is expected, do crowdfunders respond positively to category-spanning ventures, or do they prefer to fund ventures that are more clearly situated within a single category? Drawing on theory rooted in category membership and spanning, our hypotheses test whether prosocial crowdfunding lenders will more quickly allocate resources to hybrid microenterprises that communicate their hybridity, or to those that communicate a single one of their dual aims. Our study demonstrates that even in such a setting, crowdfunders lend more quickly to microenterprises that position themselves within a single linguistic category in which the social is emphasized over the economic. This suggests that how hybrid organizations position themselves in their linguistic narratives has a significant impact on resource allocation by external prosocial audiences.
AB - Prosocial crowdfunding platforms are venues for individual lenders to allocate resources to ventures that specifically pursue economic and social value. In a setting where hybridity is expected, do crowdfunders respond positively to category-spanning ventures, or do they prefer to fund ventures that are more clearly situated within a single category? Drawing on theory rooted in category membership and spanning, our hypotheses test whether prosocial crowdfunding lenders will more quickly allocate resources to hybrid microenterprises that communicate their hybridity, or to those that communicate a single one of their dual aims. Our study demonstrates that even in such a setting, crowdfunders lend more quickly to microenterprises that position themselves within a single linguistic category in which the social is emphasized over the economic. This suggests that how hybrid organizations position themselves in their linguistic narratives has a significant impact on resource allocation by external prosocial audiences.
KW - Categories
KW - Crowdfunding
KW - Hybrid organizations
KW - Prosocial organizing
KW - Social entrepreneurship
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U2 - 10.1016/j.jbusvent.2017.12.004
DO - 10.1016/j.jbusvent.2017.12.004
M3 - Article
AN - SCOPUS:85038878231
VL - 33
SP - 643
EP - 659
JO - Journal of Business Venturing
JF - Journal of Business Venturing
SN - 0883-9026
IS - 5
ER -