Entrepreneurial Implications of Crowdfunding as Alternative Finance Source for Innovations
O. Lehner, E. Grabmann, C. Ennsgraber - Entrepreneurial Implications of Crowdfunding as Alternative Finance Source for Innovations - Journal of Venture Capital, Vol. 17, No. 1, 2015, pp. 171-189
Crowdfunding (CF) is a form of early-stage financing for innovative ventures, which has seen tremendous growth in the past few years – partly because it provides a desperately needed alternative to the scarcity of traditional sources of finance during the so called ‘credit crunch’. CF ranges from a simple form of pre-financing to full grown debt or equity investments, but they are typically small pledges that can add up to incredible amounts. Scholarly literature has only started to examine CF and is still in an early stage when it comes to identifying implications for entrepreneurs apart from often over-simplified anecdotal evidence of success. The authors argue that CF can by no means be seen from a financial perspective only, rather it needs to be addressed as a bundle of processes leading to innovative entrepreneurial business-models. This qualitative study explores four extreme cases from the information and communications technology sphere to find out non-financial implications of CF as alternative funding source for innovative entrepreneurs and their business models.