Success Factors of the Implementation of Crowdfunding for Start-Ups

Success Factors of the Implementation of Crowdfunding for Start-Ups

Kennedy D. Gunawardana
Copyright: © 2020 |Pages: 17
DOI: 10.4018/IJSKD.2020100106
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Abstract

There are number of challenges which are faced in implementing crowdfunding in Sri Lanka. Crowdfunding platforms in Sri Lanka are being used to gather funds, mainly for charities and to find seed money for startups. This study focuses on finding success factors affecting the implementation of the crowdfunding projects which are hosted to gather capital for startups. The study contains a proposed conceptual framework developed by reading recent literature with the facts contributing to the success of startups through crowdfunding and analyzing information gathered from experts in Sri Lanka. Variables namely web presence, investors, crowdfunding team, goal and rewards were analyzed together with the success of funding startups via crowdfunding Finally, all the variables except web presence indicated significant towards the success of funding startups via crowdfunding.
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Literature Review

As defined by Belleflamme (2014), crowdfunding uses the same concept as “crowdsourcing” in that “crowds” are the main provider of ideas, solutions and feedback. The difference here is that in crowdfunding, the crowd provides financial resources (Wieck,2013). The word “crowdfunding” literally means funding from the crowd, that is, receiving small investments from a crowd of people that cumulate to a large sum. With the rapid development of the internet, funding patterns have also been developed by using internet platforms as a transaction market, instead of traditional financial intermediaries such as banks and institutional investors. Crowdfunding, through crowdfunding internet-based platforms, has grown rapidly in recent years as a Geographic proximity

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