Reward-based Crowdfunding. Influence of Virtuous and Entrepreneurial Orientation Rhetoric on Campaign Performance

Artem Milkov

Mei 2021 · GRIN Verlag

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Master's Thesis from the year 2020 in the subject Business economics - General, grade: 1,0, Technical University of Munich, language: English, abstract: This paper extends academic literature on reward-based crowdfunding and examines the influence of entrepreneurial rhetoric on campaign performance through the lens of the social role theory. It explores how altruistic values shared by its participants redefine the social role of an entrepreneur. It demonstrates how this peculiarity can be exploited in favour of various disadvantaged demographic groups through an appropriate use of the language reflective of virtuous and entrepreneurial orientations. Despite their apparent importance, these two types of rhetoric have been largely neglected by scholars studying online funding platforms. Based on a quantitative analysis of 8,459 Kickstarter campaigns using a multilevel regression technique, the author discovered that virtuous orientation has a positive and entrepreneurial orientation negative effect on reward-based crowdfunding performance. Furthermore, in line with the social role theory, Caucasian women and racial minority men benefit greater than white males from the use of virtuous rhetoric and get punished more for using entrepreneurial rhetoric. However, these effects are reversed for racial minority females, who appear to be rewarded for violating the behaviour associated with their sex and race. Overall, the findings confirm that rhetoric is an important tool at entrepreneurs’ disposal, and they can improve their chances of success in reward-based crowdfunding by using it appropriately and in accordance with their social role. Crowdfunding is on course to become the leading source of capital for new venture financing, which is one of the most challenging tasks entrepreneurs have to face. Notwithstanding considerable progress, our understanding of its underlying processes remains inadequate.