In Crowdfunding We Trust: Testing a Trust Building Model in Crowdfunding

Crowdfunding has recently revolutionized and democratized entrepreneurial fund-raising, which is now considered to be quick and efficient. However, while crowdfunding erases geographical boundaries and brings people from all... [ view full abstract ]

Crowdfunding has recently revolutionized and democratized entrepreneurial fund-raising, which is now considered to be quick and efficient. However, while crowdfunding erases geographical boundaries and brings people from all over the world virtually together, it also introduces opportunities to misbehave without suffering consequences. In fact, research has shown that failure rates in crowdfunding remain high (Mollick, 2014). Trust is not only a short-term issue but the most significant long-term barrier for realizing the potential of crowdfunding. The aim of this paper is to bring an alternative reading contributing to the existing literature on crowdfunding by giving special attention to the core but neglected element of trust. The originality of the study is founded on the fact that to the best of our knowledge no studies on crowdfunding trust exist. We develop and test a model of initial trust to explain which factors lead to crowdfunders’ trust towards a crowdfunding project. Data for the study will be collected through questionnaires administered in the context of an online experiment.