A copy of the presentation slides from my recent presentation at the Fox School of Business, about my research on crowdfunding.

1. Gordon Burtch AnindyaGhose Sunil Wattal Analyzing Contribution Behavior in Crowdfunded Markets October 7th, 2011

2. A Crowdfunding Example Investors Get: Money The Idea: Revolights Altruism (Warm Glow) Raised: $215,621 From: 1,442 People Budget: $43,500 Social Image

3. Why is This Important? Crowdfunding is Going Mainstream Obama’s American Jobs Act Specifically Refers to Crowdfunding Entrepreneur Access to Capital Act (H.R. 2930) Under Review NOW Seeks to establish exceptions to SEC regulations for crowd-funded sale of equity stakes Policy, marketplace design will become increasingly important Inform Design by Understanding Contribution Behavior in Crowdfunded Markets What determines individuals’ contribution decisions in these markets (Antecedents)? What are the consequences of those decisions (Consequences)?

4. Examples of Crowdfunding Markets

5. Crowdfunded Online Journalism Private contribution toward a public good (Hamilton, 2003; Kaye and Quinn, 2010; Aitamurto, 2011) Two Types of Models for Private Contribution to a Public Good That Incorporate Observation of Others Substitution models and reinforcement models Mixed empirical evidence in the literature Data (Spans 2009-2011) Web traffic statistics (proprietary data) Daily contributions to all projects Project details (budget, description, deliverables, etc.)

6. Conceptual Model(s) Antecedents (Arellano-Bond GMM) Consequences (Negative Binomial) Prior Contribution Frequency & Intensity Common Sentiment Social Influence Contribution Decision Readership

7. Findings Antecedents Model Substitutive effect: people de-allocate funds from a project as others contribute more, faster How to mitigate this? Seeding projects, subsidizing contribution? Consequences Model Faster funding spread across more contributors is associated with lower story readership Predictive capacity of these indicators? Use contribution patterns to inform sales forecasting, inventory management.

8. Conclusion Crowdfunded Markets are About to Boom New source of capital for entrepreneurs Regulation and Design Must take into account huge potential for social influence – in our case, to overcome/address the substitutive effect Consider potential ancillary benefits (forecasting project performance)

9. Questions? Or Comments?