Behavioral Insights from Crowdfunding Financing: What Do Social Media Ties, Emotional Cues and Sentiment Tell Us?

Abstract

The aim of this paper is to identify the factors that contribute to the successful funding of crowdfunding projects, with a focus on conventional, social media and affective factors. Our unique dataset contains 267,830 Kickstarter projects from the U.S., Australia, Canada, the U.K., and Europe. In addition to determinants based on conventional factors, we study the textual characteristics of a project’s description and comments, including sentiment and emotional cues, extracted using a web scraper. We find that social media factors (such as social networks, comments on projects, the experience and social media capital of the project founder) as well as affective factors (emotional cues and sentiment related to project description) influence the success of projects in addition to the conventional determinants such as the funding goal, funding project duration, and project category. Our results are stable when we control for partial time periods, the geographic origin of the founder, and the founder’s social media capital and experience.