California Management Review
Publishes Special Issue on Crowdfunding

February 17, 2016

In 2014, musician and entrepreneur Jack Conte published a blog post describing the financials of his band Pomplamoose’s 28-day U.S. tour. Conte explained that despite selling out shows at many historic venues, the band actually lost over $11,000 on tour, providing evidence of the decline in the music industry. To combat this trend, Conte founded a new crowdfunding platform, Patreon, that allows supporters to send a defined amount of money to artists each time they release new material. He hoped that this would allow fellow creators to make a living in the new digital economy.

Conte is on the right track. Earlier this month, Patreon raised an additional $30 million in Series B funding. The platform joins a stable of successful crowdfunding websites like Kickstarter and Indiegogo, which have famously funded a wide variety of projects ranging from the production of albums and short films to 3D printers and smartwatches. While Conte’s success cannot be disputed, a major question remains: can crowdfunding become a solution for everybody, or just a handful of outliers?

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New Research on Crowdfunding

Popular opinion suggests that major crowdfunding platforms serve to democratize the process of innovation, enabling entrepreneurs and creators in a way that could not be supported under traditional models. But emerging research paints a more nuanced picture.

The popularity of crowdfunding among entrepreneurs and investors has opened up new opportunities that would not have been possible in the pre-internet era. For example, pre-sales on Kickstarter allow would-be creators to get a sense of demand for their product before investing heavily in development and manufacturing. Other crowd-based platforms like LendingClub actively seek to subvert existing financial institutions by facilitating peer-to-peer lending.

"Crowdfunding offers something other funding mechanisms do not—a way to democratize access to the capital needed to commercialize and distribute innovation."

As a rapidly emerging and evolving phenomenon, crowdfunding is still being studied extensively. A new collection of articles published in the latest issue of California Management Review highlights the strengths and weaknesses of crowdfunding as it exists today.

Table of Contents

Financing by and for the Masses: An Introduction to the Special Issue on Crowdfunding
Lee Fleming and Olav Sorenson

What Problems Does Crowdfunding Solve?
Peter Younkin and Keyvan Kashkooli

Crowdfunding in Europe: Determinants of Platform Creation across Countries
Gary Dushnitsky, Massimiliano Guerini, Evila Piva, and Cristina Rossi-Lamastra

Democratizing Innovation and Capital Access: The Role of Crowdfunding
Ethan Mollick and Alicia Robb

What Goes Around Comes Around? Rewards as Strategic Assets in Crowdfunding
Carina Thürridl and Bernadette Kamleitner

Are Syndicates the Killer App of Equity Crowdfunding?
Ajay Agrawal, Christian Catalini, and Avi Goldfarb

The Present and Future of Crowdfunding
Valentina Assenova, Jason Best, Mike Cagney, Douglas Ellenoff, Kate Karas, Jay Moon, Sherwood Neiss, Ron Suber, and Olav Sorenson

About California Management Review

California Management Review is a leading academic research journal from the Haas School of Business at UC Berkeley. Published quarterly by UC Press, CMR aims to serve as a bridge of communication between those who study management and those who practice it, publishing research-based articles that address issues of current concern to managers.