Crowdfunding platforms provide a popular route for startups seeking new investment. And new research undertaken at Binghamton University, State University of New York, reveals that funders place more emphasis on the reputation and ethical credentials of the seller rather their potential to actually develop the product.
Ali Alper Yayla, associate professor in Binghamton University’s School of Management, said that “crowdfunding is interesting because you’re literally buying something that isn’t finished from a person who has never made it before. There are no product reviews, and there are no seller reviews”.
And in the study, which showed mocked up crowdfunding campaigns to 300 people, the reactions were consistent. Regardless of the complexity of the advertised product, be it a t-shirt or 3D printer, the respondents were more concerned with integrity than the innovators perceived competence in making the item.
“We found that people worry more about the seller’s honesty than whether the seller actually has the ability and knowledge to finish and deliver on the product,” added Yayla. “People don’t want sellers to just take their money and run.”
And Yayla recommends supplying plenty of information about the people behind the projects, with social media links to their other work, to maximise the potential support.