Are we on the same wavelength? Interdimensional signal set and crowdfunding success

Abstract

Research SummaryUsing data from 1899 Kickstarter campaigns (2009–2019), we examine the impact of simultaneous emission of interdimensional signals of human capital and social causes on crowdfunding campaign success. We argue and demonstrate that backers respond positively to human capital signals, as reflected by prior work and entrepreneurial experiences, as they communicate the competencies of the entrepreneurs. Conversely, signaling a high level of commitment to social causes communicates competing demands, thereby reducing entrepreneurs' ability to secure funding. Moreover, when emitted jointly, interaction of these two signals negatively affects campaign success. Our theory and findings provide nuanced insights regarding simultaneously emitted interdimensional signals in crowdfunding context with a structured incentive system, thereby increasing our understanding about the ambiguous nature of bundling human capital with high social cause signals.Managerial SummaryWhen evaluating new ventures in the public sphere, potential backers simultaneously process the complex information emitted by founders (i.e., signals). These signals communicate the unobservable qualities of the founders. In this article, we investigate the independent and joint effects of two signals on crowdfunding campaign outcomes: founder's human capital and their commitment to social causes. We show that while human capital increases campaign success, a high commitment to social cause decreases this likelihood. We further demonstrate that when these two signals are emitted simultaneously, balancing issues between the signals reduce the chances of attaining campaign success in crowdfunding. These findings emphasize the importance for crowdfunding founders and campaign designers to communicate coherent and well aligned signals to ensure campaign success.