Does the crowd mean business? An analysis of rewards-based crowdfunding as a source of finance for start-ups and small businesses

Purpose: The purpose of this paper is to investigate the extent to which rewards-based crowdfunding really does provide financial support for start-ups and small businesses relative to other types of activity such as creative and cultural projects. Design/methodology/approach: The paper reports findings from a series of multiple regression on a unique data set covering around 205,000 rewards-based crowdfunding projects across a number of leading platforms in the USA, the UK and Canada. Findings: The authors report two main findings. First, rewards-based crowdfunding is highly inequitably distributed and that success is concentrated within a relatively small number of platforms and campaigns. Second, crowdfunding campaigns explicitly related to business perform relatively poorly compared with those in other categories; particularly those in creative areas such as music and dance. Originality/value: These findings call into question the extent to which rewards-based crowdfunding really is a means by which significant numbers of start-ups can bridge gaps in the provision of finance.