In this study, we set out to examine the motivation of backers to pledge for rewards in the distinct communities of cultural and commercial backers. Leveraging SDT (Ryan and Deci
2017), our study points to fundamental motivational differences in both communities. Commercial backers appear as early-customers who search for good product deals. Cultural backers, on the other hand, are keen to become part of the cultural community and derive utility from rewards that allow engagement with the cultural community. Surprisingly, our results suggest that altruism and selfless support to help others is of low relevance in either community, in contrast to previous findings. The main differences in both communities relate to the importance of pecuniary and community rewards. The relative effect of price discounts is at least seven times higher for motivating commercial compared to cultural backers. However, this result must be put into context: It does not suggest that pecuniary rewards are irrelevant for cultural backers. Cultural backers also want to purchase the project’s main offering such as a canvas or theater tickets, and they also appreciate price discounts, but much less than commercial backers. Unique in the cultural backer community is the backers’ intrinsic need for relatedness. In contrast to commercial backers, cultural backers pledge more frequently for community rewards due to their desire to feel meaningfully connected with the entrepreneurs and become an active part of the cultural value creation process.
5.1 Theoretical and practical contributions
Our paper makes several contributions to the academic literature on crowdfunding and research on cultural entrepreneurship. First, our study adds to the growing literature on backer motivation in crowdfunding. While crowdfunding research has provided a clear picture for intrinsically motivated backers in the prosocial microlending context (Galak et al.
2011; Allison et al.
2015) and extrinsically motivated investors in equity crowdfunding (Ahlers et al.
2015; Kleinert et al.
2020), the picture is more blurred in reward crowdfunding. The evidence is inconclusive with several studies pointing to extrinsic financial motives of backers (Lin et al.
2014; Cholakova and Clarysse
2015), while other studies point to intrinsic motivations such as help others or become part of a community (Gerber et al.
2012; Kuppuswamy and Bayus
2017; Nielsen and Binder
2020). Our study introduces a new approach in that we study the central element of SDT and reward crowdfunding, that is, rewards that appeal to the intrinsic and extrinsic motivation of individuals (Deci et al.
1999). Our results contribute to the ongoing discussion by challenging the predominant notion of homogeneous backer motivation and the attendant relevance of extrinsic and intrinsic factors in reward crowdfunding.
Our results are pointing to a salient relevance of backers’ extrinsic motive to pledge; the main product on offer motivates backers to pledge, and backers are particularly responsive to pecuniary benefits such as price discounts. Furthermore, symbolic rewards that correspond with altruistic intrinsic motivation to help others (Gerber et al.
2012) are not relevant for backers’ decision to pledge. Nevertheless, our study makes a significant contribution to the scientific discourse in that we show that backers should not be considered as a homogenous group. Previous studies have often disregarded the industry heterogeneity in reward crowdfunding (Lin et al.
2014; Cholakova and Clarysse
2015). In this regard, Cholakova and Clarysse (
2015, p. 160) have invited future research to investigate the backer motivation for “projects from different sectors, such as the social and the creative ones.” Our study corresponds to this call and shows that distinguishing among different backer communities is crucial to understand their motivation. For example, our empirical results highlight that the need for relatedness (Ryan and Deci
2000b) is considerably more prevalent for the group of backers who support projects from the cultural compared to commercial sectors. Cultural backers want to engage in their community, whereas this motivation seems irrelevant for commercial backers. Furthermore, not all backers perceive extrinsic rewards as equally motivating; while they are essential to motivate commercial backers, they are significantly less relevant in motivating cultural backers. This finding is of interest for future research on the crowdfunding context and underlines the need to consider the heterogeneity of backers in cross-sectoral crowdfunding settings more carefully.
Second, our study adds to the recent conversation on crowdfunding communities. Some studies have emphasized that the community of backers has a central role in crowdfunding (Belleflamme et al.
2014; Josefy et al.
2017; Murray et al.
2020), yet the conversation of backer communities has only started. For instance, Belleflamme et al. (
2014) suggest that communities differ from reward to equity crowdfunding. Josefy et al. (
2017) show that within reward crowdfunding, similar campaigns are typically supported by specific communities. The authors stress that these communities consist of like-minded individuals with a common interest and shared values. In our study, we argue that communities will form around the different purposes of the entrepreneur, that is, entrepreneurs who seek to establish a profitable business (Parhankangas and Renko
2017) or entrepreneurs who are less devoted to establishing a profit-oriented venture but instead seek the creation of cultural values (Dacin et al.
2010). We introduce and compare two distinct communities: cultural and commercial backers. These two distinct backer communities derive fundamentally different utilities from backing projects and appreciate different consumption values (Sheth et al.
1991; Sweeney and Soutar
2001). Commercial backers behave similarly to early-customers and share an interest in new and functional products: They require a financial incentive to support a project. Interestingly, the classical consumption values such as functionality and price are less relevant for cultural backers. They are less responsive to pecuniary benefits and appreciate becoming an active part of their community and contributing to the process of cultural value creation. Thereby, our study conforms with the call for research by Josefy et al. (
2017, p. 177), who invoke scholars to investigate “additional attributes of crowd communities that impact the success in this new and exciting form of venture funding.” Our study corresponds to this call by showing that an important attribute in crowdfunding communities is the utility backers derive from pledging. Accordingly, different backer communities vary in their motivation and, therefore, respond differently to pecuniary and community rewards.
Third, entrepreneurs from the arts, the creative and cultural sectors—so-called cultural entrepreneurs, are a distinct type in the entrepreneurship landscape whose principal motive is to establish something of cultural value (see Dacin et al.
2010 for a discussion). Previous research has focused primarily on commercial entrepreneurs and more recently on social entrepreneurs and how both types of entrepreneurs mobilize resources (Parhankangas and Renko
2017). Cultural entrepreneurship, however, has received little scholarly attention in the mainstream entrepreneurship literature, despite their relevance for regional development, urban renewal, and revitalization (Bürger and Volkmann
2020). In particular, how cultural entrepreneurs can access early-stage financing is an important question (Konrad
2018) with practical relevance, given that in contrast to commercial entrepreneurs, funding options for entrepreneurs operating in the arts, creative, and cultural spheres are scarce (Baumol and Bowen
1993; Throsby
1994; Stevenson et al.
2019). Our study demonstrates that reward crowdfunding can be a promising way to finance new cultural ventures. Concretely, we advance the understanding of the role of community for cultural entrepreneurs. While we know that cultural communities are central for individuals to become self-employed in the cultural sectors (Woronkowicz and Noonan
2019), we show that community involvement is an essential asset for cultural crowdfunding campaigns.
Finally, our study provides actionable implications, especially for practicing entrepreneurs. Knowing which reward characteristics trigger pledges is crucial for entrepreneurs when designing the reward portfolio for their crowdfunding campaign. By providing discounts as rewards, both commercial and cultural entrepreneurs increase the likelihood of attracting backers. Every project in our sample offers at least one symbolic reward in their portfolio; however, these rewards play a minor role in all funding campaigns. Overall, our study shows that backers of both project types do not support projects without return expectations. However, commercial backers are much more similar to regular consumers and care about price and functionality. In contrast, cultural backers also seek additional satisfaction through participation and involvement with entrepreneurs and other backers.
5.2 Limitations and avenues for future research
This paper is not without limitations, which, together with our findings provide fruitful avenues for future research. Our study is limited to the Startnext categories arts, theater, technology, and invention. Although this categorization is established (Throsby
2008), the results might not be representative for all cultural and commercial projects. In particular, we believe it is fruitful to more closely study differences between backing communities for campaigns from more commercially oriented cultural industries, such as in film, music, design or gaming, where entrepreneurs have the potential to offer scalable products and which resemble more conventional forms of entrepreneurship (Dacin et al.
2010).
Relatedly, recent crowdfunding literature has considered hybrid ventures, i.e., entrepreneurs pursuing multiple causes simultaneously (Moss et al.
2018). We accounted for hybrid ventures by considering whether crowdfunding campaigns in our sample were assigned to more than one category. On Startnext, entrepreneurs who are pursuing social motives typically indicate “Social Business” as a primary or secondary category; however, this was only the case for a minor number of projects and did not affect our results. We believe that future research can use our findings as a starting point to investigate the backer motivation for other purpose-driven campaigns, such as sustainable, social, or hybrid projects. Our results show that commercial backers constitute a community motivated by extrinsic pecuniary rewards, in contrast to cultural backers who form a community motivated by community rewards. It is conceivable that “social backers” or “sustainability backers” form distinct communities too. For instance, altruism and symbolic rewards may be more central for backers of social or sustainable projects.
An additional limitation might relate to our dataset. Reward crowdfunding studies predominantly rely on Kickstarter data (Courtney et al.
2017; Josefy et al.
2017; Parhankangas and Renko
2017); we use data from the largest German crowdfunding platform Startnext as a promising alternative. However, this platform does not allow us to observe social relationships among individual backers and project creators. For example, backers might have been project creators themselves and repay the support they received for their campaign and, thus, pledge for a project out of reciprocity (André et al.
2017). It remains an avenue for future research whether this type of reciprocal giving accounts for a significant fraction of backing decisions.