Signaling and success in campaigns of Latin-American crowdfunding
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Abstract
Funding opportunities for entrepreneurships in Latin America are few. Commonly being limited to the use of traditional platforms such as public and private banking, or even informal forms of recollecting recourses, none of this particularly fitted to support early stage entrepreneurship. Because of this, new collection mechanisms have emerged, such as reward-based crowdfunding. However, this mechanism presents large percentages of failure and diminished growth rates in comparison to other regions. This empirical research aims to contribute to the understanding of the factors that make a successful campaign from the perspective of signaling theory. Based on the information collected from 21 804 Latin American campaigns, extracted from eight different countries, of the Catarse, Kickstarter and Idea.me platforms. The results indicate that the use of social networks, number of rewards, multimedia material such as images, videos and gifs, as well as efforts of communication with clients, it being during or after the funding phase; have a positive influence in the success of a campaign. Furthermore, all of these are seldom used by the majority of evaluated campaigns, independent of their country of origin or the nature of the campaign itself. The lessened growth of crowdfunding on the region is understood, is at least in part affected due to the inherent quality
of the projects, where’s a lot of room for improvement to be made.
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