Investors’ responses to linguistic and communication factors in crowdfunding projects: An investigation of foodservice startups

Abstract

Crowdfunding has emerged as an alternative financing method for startups in the foodservice industry. To identify determinants of crowdfunding performance and thus develop attractive foodservice project proposals, this study investigated 1363 project proposals between 2011 and 2022, focusing on their linguistic features such as time orientation, length, readability, and tone. For robust and efficient analysis, Feasible Generalized Least Squares estimation was employed. The findings indicate that past-oriented descriptions increased crowdfunding amount while length and readability had a quadratic relationship. This study also examined two communication tools—project creators’ responses to comments and updates—and found their significant effects on crowdfunding amount. To understand the impact of these linguistic and communication factors on crowdfunding, this study adopted two overarching theories: the framing effect and social presence theory. In addition to the discussion on the theoretical background, this study provides practical implications for foodservice project creators.