Financing sustainable entrepreneurship: Unpacking the role of campaign information and risk disclosure in reward-based crowdfunding

Abstract

Understanding how the descriptions of crowdfunding campaigns, and particularly the information on risks, affect the campaign success of sustainable enterprises remains a critical gap in the literature on entrepreneurial crowdfunding. This study analyzes how campaign information and risk disclosure affect the campaign success of sustainable enterprises. Using a dataset comprising 98,528 crowdfunding campaigns on Kickstarter, which introduced a dedicated section on ‘risks and challenges’ in 2012, we find that the crowdfunding campaigns of sustainable entrepreneurs are generally less successful than those of conventional ventures, and that they particularly struggle to grow the number of backers. Moreover, our results indicate that the success rates of sustainable and conventional campaigns are differentially influenced by the comprehensiveness of campaign information and risk disclosure. Our post-hoc explanations suggest that the positive, trust-building effects of sustainable entrepreneurs’ risk disclosure outweigh the negative, dissuasive effects.