Liability of Newness, Startup Capabilities and Crowdfunding Success

Though crowdfunding has emerged as a cost-effective means to market innovative products and a channel for financial resource acquisition, our understanding about what makes a successful crowdfunding is still limited. This study is motivated by the presence of the inconsistency that both entrepreneur...

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Bibliographic Details
Published inASIA MARKETING JOURNAL Vol. 21; no. 4; pp. 59 - 76
Main Author Kim, Sahangsoon
Format Journal Article
LanguageEnglish
Published 한국마케팅학회AMJ 2020
Korean Marketing Association
Subjects
crowdfunding
liability of newness
visible and invisible startup capabilities
Crowdfunding
Visible and Invisible Startup Capabilities
Liability of Newness
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Summary:Though crowdfunding has emerged as a cost-effective means to market innovative products and a channel for financial resource acquisition, our understanding about what makes a successful crowdfunding is still limited. This study is motivated by the presence of the inconsistency that both entrepreneurs and investors pay more attention to capabilities required for developing prototype products rather than capabilities needed to deliver the promised products in crowdfunding. By drawing insights from studies about liability of newness and legitimacy in institutional theory, this study argues that startups can overcome the liability of newness, earn investor trust, and successfully complete crowdfunding campaigns by effectively presenting visible and invisible capabilities. This study presents a set of testable propositions predicting the likelihood of crowdfunding success and explains the theoretical and practical value of the proposed conceptualization of startup capabilities.
ISSN:1598-7868
2765-6500
DOI:10.15830/amj.2020.21.4.59