We quantify financial returns to backers in reward-based crowdfunding projects on Kickstarter and show that such investments provide profitable opportunities in addition to non-monetary benefits. The average unconditional annualized return is 11.5% and the average return on successful projects is 30%. Hence, backing money near the end of a campaign, when the probability of success is already high, is a profitable strategy. The most attractive is the Design category, where successful projects yield 73%, on average. Short-term projects are more profitable than long-term ones. Financial return is an important type of extrinsic motivation in reward-based crowdfunding, which has generally been neglected in academic literature. Reward-based crowdfunding outperforms other forms of crowdfunding and other common alternative investments.
Dobrynskaya, V.; Grebennikova, J. Financial returns in reward-based crowdfunding. Economic Analysis Letters, 2023, 2, 27. https://doi.org/10.58567/eal02030001
Dobrynskaya V, Grebennikova J. Financial returns in reward-based crowdfunding. Economic Analysis Letters; 2023, 2(3):27. https://doi.org/10.58567/eal02030001
Dobrynskaya, Victoria; Grebennikova, Julia 2023. "Financial returns in reward-based crowdfunding" Economic Analysis Letters 2, no.3: 27. https://doi.org/10.58567/eal02030001
Dobrynskaya, V., & Grebennikova, J. (2023). Financial returns in reward-based crowdfunding. Economic Analysis Letters, 2(3), 27. https://doi.org/10.58567/eal02030001
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