Understanding the Role of Social presence in Crowdfunding: Evidence from Leading U.S. And German Platforms

As a novel opportunity to acquire capital from the masses, crowdfunding has attracted great attention in academia and practice. So far, little is known about the factors that promote the success of crowdfunding projects, however. In this paper, we examine in how far the social presence perceived on a project’s website influences the success of the respective crowdfunding project. Based on a data-driven analysis of 2.000 project websites from the largest crowdfunding platforms in the U.S. and Germany, we show that the perceived social presence has a significant influence on the success of crowdfunding projects. The obtained results indicate that using socially rich pictures and a socially rich description in the project presentation positively affects the success of a crowdfunding project. A socially rich profile page of the founder(s) in contrast appears to have a rather limited effect. The success of crowdfunding projects seems to be dependent on the participation behavior of the founder, however. Our results indicate that having backed other projects positively influences the success of one’s own initiative. The number of answered comments might have a negative effect on the success of the initiative, though.