Dealing with Initial Success versus Failure in Crowdfunding Market : Serial Crowdfunding, Changing Strategies, and Funding Performance

Serial crowdfunding is becoming a common phenomenon as entrepreneurs repeatedly return to online crowdfunding to raise capital. Despite the fact that there are a considerably large number of serial crowdfunders in crowdfunding market, relatively little research has been conducted to investigate the presence of learning benefits from a previous to a subsequent crowdfunding project. Two competing hypotheses, drawn from attribution theory and hubris theory of entrepreneurship, were tested in this study to determine the impact of prior success versus failure experience on both subsequent crowdfunding decisions and funding performance. In this study, we focus attention on serial crowdfunders, that is, entrepreneurs who experience launching more than one crowdfunding project. The purpose of this paper is to investigate the role of past experience on subsequent crowdfunding performance. This study also examines whether initial success versus initial failure leads serial crowdfunders to engage in more explorative behaviors (i.e., switching industry) and to take exploitative actions (i.e., adjusting campaign strategies in terms of goal setting and funding option).Our results show that serial creators who experienced successful initial crowdfunding are more likely to explore a new industry or product category in the crowdfunding market and to set a higher target capital for the subsequent campaign when they change a project category