Dissertation
Essays on fundraising through crowdfunding and initial coin offering (ICO)
University of Iowa
Doctor of Philosophy (PhD), University of Iowa
Summer 2022
DOI: 10.25820/etd.006835
Abstract
Crowdfunding and Initial Coin Offering (ICO) enable entrepreneurs to raise capital from the crowds. Despite the large number of backers, these campaigns fail at a higher rate than they succeed. According to Kickstarter, the success rate of projects launched on the platform as of July 2022 is approximately 40%. Thus, identifying the factors contributing to the success of startups on these two platforms is of paramount importance. As with crowdfunding campaigns, which present their ideas in the form of stories and videos on their web pages on crowdfunding portals (e.g., Kickstarter), ICOs introduce their ideas in the form of whitepapers. By analyzing these sources of information and extracting informative features, we can gain a better understanding of the reasons for the success or failure of these campaigns. Through the use of natural language processing (NLP), econometric and machine learning models, this dissertation aims to analyze the content of crowdfunding campaigns and ICO whitepapers.In the first essay, through applying natural language processing, we illustrate how entrepreneurial narratives could serve as a powerful vehicle to influence the funding outcomes of ICOs. We show that the structure of whitepapers is effective in reducing the information asymmetry between ICO founders and backers leading to increased amounts of funds raised.
In the second essay, we examine the impact of existing campaigns on the success of upcoming campaigns. Specifically, we study how future campaigns can learn from prior campaigns and how they are affected by competition through the presence of concurrent campaigns. We propose a Varying Coefficient Model - a natural alternative to linear models where coefficients are expected to change across different groups – to analyze these effects. Precisely, we study how the magnitude of these effects changes over time and their contributions to prediction performance.
In the third essay, we propose a multimodal model that incorporates visual features of videos with textual features from project descriptions as well as campaign-level features. Our study examines the contribution of pitch videos to fundraising success. Specifically, we study the significance of visual themes in raising funds, and how they can assist or hinder entrepreneurs in raising funds. We demonstrate how certain themes can benefit some projects while harming others.
Details
- Title: Subtitle
- Essays on fundraising through crowdfunding and initial coin offering (ICO)
- Creators
- Maryam Rahmani Moghaddam
- Contributors
- Weiguo (Patrick) Fan (Advisor)Tong Wang (Committee Member)Kang Zhao (Committee Member)Sanvesh Srivastava (Committee Member)Amrita Nain (Committee Member)
- Resource Type
- Dissertation
- Degree Awarded
- Doctor of Philosophy (PhD), University of Iowa
- Degree in
- Business Administration (Business Analytics)
- Date degree season
- Summer 2022
- DOI
- 10.25820/etd.006835
- Publisher
- University of Iowa
- Number of pages
- xii, 148 pages
- Copyright
- Copyright 2022 Maryam Rahmani Moghaddam
- Language
- English
- Description illustrations
- illustrations (some color), tables, graphs
- Description bibliographic
- Includes bibliographical references.
- Public Abstract (ETD)
Fundraising is an imperative phase in developing startups which ensures their success. Entrepreneurs usually seek funding from multiple sources such as family and friends, financial institutions, angel investors, and so on. It is also possible to raise funds directly from the crowd. Through crowdfunding and initial coin offering (ICOs), entrepreneurs are able to raise capital from the crowd. These entrepreneurs present their startups through the information they provide on their webpages. Videos, text, and images are the types of information provided on crowdfunding platforms such as Kickstarter. Concerning ICO startups, whitepapers are the primary source of information.
In this dissertation we analyze different types of information provided by the campaign creators to understand the factors affecting their startups. In the first essay of this dissertation, we examine the impact of the structure of ICO whitepapers on the number of backers attracted. In the second essay, we study how crowdfunding campaigns can affect each other through learning and competition. In the third essay, the focus is on the analysis of Kickstarter pitch videos. Throughout this essay, we examine the contribution of different themes present in these videos to the fundraising outcome of the campaign.
- Academic Unit
- Tippie College of Business
- Record Identifier
- 9984285346202771
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