Academic literature on factors determining the success of a crowdfunding project is rather limited. However, a few authors have in fact made initial attempts at analyzing some characteristics of successful crowdfunding projects.

The literature review has two parts: literature on success factors in the preparation of the crowdfunding project and success factors during the crowdfunding project.

Starting with the success factor in the preparation time, Belleflamme, Lambert, & Schwienbacher, 2010 for example find that the type of project has an effect on the success rate. In fact, projects that are part of non-profit organizations are more successful than other organizational forms. The authors see the reason for this in the argument made by Glaeser and Shleifer (2001) who suggest that due to the reduced focus on profits, non-profit organizations find it easier to attract outside capital. In addition, Mollick (2014) examines the underlying dynamics of project success and failure and concludes that social network size as well as the project's quality relates to project success. The author further suggests that geography has an influence on project success, reasoning that founders’ proximity to project supporters results in more successful projects. Colombo, Franzoni, and Rossi-Lamastra (2015) empirically investigate the relationship between the early contributions shortly after the launch and the success of the crowdfunding campaign. Cholakova and Clarysse (2015) investigate the motivation of investing in crowdfunding, but not the specific factors of a project. Mollick (2014) argues that potential funders are more likely to select realistic funding goals, as project goals that are too high or too low are not likely to lead to a successful funded project.

The second part of the literature review observes success factors during the crowdfunding project. This observes in detail web presence, the amount of supporters/backers, updates and blog entries, rewards/incentives, and the number of comments.

The following section subsumes different aspects, hereafter called web presence, a term that consists of videos and pictures in the project presentation, a personal picture of the project owner, the existence of a separate Facebook page, or websites.

Wheat, Wang, Byrnes, and Ranganathan (2013) describe the video as the most important part of the funding appeal to potential project backers. Videos should touch the heart of backers and tell a real story about the own project. Mollick identifies the lack of a video as extremely negative, stating how “producing a video is a clear signal of at least minimum preparation” (2014, p. 8). Wheat et al. (2013) make another important point: the video is an opportunity to introduce the project owner or team. Cholakova and Clarysse (2015) describe how backers recognizing a project owner in the video have no positive influence on the project's success. They found out that a personal, emotional relationship between the project owner and the backers is not positively related to the investment in a crowdfunding project (Cholakova & Clarysse, 2015, p. 160).

Zheng et al. (2014) encourage the use of information about the project through various media to improve the communication and the understanding between the entrepreneurs and the backers (sponsors). According to Boeuf, Darveau, & Legoux, 2014, announcements of personal information about the entrepreneur (project owner) including personal pictures are considered positive due to the higher trust and serious support this achieves from the backers. Colombo et al. (2015) point out that crowdfunding platforms are a social environment, and therefore a picture of the project owner underlines the social capital component and boosts the probability of successful projects.

Mollick (2014) points to the increasingly important role of social networks in funding new ventures. Further, authors such as Belleflamme et al. (2014) highlight the importance of Web 2.0 and social networks to facilitate founders’ access to the crowd. A link to the founder's or project's Facebook page, visible on the project description page or the founder's profile, facilitates access to the project's social network page. Interested backers can gain more information on the founder and the project and can easily create awareness of it through liking and sharing the page. The availability of a direct link to the founder's Facebook page is documented in a dichotomous variable that will be used in the models later in this study. Due to the importance of Web 2.0 in crowdfunding (Belleflamme et al., 2014), the existence of a website supplying more information to potential funders should have an effect on project success. Furthermore, Frydrych et al. (2014) argue that information on the founder or the founding organization adds legitimacy to the project, attracting more funders as a result. Hence, the availability of a link to the project's website on the founder's profile or the project description page is coded into a dichotomous variable that functions as an independent variable in this study. Belleflamme et al. (2014) state that strong engagement in social networking activities does not raise the funding amount. On the other hand, Lu, Xie, Kong, and Yu (2014) argue that social networking, especially in the early stage of the project, can strongly raise the probability of a successful project funding. Byrnes, Ranganathan, Walker, and Faulkes (2014) highlight e-mailing to social networks as a driver of successful projects.

Finally, considering the high relevance of the communication between the project owner and the crowd, the classical theory of communication is also important. In his four-sided model, Schulz von Thun (2000) reveals that every piece of information between the sender (in our case the project owner) and the receiver (crowd) consists of four facets: facts, self-revealing, relationship, and appeal. Applying this theory to crowdfunding, challenges in communication can lead to poor funding results (see Fig. 2). Therefore, the transmission of a mix of facts, personal information, customer relationship, and the call to action itself are the fundamental duty of the project owner and determine the success of projects (e.g. Hui, Greenberg, & Gerber, 2014; Wu, Wang, & Li, 2015).

Fig. 2.

Theory of communication by Schulz von Thun (2000) and the adaption to crowdfunding.

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Colombo et al. (2015) underlines the importance of strong support by backers in the early stage of the project, especially when the quality of the product is unclear. Whenever potential backers recognize that funding has already taken place, they are more encouraged to donate. The information about the amount of backers and the money collected are clear indicators of interest and are therefore highlighted by the platforms. According to Kuppuswamy and Bayus (2014), backers typically join projects in the very early stages and in the end.

Xu et al. (2014) underline the importance of updates and blog entries. The tendency here is clear: updates are crucial. Projects with frequent updates can almost double the probability of successful funding (32.6% vs. 58.7%) in their specific cases. Xu et al. compare the importance of updates with the initial presentation of the project on the platform. An intensive communication between the project creator and the community is “more predictive of success than the representation of the project page” (Xu et al., 2014, p. 9). Kuppuswamy and Bayus (2014) discover that recent updates, especially in the final stage of the crowdfunding project, have a positive influence on achieving the project goal in how they awaken emotions and excitement from backers.

In the different dimensions of crowdfunding, backers can receive either material rewards (Vukovic et al., 2009) or immaterial rewards through social acknowledgment (Kazai, 2011). Recording the number of rewards backers receive in gratitude for supporting a project allows conclusions about backers’ motivation for participation. Steinberg (2012) denotes the incentives as the most important motivation for participating; it is therefore the all-important aspect for a successful project. Wheat et al. (2013) shows how incentives are expected and should have a personal connection to the project. According to Wheat, public acknowledgment without material rewards is the most promising pathway. The least promising form on the other hand is not offering any incentives, while a middle way is offering material incentives. Colombo et al. (2015) underlines the importance of incentives, especially for generating backers in the very early stage of the project.

The number of comments on a project matter as well. Antonenko, Lee, and Kleinheksel (2014) point out that intensive communication positively impacts successful projects on the project website, as well as reacting promptly to questions, posting own questions, and providing frequent status updates.

Table 1 displays the intermediate result produced from fsQCA. Note that the parsimonious result is exactly the same as the intermediate one, indicating that the conditions of the causal paths in Table 1 are central conditions rather than peripheral (see details in Fiss, 2011).

Three causal configurations are found to be sufficient for high achieved funding in percentage with acceptable consistency levels. The consistency index serves as significance (Ragin, 2008a) and supports an argument of sufficiency (Ragin, 2009). In addition, the unique coverage for each causal path recognizes that each path offers a unique contribution to the explanation of the crowdfunding success. Coverage, like strength, measures the extent to which the configuration accounts for the outcome (Ragin, 2008a). In short, these three solutions constitute a high consistency (.85) and explain over 60% of the outcomes.

The solutions in Table 1 indicate that the amount of backers is evidently the most important condition for high achieved funding in percentage. This is a necessary condition regardless of how other conditions combine. Put more specifically, more backers represent more cash flow. The amount of backers and the number of comments jointly constitute a causal path to successful crowdfunding without regard to other conditions (i.e. path 1). The comments can be regarded as the public statements from a brand's spokesperson, and thus function as a marketing tool for influencing the potential backers’ perceptions of respective projects. Founders can also update information on their projects via comments. Accordingly, path 1 with the highest unique coverage signifies that the breadth and the depth of the crowd's interest are sufficient to achieve funding. While the amount of backers denotes how many people show interest in the projects (i.e. the breadth), the number of comments represents how much attention people can pay to the projects (i.e. the depth).

However, when the number of comments is not taken into account, founders’ updates and blog entries become more significant (see path 2 and path 3). In other words, founders need to maintain the crowd's interest by updating relevant information about the projects on their blogs. Web tools such as videos, pictures, and Facebook appear to play an important role in updating information and keeping the crowd's interest. Again, when founders lack these tools, they need to design an incentive plan for backers to enhance their interest (path 2). On the other hand, when founders are incapable of offering rewards or incentives to potential backers, they have to effectively utilize web tools in order to grab the crowd's attention (path 3).

Furthermore, a comparison of path 2 and path 3 shows that these configurations involve a pattern of substitution. Web presence and rewards/incentives here appear to substitute for each other. Simply put, the presence of one of the conditions combined with the absence of another constitutes a part of causal conditions. While the web presence represents an intangible pull for attracting the crowd's interest, the incentive plan acts as a tangible motivation for encouraging the potential backers to take action. These two conditions cannot be present simultaneously when achieving successful crowdfunding.

A comparison across all solutions also reveals that the number of comments can substitute for the portfolio of web presence, updates and blog entries, and rewards/incentives. Because founders can also market their projects or update information by posting comments, this means that they have no need to focus on marketing their projects by using web tools, updating information, or designing the incentive plan when they frequently post comments. In sum, these solutions indicate that these conditions are critical factors, even though founders should appropriately combine these conditions to achieve funding.

The following discussion comes from the two-part literature review of success factors in preparation of and during the crowdfunding project and the insights gained through our analysis.

Crowdfunding is fundamentally changing the way new projects access funding. In daily business, the focus is very much on equity-based crowdfunding projects. However, reward-based campaigns have quickly become the dominant type of crowdfunding all over the world. In 2012, 14% of funding volumes were reward-based, compared to 4% of equity-based crowdfunding (Wilson & Testoni, 2014). Part of this high growth can be attributed to the agile nature of reward-based campaigns, where the return on the contribution – be it a product, service, or acknowledgment – is clear and defined a priori, not bound by the exit liquidity concerns of an equity investment.

In answer to the research question, it is important to remember that success factors during the projects are multi-layered. Mollick (2014) finds that social network size as well as the project's quality relates to project success. Hence, communication of crowdfunding projects appears to be a key element for their success. We find that videos, pictures, blogs, and other online elements in many cases play an important role, as expected by the analysis of earlier research. However, the relationship to the crowdfunding campaigns’ success is not automatically positive, and sometimes is even negative: in path 1, there is no influence; in path 2, it is an inhibiting factor, while in path 3, it is a main argument for success.

So depending on the causal configuration of realized projects, it does not always make sense to use all available communication instruments. This is in several cases contradictory to earlier research: Wheat et al. (2013) and Mollick (2014) found the lack of a video to be negatively related to crowdfunding success. Boef et al. (2014) as well as Colombo et al. (2015) point out that a picture of the project owner boosts the probability of successful projects. Belleflamme et al. (2014) highlight the importance of Web 2.0 and social networks, while Antonenko et al. (2014) research that successful projects are positively affected by intensive communication on the project website, reacting promptly to questions, posting own questions, and giving frequent status updates. The importance of updates is supported by Xu et al. (2014): projects with frequent updates can almost double the probability of successful funding. Regarding the use of social media, earlier research reveals different directions as well. Belleflamme et al. (2014) note that social networking activities do not raise the funding amount. On the other hand, Lu et al. (2014) argue that social networking, especially in the early stage of the project, can strongly raise the probability of successful project funding. Byrnes et al. (2014) highlight e-mailing to social networks as a driver for successful projects.

When it comes to incentives, we can only partly support Steinberg (2012) and Colombo et al. (2015) who identify incentives as the key elements of a successful crowdfunding project. We even find all three possible variants: rewards can be key for success (path 2), can have no influence (path 1), or can even be harmful (path 3). This might be explained in general by the fact that incentives are expected in any case by those involved (Wheat et al., 2013). Especially in the case of path 3, it might be just too much to do extensive communication with videos, pictures, social media, updates, blogs, etc. when supporters are sufficient in the first place.

The only constant success factor for crowdfunding success is the number of supporters and backers, who may receive either material rewards (Vukovic et al., 2009) or immaterial rewards in the form of social acknowledgment (Kazai, 2011). This supports the research done by Colombo et al. (2015). This support is considered to be a key success factor in all of the paths.

With the three different paths for successful crowdfunding projects in mind, this strongly confirms the adapted communication theory of crowdfunding based on the original theory of communication by Schulz von Thun (2000). The heterogeneity of the crowd requires a broad information approach. As a result, renouncing one of the four elements (detailed description of the project including pictures or videos; personal information about the project owner; networking; and a call for action) may undermine the success of a project.

It finally is important to remember that earlier research did not have such a broad approach when it came to analyzing crowdfunding success. So this might be the reason why their results differ in individual sections.

Reward-based campaigns provide funders the opportunity to pre-purchase a product or service, and the reward structure often also includes the option to support the project through a donation without actually pre-purchasing any product or service. This different reward structure offers options to founders to establish different relationships with their audience: some funders fit well into the potential customer profile, while others take the profile of a fan or project supporter. While the pre-purchasing customer profile might behave in accordance with new product launch marketing theory, the additional source of variation introduced by the fans of a project (regardless of whether they are pre-purchasing or not) changes the dynamics of the crowdfunding campaign evolution, modifying what would otherwise be a classic marketing plan for a new product or service.

Based on prior research on crowdfunding dynamics, we expect to see campaign success determined by whether there was a strong (funding) wave as the project started (Etter, Grossglauser, & Thiran, 2013), together with the surge of a high (social) networking effect – virality of the project – that would drive the project funding through to completion (Mollick, 2014). What we find is that the crowdfunding campaign dynamics are far more complex, especially in terms of the influence of crowdfunding communication approaches, which the last section of this paper discusses.

With our results in mind, we propose a typology of crowdfunding campaigns for future consideration:

• (a)

  Communicator: this type yields a strong social network and fans, using online marketing and public relations. It helps the project to “turn heads.” Nevertheless, a lackluster product or service keeps visits-to-contributions ratios low, and most of the funds come from symbolic contributions and/or reward offerings. Put another way, the communicator is rewarded for his/her strong effort as part of a rather weak project. This strategy comes from path 3 identified in our research.

• (b)

  Networker: funders start building virality through their personal network and their community, and the project gradually draws more attention as founders manage to fit their offering to what ticks with their audience through blogs and updates. Summarizing the networker, the focus is on already-known potential founders and the intensive work with them, keeping the information flow running and offering attractive rewards. This approach can be referred to as path 2.

• (c)

  Self-runner: an attractive product is the driver of virality with an active community of backers; the success of the launch gets media attention, a high number of comments, and brings additional fans to the project in addition to the potential customers. It appears here that the product is simply outstanding, and therefore no self-determined online activity is needed to lead the project to a successful funding. The work for this kind of project appears complete before the crowdfunding project starts, with the campaign seen as given. Here, path 1 serves as a basis.

It is therefore important before starting a crowdfunding project to consider which strategy fits best with the idea, and the founder or the founding team in particular. A distinctive use of communication tools like social media, pictures, rewards, etc. is achieved based on this decision.

The chart below (Fig. 3) summarizes the findings in this article, and serves as a basis for practical guidelines which are useful for the choice of a strategy. The axes are required sales effort and project added value.

Fig. 3.

Typology of crowdfunding campaigns.

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The following practical guidelines for future project owners can be derived based on this threefold division:

Start creating new projects with the simple goal of generating added value for third parties, not for the project owner. Added value can be multi-layered, and include everything from knowledge, entertainment, experiences, emotion, or quality of life.

Get a feeling for the project. Start discussing the idea in a very early stage with your close peer group in an effort to identify market demand and optimize the project. Do this, and it will be easy to recognize a “Wow!” project and a “tough” project.

Keep the desire for continuous development, for example with the help of sample through-runs, fixed feedback routines, pre-testing, or re-designing the project if needed. Consequently re-examine the project. Most of the hard work comes before the crowdfunding project is even online.

Win the crowd before starting the project online. Start the communication with family, friends, and colleagues early – they are crucial for the first stage of the campaign and therefore for the degree of attention to the whole project. If you feel strong restraints, invest time and effort in offering attractive rewards and setting up online tools.

Create constant updates about optimization, news, innovation, experiences, and feedbacks – the crowd will show their appreciation for improvements and a consistent work ethic via their funding.

As with every research, our approach has some limitations. First, we focus our analysis on a reward-based platform. If the same analysis examines another platform, for example with an equity-based or donation-based focus, results might differ. Applying our approach to other types of crowdfunding platforms, especially in an international and interdisciplinary context, might bring new insights into the topic of crowdfunding success. To be sure, this is the main shortcoming the authors see with this research, as equity-based crowdfunding investors will definitely have different motivations to invest than people interested in reward- or donation-based projects. Another point is that we only have objective data available, that is, observations from VisionBakery's website. Participants however could state why they choose to invest in specific projects. Here, additional qualitative research, for instance interviews with investors and companies, is a good idea. Our findings are generalizable to a limited degree because the data collection stems from a single website and its research focus is set on Germany. Comparisons with platforms from other European countries might contribute to a better understanding of the link between crowdfunding motivation and the local economic situation. In any case, the shortcomings here ultimately offer interesting avenues for future research.