What Drives the Crowd? Exploring Decision-Making Styles and Motivational Drivers in Entrepreneurship Crowdfunding

Abstract

Crowdfunding is increasingly being considered an innovative platform providing financial solutions for entrepreneurs, businesses, and not-for profit organizations that are facing difficulties in their ventures. While various types of crowdfunding have emerged in literature (e.g., donation-based, equity-based), little is still known on how contributors’ decision-making cognitive styles influence the selection of a particular crowdfunding type. Crowdfunding campaigns, being made, are not effectively leading to the expected results because of poor market segmentation and lack of understanding of crowdfunding decision-making behavior. As a result, entrepreneurs, organizations, and not-for-profit are looking for alternative financial sources to support their campaigns. This study explores how various decision-making styles (rational, intuitive, spontaneous, dependent, avoidant) influence the four crowdfunding types (equity, lending, reward, donation) and the role of motivation behavior in this process. Using a quantitative method approach, a sample of 257 contributors and potential crowdfunders were asked to complete a 47-item questionnaire that measures the various types of decision-making, motivation behaviors, and crowdfunding platforms. The results of the study show rational decision making as mostly associated with different crowdfunding types (except for lending). In addition, both intuitive and dependent decision-making styles are positively associated with each of reward and donation crowdfunding. In contrast, spontaneous and avoidant decision-making styles show no significant association with crowdfunding, where in particular, lending crowdfunding is not considered an option for the contributors with any decision-making style. Findings also demonstrate that rational and dependent decision-making styles exhibit a stronger influence on equity and lending crowdfunding through performance expectancy (extrinsic motivation), while rational and intuitive decision-making styles exhibit a stronger effect on reward and donation crowdfunding through sense of self-worth (intrinsic motivation). This study can help entrepreneurs and organizations to strategically modify their campaigns based on the targeted crowdfunders. Understanding how crowdfunders decide on a type of crowdfunding, shape entrepreneurs to choose strategically what platform to use when raising funds. Identifying the factors behind these decisions can help campaigners coordinate financing methods with their business targets. It also allows crowdfunding platforms to better support users through targeted services and tools. Moreover, policymakers and educators in the field of entrepreneurship can utilize these insights to strengthen educational programs and guide entrepreneurs to make better business financing decisions. By addressing this gap, the study advances entrepreneurship theory, showing crowdfunding as a strategic choice shaped by decision-making.