||Traditionally, start-up companies receive funding from venture capital, business angels or bank loans. Recently crowdfunding platforms add a new funding channel for new ideas, creative projects and attractive products from the general public.|
Why people invest in crowdfunding projects is an interesting issue. Previous research has investigated several factors, such as funder's motivation and creator's characteristics, but not much has studied the underlying mechanism that affect the investment decision. In this research, we examine the issue from the relationship perspective. In particular, we focus on the role of trust in the investment decisions and factors that may affect funder's trust.
An experiment was designed and conducted based on historical crowdfunding projects in FlyingV, a major crowdfunding website in Taiwan. Our findings show that :(1) Creator's expertise, creator's reputation, project information quality, similarity and institution-based trust affect the funder's trust on project creators; (2) Creator's expertise is the major reason for people to build the trust; (3) Trust on creators affects the funder's intention to invest in crowdfunding projects; and (4) The revealed investment intention and the eventual fundraising success have significant correlations.