Social Media and Funding of Crowdfunded Projects : Investigating the Moderating Role of Entrepreneur and Project Characteristics

Entrepreneurs are increasingly focusing on understanding and managing their social media strategies to optimize crowdfunding campaign to succeed. While much of the current crowdfunding literature focus on the roles of social media engagements on funding performance of crowdfunded projects, in this study, we examine how contextual factors such as product and entrepreneurs characteristics moderate the influence of social media on funding performance. This study examined the effects of Facebook and Twitter engagements on funding performance in the reward-based crowdfunding. Using a dataset of technology crowdfunded projects, we investigated whether Facebook and Twitter engagements affect funding outcomes and if so, how the two interact with each other and their influences vary by project and entrepreneur characteristics. We found that both Facebook and Twitter engagements positively affect funding, but the two weaken each other’s impact, particularly for hardware products. Additionally, Facebook engagements had a larger effect on funding outcomes in early days of a campaign driven by its pre-launch efforts whereas Twitter engagements had a larger effect in later days. Furthermore, our findings indicated that the Facebook engagement is more influential for hardware products. An entrepreneur's internal social capital built inside the crowdfunding platform also weakened the effects of Facebook engagements generated outside the platform whereas Twitter engagements on subsequent funding had less influence on experienced entrepreneurs. Our findings suggest that Facebook mainly serves as a channel to show the significant commitment of entrepreneurs to their projects and increase funder engagement while Twitter serves to spread and share information about projects