New Article: The language of crowdfunding: An exploratory study of entrepreneurial and other campaigns

Abstract:

Crowdfunding has become an attractive option to raise funds in recent years. Several studies have examined language use in crowdfunding campaigns, and a few have attempted to understand entrepreneurs’ language use on these platforms precisely. All assume that those categorized as entrepreneurial are inherently different from those categorized as other. We aim to explore that assumption while adding to the growing body of literature on the use of language in crowdfunding. We examine how entrepreneurs use language differently than other creators on crowdfunding platforms and how language relates to successful and unsuccessful campaigns for entrepreneurs and other creators. Findings indicate differences in language usage exist between entrepreneurs and other creators and also between successful and unsuccessful campaigns for both groups. However, more than that information is needed to increase the possibility of funding. While there isn’t a magic formula for success, all crowdfunding campaigns appear to have the best chances by balancing the language they use.

Pre-Print URL: https://www.researchgate.net/publication/371919442_The_Language_of_Crowdfunding_An_Exploratory_Study_of_Entrepreneurial_and_Other_Campaigns

Cite as:

Gerstner, T., Taylor, K. P., Moon, L., & Butski, N. (2023). The language of crowdfunding: An exploratory study of entrepreneurial and other campaigns. International Journal of Business Communication, 1–24. https://doi.org/10.1177/23294884231183933

Management Summary:

Acquiring capital to launch a new venture is challenging but it is essential for success. Entrepreneurs have used many creative approaches over the years to find capital, while new sources and methods appear periodically, for instance, shows such as Shark Tank or the proliferation of online crowdfunding platforms. Kickstarter.com is arguably the most well-known of those online platforms. Our article examines how language is used differently by entrepreneurial campaign creators versus those who launch other creative campaigns, for example, authors or artists.

We conducted computer-aided text analysis with the LIWC-2015 software package on 374,045 U.S. Kickstarter campaigns launched between 2009 and 2019 to discover patterns in the use of language by these two different groups of campaign creators and what language was associated with successful campaigns for each group.

What did we find? As expected, entrepreneurial creators showed higher levels of achievement motivation and lower levels of affiliation motivation. This is consistent with work by David McClelland who showed that entrepreneurs are more achievement-focused than corporate managers but it extends that work by showing they are also more achievement-focused than general creatives. In addition, both groups of creators used relatively inauthentic language but entrepreneurial creators were more inauthentic. This could reflect entrepreneurs being more guarded or distant in their language, or it could even reflect more deceptive language. The more inauthentic language, though, led to more successful campaigns.

Demonstrating expertise through more clout language also increased the chances of success for all campaigns. Using power language, though, to demonstrate expertise could backfire if it is used too extensively. So, it appears an entrepreneur should demonstrate their expertise without pushing it too far.

The article offers a number of additional insights on the language of crowdfunding that will help both entrepreneurial and other creators craft more successful copy for their campaigns. Entrepreneurs will always find new ways to acquire capital, but for now, online crowdfunding is an exciting, democratized source of funds. I invite you to download the free pre-print version of the article.