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CROWDFUNDING AND INNOVATION
Author(s) -
Hervé Fabrice,
Schwienbacher Armin
Publication year - 2018
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/joes.12274
Subject(s) - crowdsourcing , product (mathematics) , product innovation , open innovation , new product development , business , marketing , entrepreneurship , process (computing) , economics , venture capital , innovation process , capital (architecture) , industrial organization , finance , computer science , work in process , geometry , mathematics , world wide web , operating system , archaeology , history
Entrepreneurs have started relying on crowdfunding to fund their investments. This paper surveys the literature linking crowdfunding with innovation in entrepreneurial firms. Two distinct areas are discussed. First, crowdfunding has the potential to foster innovation by offering new sources of capital to innovation‐driven firms and thereby reduce the funding gap for innovative startups. Second, crowdfunding offers a way for the crowd to participate in the innovation process by providing feedback to the entrepreneur. This feedback can take various forms, including providing ideas on the development of the product during and after the campaign (in the spirit of crowdsourcing), and providing valuable information on the future demand for the new product.