Technology project summaries as a predictor of crowdfunding success

Abstract

Crowdfunding has emerged in recent years as an important alternative means for technology entrepreneurs to raise funds for their products and business ideas. While the success rate of crowdfunding projects is somewhat low, scholarly understanding of what distinguishes projects that reach their fundraising goals from those that fail remains incomplete. Further, studies on crowdfunding success often examine a number of variables that make predicting success a challenge for entrepreneurs willing to use crowdfunding. This study uses topic modelling on a data set of over 21,000 technology projects from Kickstarter to investigate if short-text project summaries can reveal predictors of fundraising success on crowdfunding platforms. The results indicate that compared to those that fail in fundraising, project summaries of successfully funded technology projects put forward more trendy topics, use wording that reflects novelty, and focus on solving a social problem. Our results contribute to theory and practice by suggesting the importance of summarizing project content for crowdfunding success.