Investors in environmental ventures want good money—and a clean conscience: How framing, interest rates, and the environmental impact of crowdlending projects influence funding decisions

Crowdfunding is becoming the most important source for financing new ventures. In particular, it is often used to finance environmentally oriented ventures. Still, it is largely unknown what specifically makes an environmentally oriented crowdfunding project attractive to investors and how entrepreneurs can frame their projects in a way that fosters its attractiveness to these investors. To study how different factors influence the decisions of potential investors and informed by warm glow theory, we conducted a real-choice experiment using choice-based conjoint analysis among a purposefully drawn sample of potential investors (n = 569). The results inform practitioners that with regard to framing, altruistic cues are more effective than egoistic cues, whereas with regard to the actual benefits investors receive, egoistic benefits (i.e., interest payments) are more important than altruistic benefits (i.e., environmental impact). Moreover, we found that different groups of investors exist that seek different benefits. We labeled these groups “profit-maximizers,” “receptive altruists,” and “risk-seekers aiming for the best of both worlds.”