The potential of crowdfunding for sustainable development: a comparison of sustainable and conventional crowdfunding projects

Crowdfunding bears great potential for sustainable entrepreneurs, who often face difficulties in receiving loans from traditional financing mechanisms. Because such ventures are able to tackle pressing environmental and social issues, they are of interest to researchers, and recent studies have already identified factors that increase their crowdfunding success. However, it remains unstudied as to what potential sustainable crowdfunding holds in contributing towards sustainable development and to what extent crowdfunding projects that are environmentally, socially, sustainability- and conventionally oriented actually differ. Based on a quantitative dataset, 282 investment-based crowdfunding projects were characterised along the entrepreneurship typology suggested by Thompson and colleagues. The results revealed that the marketing function of crowdfunding was prevalent for environmentally oriented crowdfunding projects. Socially oriented crowdfunding projects were identified as small scale compared to other project types, since they aimed for lower funding targets. Finally, conventionally oriented crowdfunding projects mainly used crowdfunding to finance service and organisational innovations. Based on these insights, implications for research and practice are drawn.