Startup storytelling : an analysis of narrative in rewards and equity based crowdfunding campaigns

Crowdfunding campaigns have experienced explosive growth in visibility and popularity for entrepreneurs seeking early stage funding (Zeoli, 2015). Entrepreneurs create and manage crowdfunding campaigns through web platforms (e.g., Kickstarter, IndieGoGo) that facilitate interaction between founders, funders, and investors. These online platforms offer opportunities for entrepreneurs seeking investment to craft a pitch and utilize storytelling to connect them to networks outside traditional sources of venture capital. Because storytelling is cited as a critical communication skill for entrepreneurs (Martens, Jennings, & Jennings, 2007; Roddick, 2000), research is needed to understand how narratives can produce desirable outcomes such as perceptions of legitimacy and credibility for entrepreneurs and how entrepreneurs marshal narratives in efforts to secure funding. Drawing on research in entrepreneurship, crowdfunding, and narrative persuasion, this dissertation investigates the content and effects of messages in crowdfunding campaigns guided by two research questions: First, how do entrepreneurs use narratives in crowdfunding campaigns? Second, how does the presence of narrative in campaigns affect the success of crowdfunding campaigns? To answer these questions, I conducted a thematic analysis of existing crowdfunding campaign messages (c = 96) and an experimental comparison of low-narrative and high-narrative messages to identify the type of messages that raise the most funding and resonate with participants (N = 457). The thematic analysis of technology-based reward and equity-based crowdfunding campaign videos revealed the use of narrative elements (narration, characters, chronology) but not fully developed narratives. A subset of the campaigns featured ‘mini-narratives’ or short, problem-solution-based descriptions of products narrated by the founders of the technology. Building on this analysis, the experiment examined perceptions of crowdfunding campaigns by comparing low-narrative and high-narrative videos. The experimental findings demonstrate that crowdfunding campaigns that feature a higher degree of narrative result in higher (a) perceptions of personal relevance, other relevance, entrepreneur credibility, (b) understanding and legitimacy as well as (c) decisions to invest and intention to share the campaign interpersonally and through social media. Taken together, the findings suggest that entrepreneurs who are not yet realizing or heeding advice to tell their story, they should.