BACKGROUND:

Crowdfunding is multidimensional which includes financing of product, project campaign, causes, or services with different models like donation, reward, debt, royalty, and equity-based by giving an open call to the public across the country or outside based platforms and social networks. It may be individual, enterprises, NGOs, and companies based on their interests in the way they can contribute or invest for monetary or non-monetary benefits depending on their intrinsic or extrinsic motivations.

After the financial crisis in 2008, it gains further significance worldwide whereas some sectors cannot get funds in the traditional and modern way of financing. Hence, crowdfunding has become an alternative financing source and gaining its importance rapidly. Many crowdfunding platforms have rapidly gained significance worldwide.

US and UK and other developed countries use it as successful alternatives for raising finance and it’s in the development stage and some developing countries crowdfunding industries are at an infant stage.

In case of Indian context. It is at an infant stage and scope will rapidly increase in the upcoming years as many researchers, policymakers are analyzing the scope of crowdfunding models and regulatory laws relating to it. Many people in need of funds can convert their dreams into reality by getting the proper funds at the right time at a lower cost and risk at minimal levels.

Presently 15 crowdfunding platforms are working in India, based on the different models and different commission rates charged on the amount raised in the campaign.

As far as India is concerned, it is found that transaction value of the crowdfunding segment in a predicted to reach US Dollar is 1.9 Million in 2020 and the expected annual growth rate (Compound Annual Growth Rate) 2020-2024 is of 1.4% resulting in a project and total amount of US Dollar sits 9.7 million by the end of 2024.

RELATED LITERATURE:

The concept in India has emerged before 11years since 2009. Presently very few articles are published on theoretical and empirical studies from the Indian context and it is gaining the attention of the researchers, policymakers, and practitioners as it is a multi-dimensional approach. Present platforms are providing financial services to some artists, film-based projects, music albums, and few social-based and individual-based campaigns.

Devashis Mitra (2012), highlights financial recession occurrence in the year 2008 and a funding gap between traditional and modern financing. Dr. Hetal Jhaveri and Prof Anjali Choksi (2017), Indian scenario crowdfunding is in the infant stage and it can be used by upcoming entrepreneurs in the initial stage of raising the funds and there is scope for regulatory law as recommended. Prinsha K (2016), advantages and risk associated, recommended for new Law, as India is Law of lands. Aditi Bhargava, Rashmi Bhat, and Niti Tiwari (2017), Internet-based security is a major risk, cyber laws security is recommended so that it can reach many people and with confidences, many entrepreneurs can raise an initial stage capital. Ms. Shruthi Srinivasan (2016), finds that it will be more successful with team coordination and through the channel of media promotion. It can be bright in the upcoming years because of internet penetration and e-commerce success. Akshay Verma and Shwetaketu Radia Tyagi (2016), it is focused on the cost benefits, proper guidelines by the Government, and SEBI rules and regulations related to the policy must be flexible and can be easily adaptable to the Indian economy. Rekha Sharma and Neha Thakur (2015), highlighted the uses, advantages, disadvantages and to overcome challenges of funding. The explorative study has concluded that it can be one of the alternatives for small project ideas but strong cyber laws, proper law, regulatory framework to platforms, and process of funding must be investor-friendly and awareness is required. Derek Smith; Mohammed Mehdi; Gharaei Manesh and Asrar Alshaikh (2013), it is found that motivation is the key factor for success relating to crowdfunding, tapping the right crowd will ensure solving many entrepreneurial problems relating to funding of technological innovators at a lower cost and encourage many talented people. Rekha Bhuvanendran, Pravitha N R (2018), focused on the primary research who was keeping the audience as students, entrepreneurs, and others. They have noted that awareness of concepts is required for young entrepreneurs, so the success rate of raising the funds will increase, and then it will help develop the country's economy.v Dr. G V M Sharma; Dr. Anitha; and Prakruthi (2019), highlighted that more awareness is required and many people consider other alternatives as a financial option as compared to crowdfunding for their investments.

Based on the above discussion. it is found that only conceptual studies are more relating to the Indian context. Hence the present study has taken this gap and conducted the primary investigation. We have aimed to answer important questions like general factors which can influence creators and contributors to go for Crowdfunding

RESEARCH QUESTION:

As Crowdfunding is a new emerging financial alternative available in India, the study aimed at understanding

a. Which are factors play an important role in participation?

RESEARCH OBJECTIVES:

To Explore the factors that influence creators and contributors for crowdfunding

RESEARCH METHODOLOGY:

The study is exploratory and is based on the online survey method using a structured questionnaire through google forms. Data is collected from the respondents. The questionnaire contains the demographical and general factors which play a role in participation. The respondents were asked to rate on 5 points Likert scale. The study adopted convenience sampling under the non-probability sampling method. It consists of 104 respondents from Bengaluru city based on the selection by thumb rule. Statistical software SPPSS was used for analysis. Statistical techniques like correlation and confirmatory factor analysis are being used.

Data Analysis:

Factor Analysis:

The data collected through the questionnaire were entered into SPSS software and analyzed. For the study, 22 variables relating to crowdfunding were taken into consideration. To reduce the data Confirmatory factor analysis was used. To check whether the data collected was suitable for the factor analysis, the following steps were taken into consideration:

KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.		.959
Bartlett's Test of Sphericity	Approx. Chi-Square	3116.065
	df	231
	Sig.	0.000

The confirmatory factor analysis was performed to confirm the factors for the study. Kaiser – Meyer- olkin’s test has shown marvelous sampling adequacy (0.959) and Bartlett's test of Sphericity has shown significance at P<0.05.

Communalities
	Initial	Extraction
Safety	1.000	.851
Feasible	1.000	.853
Goal	1.000	.881
Returns	1.000	.856
Helping	1.000	.868
Incentive	1.000	.907
Reward	1.000	.878
Amount of Funds	1.000	.851
Deadline	1.000	.865
Easy Process	1.000	.898
Volume	1.000	.848
Unsecured investment	1.000	.924
Stock Market Risk	1.000	.812
Popular	1.000	.807
Monitoring	1.000	.871
Exemptions	1.000	.834
Transparency	1.000	.895
Recognition	1.000	.873
Monitoring agency	1.000	.872
Trustworthy	1.000	.911
Simplicity	1.000	.897
Motivation	1.000	.854
Extraction Method: Principal Component Analysis.

Total Variance Explained
Component	Initial Eigenvalues			Extraction Sums of Squared Loadings			Rotation Sums of Squared Loadings
Component	Total	% of Variance	Cumulative %	Total	% of Variance	Cumulative %	Total	% of Variance	Cumulative %
1	16.603	75.470	75.470	16.603	75.470	75.470	4.727	21.487	21.487
2	.963	4.378	79.848	.963	4.378	79.848	4.489	20.406	41.893
3	.649	2.952	82.801	.649	2.952	82.801	4.267	19.395	61.288
4	.471	2.143	84.944	.471	2.143	84.944	3.155	14.343	75.631
5	.420	1.909	86.852	.420	1.909	86.852	2.469	11.221	86.852
6	.378	1.717	88.569
7	.363	1.651	90.221
8	.279	1.270	91.490
9	.271	1.230	92.720
10	.226	1.027	93.747
11	.203	.924	94.671
12	.189	.857	95.528
13	.153	.696	96.224
14	.148	.674	96.898
15	.130	.591	97.489
16	.107	.487	97.976
17	.102	.464	98.440
18	.095	.430	98.870
19	.079	.360	99.230
20	.072	.327	99.557
21	.053	.242	99.799
22	.044	.201	100.000
Extraction Method: Principal Component Analysis.

Rotated Component Matrix^a
	Component
	1	2	3	4	5
Safety	.697
Feasible	.688
Goal	.624
Returns			.647
Helping	.810
Incentive			.774
Reward			.734
Amount of Funds			.513
Deadline				.563	.593
Easy Process				.680
Volume				.577
Unsecured investment					.892
Market Risk			.540		.517
Popular		.667
Monitoring			.523
Exemptions				.519
Transparency	.536	.580
Recognition		.611
Monitoring agency		.556
Trustworthy		.627
Simplicity	.523	.585
Motivation		.570
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 8 iterations.

Based on Varimax Rotation with Kaiser Normalization 5 factors have been extracted. Each factor is constituted of those variables that have factor loadings greater than 0.5. 5 factors were extracted from the 22 variables used in the study. These 5 extracted factors explained 86.852% of the Variability. 21.487%, 20.406%, 19.395%, 14.343%, 11.221%.

Factor I:

The factor consists of 4 variables showing the 21.487% variance. It includes safety, feasibility, goal, and helping and which indicates relating to the needs and convenience of creators and contributors.

Factor II:

The factor consists of 7 variables showing the 20.406% variance. It includes popular, transparency, recognition, monitoring agency, trustworthiness, simplicity, and motivation and which indicates relating to mass reach and confidence factor.

Factor III:

The factor consists of 6 variables showing the 19.395%variance. It includes returns, incentive, reward, amount of funds, market risk, monitoring and which indicates relating to decision-making factors.

Factor IV:

The factor consists of 3 variables showing the 14.343% variance. It includes exemptions, volume, easy process, and which indicates relating to the feasibility process.

Factor V:

The factor consists of 2 variables showing the 11.221% variance. It includes deadlines and unsecured investments and which indicates relating to goal-oriented.

FINDING:

The study found that five major factors influence creators and contributors considered while participating in crowdfunding in general which are as follows -Needs and Convenience, Mass reach and Confidence, Decision Making, Feasibility Process, and Goal Oriented.

CONCLUSION:

From the Study it is found 22 variables relating to creators and contributors are converted into 5 major Factors which influence the crowdfunding participation-Needs and Convenience, Mass reach and Confidence, Decision Making, Feasibility Process, and Goal Oriented.

LIMITATIONS:

In the study, the respondents may not have a complete awareness of the concept and they may have given biased information due to online surveys. Non-probability Technique is used on the Convenience method and only a few respondents are considered and the rural population is not considered.

SCOPE FOR FUTURE RESEARCH:

In this study, only general factors relating to crowdfunding were taken into consideration. If they have already invested or participated in the campaigns of Indian platforms, how they were aware, the model used, platforms considered for raising an amount, and major success factors can be analyzed and model building can be done using those factors.

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Received on 10.09.2020 Modified on 26.09.2020

Asian Journal of Management. 2020;11(4):493-496.

DOI: 10.5958/2321-5763.2020.00073.6