Equity Based Crowdfunding Success Factor

University of Applied Sciences and Arts Northwestern Switzerland FHNW
Research Paper
Crowdfunding: Success factors in the financing phase.
Submitted within the study programme Master of Science in

International Management
By Jonas Josef
Oscar Merri
For the module Practice-oriented Project
Expert Prof. Dr. Rolf Meyer
Submission date 05.06.15

Page 2
Abstract
Crowdfunding is a rather new financing method which is especially used by start-ups and
small firms, in order to get their business funded. In comparison to classical investments,
such as venture capital, crowdfunding is tapping the crowd instead of specialized investors.
In regards of crowdfunding, we are interested in which factors influence the funding
success. We therefore explored the point of view of one founder of an equity funded project
and his investors. Moreover, we were interested to see how the relationship changed
between investors and the founder, after the funding phase. In our term paper, we report
findings from a qualitative perspective by conducting several semi structured interviews with
investors and the founder of the crowdfunding project. Despite the fact that the literature
suggests that investors are driven by monetary reasons in equity-crowdfunding, our findings
of this specific crowdfunding project imply emotional reasons as the main driver during
decision making. However, a good communication between investors and founders is
indispensable during the funding phase, but also after the successful funding, to avoid
information asymmetry and to ensure the overall success of the project. Investors were also
driven by the fact that they can be part of a community where they can exchange information
with other investors and the founder and show their affinity to the product. Our findings also
pointed out, that investors felt like being pioneers and part of the company.
Page 3
Declaration of Authenticity
We the undersigned declare that all material presented in this paper is our own work, or
fully and specifically acknowledged wherever adapted from other sources.
We understand that if at any time it is shown that we have significantly misrepresented
material presented here, any degree or credits awarded to us on the basis of that material
may be revoked.
We declare that all statements and information contained herein are true, correct, and
accurate to the best of our knowledge.
Olten, 05 June 2015
__________________ ___________________
Jonas Josef Oscar Merri

Page 4
Acknowledgements
We especially want to thank Mr. Steinemann and the investors for participating in our
project. Without their time and effort, we would not have been able to gain such deep
insights into the examined topics. Furthermore, we want to thank Professor Dr. Rolf Meyer
for helping and guiding us through the whole project.
Page 5
Table of Content
Abstract............................................................................................................................ 2
Declaration of Authenticity ............................................................................................. 3
Acknowledgements ......................................................................................................... 4
1. Introduction .............................................................................................................. 6
2. Research Question .................................................................................................. 7
3. Literature Review ..................................................................................................... 8
3.1. Models ................................................................................................................... 8
3.1.1. Donation Model ....................................................................................................... 9
3.1.2. Reward Model ....................................................................................................... 10
3.1.3. Lending Model ....................................................................................................... 10
3.1.4. Equity Model .......................................................................................................... 11
3.2. The role of founders ............................................................................................. 12
3.3. The role of intermediaries .................................................................................... 12
3.4. The role of investors ............................................................................................ 13
3.5. Success factors ................................................................................................... 14
4. Temporary Conclusion .......................................................................................... 16
4.1. Which factors influence investors in their investment decision making? ............... 16
4.2. How can founders improve the possibility being funded? ..................................... 17
4.3. How does the relationship between the founders and investors look like after the
project has been initiated (after the funding phase)? ................................................... 19
4.4. Which factors increase/decrease the possibility of a crowdfunding project being
successfully financed? ................................................................................................. 20
5. Research Methodology ......................................................................................... 22
5.1. Type of design used............................................................................................. 22
5.1.1. The company ......................................................................................................... 22
5.2. Procedures .......................................................................................................... 23
5.2.1. Sampling strategy .................................................................................................. 23
5.2.2. Data collection ....................................................................................................... 23
5.2.3. Data analysis ......................................................................................................... 24
5.3. Researcher’s Role ............................................................................................... 24
5.4. Ethical Issues....................................................................................................... 25
6. Outcomes ............................................................................................................... 27
6.1. Which factors influence investors in their investment decision making? ............... 27
6.2. How can founders improve the possibility being funded? ..................................... 28
6.3. How does the relationship between the founders and investors look like after the
project has been initiated (after the funding phase)? ................................................... 31
6.4. Which factors increase/decrease the possibility of a crowdfunding project being
successfully financed? ................................................................................................. 32
6.5. Other findings ...................................................................................................... 33
6.6. Insights for further research ................................................................................. 34
7. Limitations and Potential Problems ..................................................................... 34
8. Bibliography ........................................................................................................... 35
8.1. Literature ............................................................................................................. 35
9. List of figures ......................................................................................................... 40
10. Appendix ................................................................................................................ 41
10.1. Interviews............................................................................................................ 41
10.2. Coding Scheme .................................................................................................. 71
10.3. Literature review matrix....................................................................................... 72
Page 6
1. Introduction
Many companies, especially start-ups or small and medium sized enterprises have
difficulties in attracting external financing. Business Angels and venture capitalists are trying
to fill gaps of larger amounts, whereas smaller amounts are often provided by entrepreneurs
themselves as well as their families, friends and fools (3Fs). Many enterprises remain
unfunded because of a lack of sufficient value that can be pledged to investors. However,
some founders have made use of a rather new source of financing, namely crowdfunding.
In comparison to classical investments through venture capital, for instance, crowdfunding
is tapping the crowd instead of specialized investors (Lambert and Schwienbacher 2010).
The origin of crowdfunding lies in the USA and has strong ties with the concept of
crowdsourcing. The idea behind this approach is to outsource certain activities to the crowd
(Moritz and Block, 2013). Having a look at crowdfunding, the aim is to fund the
establishment of a company (seed phase) or only certain activities such as product
development. It is especially regarded as viable option to diminish the Early-Stage-Gap of
a start-up, when traditional financing is still difficult (Moritz and Block, 2013).
In 2012 a total of $2.7bn was raised worldwide through crowdfunding. It was forecasted that
this amount would increase to $5.1bn in 2013 (Massolution, 2013). The biggest markets are
North America with a volume of $1.6bn in 2013 and Europe with a volume of $0.9bn in the
same period. However, the growth rates from 2011 to 2012 in the markets show that the
North American market is growing faster (105%) than the European market (65%).
In this paper, we will first discuss the different models of crowdfunding. After this, the
success factors, as well as the roles of the different actors within a crowdfunding project will
be discussed. This includes the role of the founder, the role of the investors and the role of
the intermediaries. In Chapter 4 we will then elaborate a temporary conclusion, which will
answer our research questions based on the existing literature. Chapter 5 mainly discusses
data collection, sampling strategy, data analysis and the research design, whereas Chapter
6 describes the outcomes of our own research. In this chapter we will also compare our
outcomes with the results in chapter 4 (temporary conclusion). Finally, Chapter 7 concludes
the paper by suggesting topics for future research and the limitations of our research.
Page 7
2. Research Question
The main goal of this project is to examine the extent to which factors increase the possibility
that a crowd funding project will be successfully financed. To do this, a grand-tour question
has been defined to guide the research. Furthermore, sub-questions have been defined,
which break the grand-tour question into individual parts and support us in answering the
grand question. To answer the grand-tour and sub-questions, this report will examine
factors which influence investors in their decision making as well as ways on how founders
can improve their attractiveness for possible investors. Moreover, we will have a look at
what will happen after the funding process. Hence, we focus our attention on the
relationship between investors and founders and how this relation develops after the
funding stage, since this could have an impact on the overall success of the crowdfunding
project. We categorize success as a project achieving its goal and raising at least the
targeted amount of money within the given timeframe.
Grand-tour question:
Which factors increase the possibility of a crowdfunding project being successfully
financed?
Sub-questions:
1. Which factors influence investors in their investment decision making?
2. How can founders improve the possibility being funded?
3. How does the relationship between the founders and investors look like after the
project has been initiated (after the funding phase)?
Page 8
3. Literature Review
This chapter will introduce you to the current literature in the field of crowdfunding. It will
especially elaborate the definition of crowdfunding, the participants of a crowdfunding
project and the different types of crowdfunding that exist nowadays. Furthermore, the
success factors needed in order to become successfully financed will be discussed. After
discussing all the mentioned aspects in this chapter, a temporary conclusion will be
elaborated. However, this conclusion will only be based on the existing literature.
Nonetheless, it will help us to develop a first conclusion, which can be compared against
the outcomes of the conducted interviews.
Normally, a crowdfunding project has three actors, namely the initiator of the project,
investors and an intermediary which links the initiator with the investors. These actors will
be analysed in more detail in the following subchapters. In order to achieve a good overview
of the different actors in a crowdfunding campaign, the article of Moritz and Block (2013)
has been consulted. This article summarised the existing literature and divided it in the
categories “initiator”, “investor”, and “intermediary”. Hence, the article mentions several
articles, such as Hemer (2011), Ahlers, et al, (2012), Lambert and Schwienbacher (2010)
or Wash and Solomon (2014), which helped us to gain knowledge in the field.
3.1. Models
Crowdfunding can occur in different forms, ranging from a simple donation to more
elaborate forms such as equity investments. These escalating commitments have
immediate consequences in the complexity of the involved procedures. While the most
basic form, donations, is relatively easy to manage, as it does not require an ongoing
relationship with the investor after the financing phase, equity investments are much more
complicated, involving the legal ownership by the investor. The following figure depicts the
escalating complexity of the different forms of capital provision.
Page 9
Figure 1 Capital provision by complexity
Source: Hemer, et al., 2011.
However, to get a clear understanding, each model will be examined in the following
subchapters.
3.1.1. Donation Model
The donation-model works like an ordinary donation. It is an altruistic form of help by the
investors. The fund-seeker does not have any obligation to give something back for the
funds he received. However, in most cases the fund-seeker provides some kind of
immaterial acknowledgment, which can range from a mere thank you note to a minor role
in the produced movie (Hemer, 2011). These immaterial acknowledgments lead to a smooth
transition between the donation-model and the reward-model, especially if they are seen as
binding by the investors.
The main motivation for investors to donate is not to receive something in exchange, but to
support the cause or project. It could be considered as a philanthropic incentive (Ahlers, et
al, 2012). As a direct consequence, cause-based projects, which appeal to the beliefs and
interests of the investor, such as those based on the environment, the community, faith or
the performing arts are best suited for this type of crowdfunding (Mitra, 2012).
Due to the altruistic nature of the donation-model, it does not bear significant risks. However,
the lack of return may make it difficult to raise a substantial amount of money (World Bank,
2013). According to Lambert and Schwienbacher (2010), pure donation crowdfunding
constitutes around 22% of all crowdfunding projects.
An example of a successful project launched with the aid of the donation-model is the
WikiLeaks billboard campaign in Los Angeles. The project came to live with the help of the
crowdfunding platform EpicStep, which specializes on billboard financing (Mitra, 2012).
Page 10
Another rather less known platform is Razoo. This platform is specialized in non-profit
projects and has raised over $104 million to this day.
3.1.2. Reward Model
The reward-based model can be separated into crowd-sponsoring and pre-selling/-ordering

(Moritz and Block 2013, p. 5).
Pre-selling: Investors prefer a pre-selling project if they want to help to produce something
in order to get a promised return. The promised return is the delivery of an early version of
the product or service. This can be a book, a film, a music album, a theatre performance,
software, some new technical product, an agricultural product or a service concept (Hemer,
2011). The investors often get the product, the founder is making, at a reduced price (Mitra,
2012).
Crowd-sponsoring: In the case of crowd sponsoring, the founder of the project and the
sponsor agree on a defined reward. Therefore, the founder is obligated to give a reward in
the form of a service like PR or marketing for the sponsor (Hemer 2011, p.14).
Some leading reward-based platforms are Kickstarter (http://www.kickstarter.com/) and

IndieGoGo (http://www.indiegogo.com/) (Mitra, 2012). Kickstarter for instance, is offering a
huge range of project categories, such as Art, Comics, Crafts, Dance, Design, Fashion, Film
& Video, Food, Games, Journalism, Music, Photography, Publishing, Technology and
Theatre in which investors can invest. To initiate a project, founders usually set a funding
target and a limited timeframe in which the project is available for potential investors on the
platform (Kickstarter, 2015).
Like the donation model, one can say that reward-based crowd funding is less risky.
However, the financial return is usually small as well. Moreover, no securities are acquired
and there is no accountability mechanism (World Bank 2013, p. 20):
3.1.3. Lending Model
Crowd-lending defines a model, where the rewards are normally the interest and the
payback after the lending period (Hemer 2011, p.14). One possibility is peer-to-peer-online
lending (P2P lending), which means that the necessary amount of money will be transferred
through a private person. However, also companies can receive loans through a number of
small lenders, which defines another possibility of crowd-lending (Moritz and Block, 2013).
Page 11
As already shown in Figure 1, crowd-lending is ranked second in regards to their complexity,

as there are several ways on how it can be executed (Hemer, 2011). Thus, there are two
categories of platforms for the lending-model: Those that offer interest and those that do
not offer interest (Mitra, 2012). Some of the most famous lending platforms are Kiva,
Prosper, LendingClub, ACCIÓN, TrickleUp, GlobalGiving, GrameenFoundation, or
UniThrive. Kiva, for instance, is offering zero-interest loans, whereas Prosper offers loans
including interest. (Hartley, 2010).
In comparison to the reward- and the donation model the lending model is a bit riskier, as
start-ups have a high failure rate and therefore represents similar risk of loss as an equity
investment, but with capped potential returns. However, lender and borrower agree upon
a pre-determined rate of return. In addition, debt holders are senior to equity holders in
case of bankruptcy. Furthermore, it requires a business that is already generating cash
flow (World Bank, 2013).
3.1.4. Equity Model
Equity crowdfunding is a model, where investors receive shares of the company and/or
profit sharing arrangements (World Bank, 2013). Like the other models, equity-
crowdfunding is a form of financing in which founders make an open call for funding on the
internet, and hope to attract a large group of investors. Thus, the funding also takes place
on an online platform, such as Crowdtube. Since 2009, equity crowdfunding has become
an increasingly important financing alternative for start-ups. Hence, the volume of funded
projects has doubled every year in the US market. Investors usually invest small amounts,
because such investors do not have the capability to research and assess potential
investments. In comparison to a classical venture or angel investment, crowdfunding
investments in start-ups are generally much smaller (Ahlers, et al. 2012).
The main advantage of equity crowdfunding is that investors have the possibility to share in
the profitability of the venture. Therefore, it may attract relatively large numbers of investors.
However, the probability of a loss of the investment exists. Hence, risk is relatively high in
comparison to a donation or a reward model. Furthermore, equity holders are subordinate
to creditors in case of bankruptcy. Additionally, security laws related to crowdfund investing
may be complex (World Bank, 2013).
Page 12
3.2. The role of founders

Similarly to venture capital financing, with start-ups, there is an information asymmetry
between investors and entrepreneurs. Therefore, the founder usually has better knowledge
about the quality of the start-up than potential investors. However, this information
asymmetry differs among the crowdfunding models. Recent research (Ahlers, et al. 2012)
has shown that equity crowdfunding contains the highest asymmetry, since small investors
are less likely to have the experience to evaluate companies and investment opportunities.
Hence, the way young start-ups signal to small investors is likely to be different from the
way they would signal to business angels or venture capitalists. Thus, they need to find
other ways to attract investors, such as generating emotions or feelings in order to generate
value to investors (Ahlers, et al. 2012).
According to a study of Gerber, Hui and Kuo (2013) from the Northwestern University,
founders are motivated to start a crowdfunding campaign because of various reasons. The
major reason is that they want to raise funds. Secondly, they want to establish a long-term
relationship with their investors. Therefore, the funding process creates a long-term
connection to people which goes beyond the project itself. Furthermore, they want to
increase awareness of their work through social media. According to the research
conducted by Lambert and Schwienbacher (2010) getting public attention and receiving
feedback for the product are other relevant motivations for engaging in crowdfunding.
3.3. The role of intermediaries

In order to obtain funding from a crowd, the founders can directly contact possible investors
such as family and friends, or use an intermediary. Such intermediaries are usually found
on the internet in the form of crowdfunding platforms where capital seekers and investors
can interact with each other.
According to Beier, Früh and Wagner (2014), approximately 550 crowdfunding platforms
currently exist. These online platforms function in roughly two different ways. They either
use an all-or-nothing approach or the direct donation system. In the former, founders get
the funds only when the predefined goal is achieved (Wash and Solomon, 2014). Whenever
the project fails to achieve this goal, the funds are returned to the investors and the fund-
seekers do not receive anything. The direct donation system is more relaxed. The fund-
seeker receives every donation independently of the goal achievement. The platforms do
not only pair fund-seekers with investors, but can also provide a standardized procedure
which increases trust and security. Furthermore, they act as information-, communication-
Page 13
and transaction platform (Moritz and Block, 2013). The importance of these intermediaries
is also reflected by the funds raised on them.
Haas, Blohm and Leimeister (2014), group the intermediaries in three different clusters with
different characteristics and specializations. In the first cluster, hedonism, creative and
innovative projects are marketed. The investors do not receive a monetary return but usually
receive the right to pre-order a product. The projects are usually funded through a donation
model. Whereas the investors on these platforms are predominantly individuals, capital-
seekers can be a mix of both, individuals and organizations.
The second cluster, altruism, involves mostly projects that are financed through donations
(93%). As the investors do not receive anything in return, the intermediaries mostly use a
keep-it-all principle, which entails that capital-seekers can keep the donations even if the
target amount is not achieved. Most projects on these platforms have a social or
environmental nature.
The last cluster, the one for profit, includes platforms marketing projects which offer financial
returns. Due to the specialization, these platforms are designed to satisfy the need of
financial returns of the investors. Both models, all-or-northing and keep-it-all, are applied.
In order to prevent excessive complexity that comes with a large amount of investors, most
platforms apply a minimum pledge model. The intermediaries in this cluster do usually have
a small amount of projects with a large capital need.
3.4. The role of investors

Normally there are multiple investors in a crowdfunding project, giving these type of
financing the name crowdfunding (funded by the crowd). These do not have to be known
by the founder. Depending on the project, these investors may then provide a freely
selectable amount of money to be invested. The motives to invest are manifold and can be
closely related to the capital provision seen in Figure 1. Therefore, the motive for an investor
in a pre-selling project may be the opportunity to be an early recipient of the product. Other
motivators may be more altruistic, going as far as “just helping someone out”, or are more
aligned with traditional investing, realizing a monetary return (Ordanini, et al., 2011).
The following figure shows the interaction between the three main actors of a crowdfunding
project. These interactions are not only based on financial transactions, but include the
information spread and the final distribution of the rewards. As additional players, the banks
and micropayment providers are included.
Page 14
Figure 2 Crowdfunding process with intermediaries
Source: Hemer, et al., 2011.
3.5. Success factors

The theory mentions different factors that increase the possibility that a crowdfunding
project will be successfully financed. Recent research (Blohm, et al. 2013) from the
University of St.,Gallen has found that crowd funding projects are either fully successful or
fail completely. Successfully financed projects have thirteen times more investors who
invest four times more than unsuccessful projects do. According to a study by Zvilichovsky,
Inbar and Barzilay (2014, p. 4-5,19), the platform Prosper, has a success rate of 23,8%,
whereas Kickstarter has successfully funded 54,2% projects. In this recent study, 68.057
Kickstarter projects had been observed. Furthermore, platforms like Kickstarter have
designed a clear measure of success. When initiating a campaign on Kickstarter, the owner
announces his/her financing target and funding duration. This allows the observer to easily
evaluate the success of a campaign. Furthermore, the same study found out that backing
other projects instead of only publishing the own project increases the funding success of
the own campaign, since further initiators become aware of the project and initiators can
learn from other projects how a successful campaign might work. Therefore, one can say
that the probability that a project achieves its targeted financing goal increases in the
number of backing actions performed by its owner. This can lead to a sub-community of
backer-owners, which exhibits network dynamics (Zvilichovsky, Inbar and Barzilay. 2014,
p. 4-5, 19).
Page 15
Some further aspects that should be considered are the following (Blohm, et al. 2013, p.79;
Wheat, et al. 2013 p. 71):
 Good descriptions of the project.
 Use of media such as pictures.
 Public talks to make people aware.
 Long run-time.
 Possibility to finance the project over the amount of the funding target.
 Initiators, that have a huge social network on a platform and on Facebook, Twitter,
blogs, etc., can increase the possibility of a successfully financed project.
 Initiators should have realistic finance targets to attract investors and reasonable
pay back conditions. Therefore successfully financed projects usually have lower
finance targets.
 Communicate financial securities to the investors.
 Successfully financed projects in the past could make potential investors confident
that the current project will also succeed.
 Low pay back rates, since this signals a reliable pay back method which does not
overstrain the initiator.
Page 16
4. Temporary Conclusion
This chapter will try to answer the research questions using the existing literature. It will
serve as a temporary conclusion and as a basis for further discussion when discussing the
own outcomes of our research.
4.1. Which factors influence investors in their investment

decision making?
In general, successfully financed projects have thirteen times more investors who invest
four times more than unsuccessful projects do (Blohm, et al. 2013). However, investors
have different motives in order to invest in a project. For an investor in a pre-selling project
the motive may be the opportunity to be an early recipient of the product. Other motivators
may be more altruistic like “just helping someone out”, or realizing a monetary return
(Ordanini, et al., 2011).
Also psychologists and marketing scholars are trying to figure out why certain people buy
and what influences people in their decision making. Gerber, Hui and Kuo (2013) suggested
that investors are influenced by sympathy and empathy, guilt, happiness and identification
to the project. As such, motivations for investing are related to interpersonal connections
between the investor and the founder and the communication styles. This means that
people are more willing to donate money to a charity, for instance, if first asked how much
time they would like to donate rather than asking how much money they would like to spend.
Pucinelli et. al. (2009) argues that goals, schema, information processing, memory,
involvement, attitudes, affective processing, atmospherics, and consumer attributions and
choices influence consumers in their decisions and are therefore the key elements of
consumer behavior.
Kleemann, Voss and Rieder (2008) suggests that investors have either intrinsic or extrinsic
motivation. Whereas intrinsic motivation relates to the pleasure or fun of doing the
investment, extrinsic motivation calls for an external reward, such as money and goods,
career benefits, learning, recognition or dissatisfaction with current products.
According to Ahlers et. al. (2012), especially in equity-crowdfunding, there is a concern

about information asymmetries between investors and founder. Normally, the founder has
better knowledge about the true quality of the project than potential investors. Moreover,
usually small investors invest in equity-crowdfunding projects. However, small investors are
less likely to have experience evaluating investment opportunities. Therefore, a good
Page 17
communication is indispensable to overcome most of the information asymmetries. In

addition, investors are trying to interpret the information provided on the platform. In this
sense, small investors regard some of the information as signals of quality and that the firm
will succeed. Nonetheless, not all information provided by start-ups will be effective signals
in order to help overcome the problem of information asymmetry. Hence, Ahlers et. al.
(2012) suggests two characteristics, namely observability and signal cost. Observability on
the one hand is the extent to which the signal is noticed and understood by investors. On
the other hand, signal cost must be structured so that dishonest signals are not rewarded,
and so that the cost of producing the signal does not outweigh its benefits. Investors are
also often looking to get an active part of a community.
Therefore, the literature mentions several factors that influence investors in their investment
decision making. The most important factors can be summarized as follows (Voss and
Rieder, 2008; Pucinelli et. al., 2009; Ordanini, et al., 2011; Kleemann, Ahlers et. al., 2012;
Gerber, Hui and Kuo, 2013):
 Interpersonal connections between investor and founder.

 Monetary return.
 Getting attractive rewards (e.g. early version of the product, money, etc.).
 Helping someone out.
 Emotional reason/Interpersonal connections (Sympathy/empathy, Guilt,
Happiness, Identification/involvement to the project).
 Good communication between investor and founder (avoid information
asymmetry).
 Choice (other projects or different investments such as venture investments).
 Get an active part in a community.
4.2. How can founders improve the possibility being funded?

There are different authors that have examined the underlying success factors of
crowdfunding projects. Lambert and Schwienbacher (2010) as well as Belleflamme, Lamber
and Schwienbacher (2013), found out that projects, which are structured as non-profit
organizations, are more likely to receive the targeted amount of funding than any other form
of structure. According to the authors, the superior success rate is due to a reduced focus
on profits by non-profit organizations, which on the other hand increases the perceived
commitment towards community benefits.
In their article, Ahlers, et al. (2013), analyzed success factors of equity crowdfunding. They
found out that providing financial projections and roadmaps can increase the success of a
Page 18
project being funded. Furthermore they add that a higher level of education of the capital-
seekers and their board members, attracts more investors, thus increasing the probability
of being funded. On the other hand, the research conducted by the authors indicates a low
correlation between external certification, such as awards, patents and government grants,
and the success of the project.
Mollick (2013) identified three factors which influence the success of a crowdfunding project.
First, he claims that a large personal network on social platforms can be associated with
the success of the project. Second, high quality projects are more likely to be funded.
According to the author, these projects can be identified by funders and thus are chosen
over projects with bad quality. In his research paper, Mollick (2013) assessed the quality of
a project by comparing the projects to standards of successful pitches. In more detail, he
examined whether the project included a video, indicating a minimum of preparation,
updates within three days, and spelling errors. Beier and Wagner (2014) deem an
appropriate communication towards the potential investors as equally important. Third, the
success of a crowdfunding project seems to have a geographic component. Projects which
reflect the cultural preferences in their region are therefore more likely to get funded.
Zvilichovsky, Inbar and Barzilay (2014) have researched the role of reciprocity on
crowdfunding platforms. They found out that projects of capital-seekers, which have
previously invested in other crowdfunding projects, do not only have a higher success rate,
but also attract more investors and raise more money. According to the authors, this is due
to a reciprocity effect on crowdfunding platforms.
In a study on the platform 100-days.net, Beier and Wagner (2014) have identified the best
timing when projects should start. According to the authors, the willingness to donate is the
highest on Monday and Tuesday, while lowest on Saturday. This is highly relevant, as the
investment share in the first days are directly linked to the success of a project. Furthermore,
the authors highlight the importance of the strategic planning of the project. They suggest
to try to build a social tie and trust between the initiator and the potential investors in the
pitch of their project. This also entails to choose an appropriate reward for the investment.
In order to do so, the initiator has to be well aware of his target group. Additionally, the
authors indicate that the target sum has to be well chosen. The sum must be high enough
to signal potential investors that they are needed, but not be as high as to appear unfair. In
order to get traction, Beier and Wagner (2014) suggest to inform potential investors from
the circle of acquaintances first. This can help to gain a significant amount of funds in the
vital first days.
Page 19
In summary, the existing literature shows different ways on how companies can increase
the probability of being funded (Lambert and Schwienbacher, 2010; Ahlers, et al., 2013;
Belleflamme, Lamber and Schwienbacher, 2013; Mollick, 2013; Beier and Wagner, 2014;
Zvilichovsky, Inbar and Barzilay, 2014):
 Structure projects as non-profit organizations.

 Provide financial projections and roadmaps.
 Ensure a high level of education from initiator and board members.
 Have a large personal network on social platforms.
 Ensure high quality of the project.
 Reflect cultural preferences of the region.
 Invest in other crowdfunding projects (reciprocity effect).
 Start crowdfunding on Monday or Tuesday.
 Build a social tie and trust in the pitch of the project.
 Choose an appropriate reward.
 Know the target group.
 Choose the target sum well.
 Get family, friends and fools on board first.
4.3. How does the relationship between the founders and

investors look like after the project has been initiated (after
the funding phase)?
In addition to raising funds, recent research (Gerber, Hui and Kuo, 2013) has found out that
investors are also interested in creating a long-term relationship that extends beyond the
moment of the financial transaction. Therefore, such committed long-term interactions allow
founders to collaborate directly with investors. Hence, investors want others to share in the
project and get a relationship that lasts weeks, months or even years after the project was
initiated. In addition, investors become a part of an active community where they can
exchange their experiences with other investors or even with the founder of the project
himself/herself.
Bacon (2013) and other recent research (Raising crowdfunding's appeal, Anon., 2014) are
arguing in a similar manner, saying it is the ability to build a strong brand and to strengthen
the relationship with consumers/investors, going beyond the crowdfunding project itself that
makes a project successful. Thus, it is a financing approach that is rather personal and
brand appropriate.
Page 20
Hence, one can say that existing literature has a strong direction saying that, no matter
which model of crowdfunding to choose, founders often try to create a long-term relationship
to the investors. Investors, on the other hand, often also try to find a project where they can
talk to other investors, exchange information and show their affinity to the project within a
community. Those characteristics distinguishes crowdfunding to other investments, such as
venture investments, which are rather impersonal. Regarding equity-crowdfunding in
particular one could say that, creating a strong relationship after the initial investment, is
one of the key milestones that ensures the overall success of the project, as investors are
also potentially future customers who may be willing to buy further products or shares of the
company.
4.4. Which factors increase the possibility of a crowdfunding

project being successfully financed?
In chapter 4.1, 4.2 and 4.3 we examined different factors that could increase or even
decrease the possibility that a crowdfunding project will be successfully financed. We have
therefore separated our sub questions into three categories, namely the role of investors
(Chapter 4.1), the role of founders (Chapter 4.2) and the relationship between investor and
founder after the financing phase (Chapter 4.3). However, to answer our grand tour question
this chapter will serve as a summary of the most important aspects in Chapter 4.1 to 4.3,
especially for equity funded projects, as our own research focused on this type of
crowdfunding.
According to the literature, there is a strong tenor saying that communication is

fundamental, especially when it comes to equity-crowdfunding. This is justified by
information asymmetries between investors and founders. Thus, small investors are usually
less likely to have experiences evaluating investment opportunities. Founders could avoid
asymmetries by providing information on the platform and roadmaps. Furthermore, having
a good reputation and high level of education increases the probability being successfully
financed.
In addition, investors who invest in an equity funded project often have monetary reasons
for their investment decision making. However, sometimes investors are also willing to
invest because they have feelings related to the product/project, such as
sympathy/empathy, guilt or happiness. Thus, depending on the product, their decisions are
also based on intrinsic motivations. Nonetheless, such feelings do rather appear in other
crowdfunding models, such as a reward or donation model.
Page 21
According to the third sub question, the literature mentions that founders often want to
create a long-term relationship to the investors. Investors on the other hand often also try
to find a project where they can talk to other investors and exchange information and show
their affinity to the project within a community. Therefore, the connection to the project goes
far beyond the initial investment.
Page 22
5. Research Methodology
The following chapter will introduce you to the research methodology. Therefore, it will
mainly cover the used research design, sampling strategy, data collection, data analysis,
as well as the researcher’s role and some ethical issues that occurred. Furthermore, it will
describe the company (Dubois et Fils) in which we have conducted several interviews.
5.1. Type of design used

For conducting our research, a qualitative research design was chosen to get information
rich data. Therefore, the company Philippe DuBois et Fils SA has been contacted for
conducting several semi-structured interviews. In order to get reasonable results and to get
outcomes that match our research questions, the CEO, who was the founder of the
crowdfunding project, as well as investors were interviewed. The company and the
crowdfunding project itself will be explained in the following subchapter.
5.1.1. The company
DuBois et fils was founded in 1785 and is the oldest manufacturer of watches in Switzerland.
The company sells unique and high quality watches. In 2010, Thomas Steinemann became
the new CEO (Duboisfils, 2015a). However, the company had huge liquidity problems and
was seeking for funds to raise capital. Even though, the new CEO had long experiences in
the sector and the value of the brand was high, it was difficult to collect the needed money.
In 2012, Steinemann had the idea of crowdfunding, as there are a lot of enthusiasts and
assemblers of watches in the world who might find the company interesting. Together with
certain experts, he created a crowdfunding website of his own. Investors who invested in
the project received several rewards. For investments of at least 500 CHF, investors would
own shares of the company and the right to buy a watch with the value of 9.000 CHF at half
price. Investors who invested 3.000 CHF to 10.000 CHF obtained the right to buy a watch
with a discount of 70% each year (Laird, 2013). Thus, the model of equity based
crowdfunding had been chosen. After five months, the financing target of 1.500.000 CHF
had been reached with investments of 587 different investors (Duboisfils, 2015b).
Page 23
5.2. Procedures
This chapter will delineate in more detail how we selected the case, collected the required
data and how we finally analysed it.
5.2.1. Sampling strategy
In order to best answer the research questions elaborated in chapter 2, a single case study
approach was selected. This approach ensures the focus of the available resources on one
case and enables in consequence to depict a detailed description of the context. In addition,
the single case approach permits us to investigate both main actors, capital-seekers
(founders) and investors, without having to sacrifice a detailed description.
In order to get the most information possible from one case, the sampling method must be
tailored to fit the requirements of the research questions. To best find a suitable case, a
criterion based sampling strategy with the following criteria has been used:
 Capital-seekers must have used crowdfunding.

 The crowdfunding must have taken place some years ago (in order to investigate
the relationship after the crowdfunding), but not be too old (participants have to
remember the crowdfunding).
 Access to capital-seeker and investors has to be possible.
These criteria were the foundation upon which we conducted our search for a suitable case.
With the help of the internet and contacts of our supervisor, five cases where identified and
contacted. As such the contacts of our supervisor added the method of opportunistic
sampling to the before mentioned criterion sampling. After a first triage of these cases, two
remained and out of them the most promising one was chosen.
The case, namely the company Dubois et fils, fulfilled all the requirements. They used the
crowdfunding approach in 2012, which ensures some experience with the investors’
relationship, while still being relatively recent. Furthermore, the access to the CEO and the
investors was granted.
5.2.2. Data collection
In the research process, two types of data were used. The main method of data collection
were the interviews conducted with the capital-seeker and the investors. These interviews
were the main body of information used to answer the research questions. In total one
interview was conducted with the initiator of the project and five interviews with investors.
Page 24
These interviews took all place during a shareholder event. The interview with the capital
seeker took roughly 40 minutes, whereas the interviews with the investors took about 10 to
15 minutes each. The interviews gave insights on both sides of crowdfunding and therefore
allowed a more holistic representation of the conducted research.
Furthermore, the CEO (Thomas Steinemann) of the company gave us the permission to
mention his name and the name of the company in our report.
On the other hand, secondary data, such as journal articles were used. This type of data
helped us to get a preliminary understanding of the crowdfunding process and concept.
Furthermore, the literature review allowed us to identify the gaps of the existing research,
which could be further analysed.
5.2.3. Data analysis
The collected data was analysed using an iterative approach. After the data was collected,
a rough coding scheme was created. Therefore, a bottom up coding system was used. The
coding scheme was continuously adapted via deleting and grouping of the different codes.
Finally, the codes were grouped according to the research questions. A table with the
different codes can be found in the appendix. As the amount of interviews was relatively
small, patterns where quickly found. However, it was much more difficult for the secondary
data due to the big number of available sources.
5.3. Researcher’s Role

The researcher is the primary instrument for qualitative investigation. As such, the
development of the whole research process, from the elaboration of the research question
to the conclusion of the research, is heavily influenced by the researcher. It is therefore
important for the reader to have an insight about the researcher and his relationship to the
subject (McCaslin and Wilson Scott, 2003).
Prior to the conducted research, the members of the research group had only limited
knowledge about the topic of crowdfunding. Even so, the general attitude towards
crowdfunding was optimistic which might have led to a bias in the conducted research.
Furthermore, the background in the field of business administration of both research
members might have led to the constitution of similar thinking patterns and attitudes towards
crowdfunding.
To counter the implicit bias each researcher brings along due to his/her past experience
and cultural background, the conducted research has to be transparent. To ensure
Page 25
reliability, the conducted interviews were recorded and transcribed. The elaborated coding
scheme, used to analyse the interviews, are disclosed in the paper.
The company used for the study, as well as the initiator of the crowdfunding project and the
investors were not known by the research members prior to the study. However, the
research team knew that the crowdfunding process was one of the most, if not the most
successful crowdfunding project in Switzerland before the interviews started. This fact might
have led to a halo effect, influencing the outcome of the interviews. To counter this effect,
an interview guide was established and double checked with the supervisor of the research
project. However, even this enactive measure could most probably not ensure an outcome
free from bias.
5.4. Ethical Issues

Ethics is a topic that accompanies the researchers throughout the research process. As
such, the researchers must be aware of potential ethical problems and act accordingly.
According to Diener and Crandall (1978, cited in Bryman and Bell, 2007), ethical issues can
be grouped into the four categories harm to participants, lack of informed consent, invasion
of privacy and deception.
In order to minimize the potential harm to participants, the interview partners are held
anonymously whenever meaningful. As such, the investors, which cannot be easily
identified are held anonymously, while Mr. Steinemann and the research company Dubois
et fils. are disclosed. The initiator, as well as the company were not anonymized as the
company and the initiator of the crowdfunding project, Mr. Steinmann, are easily identifiable.
Furthermore, a proposed confidentiality agreement was declined by the company. As the
project was covered extensively by the media, potential harm to participants, especially from
the side of the initiator, was expected to be minimal.
In our research, the lack of informed consent might especially concern the interview
partners. While the scope and the aim of the research was introduced to the initiator through
various correspondence, the investors did not know of the ongoing research. As such, the
investors were introduced to the scope of the research during the first contact. They were
asked if they wanted to participate in the research as research partners and if the interview
could be recorded.
Page 26
While interviewing, the invasion of privacy might especially surface when asking sensitive
questions (Bryman and Bell, 2007). Therefore, the researcher must provide the interviewee
the opportunity to decline to answer a question.
Finally, due to the design of the research, deceiving the interviewees was not needed. As
such no measures to minimize deception have been used.
Page 27
6. Outcomes
This chapter will answer the research questions with the help of the conducted research.
As a second step the insights are compared and contrasted with the existing literature.
6.1. Which factors influence investors in their investment

decision making?
According to the interviews conducted with the investors, the main driver that influenced
investors were emotions. This goes hand in hand with the literature, where emotions are
mentioned as an important factor. However, normally emotions do rather play a role for
other crowdfunding models, but not for equity-crowdfunding. On the other hand, the
interviews suggested that monetary returns did not play a role at all. The emotional factor
plays such a big role, that most investors do not expect any additional return besides the
one they already got (in this particular case the discount of a watch).
As one investor commented: “I wanted to support the oldest watch manufacturer.”

Another investor noted: “It has to be a good idea. Maybe you have to have an emotional
attachment like me. As I read about the project I immediately thought that that’s something
for me.”
One investor even worked for the company before. Therefore, he was also affected
emotionally. However, he was affected in a different way in comparison to other investors
as he did not invest because of the story of the project and the affinity to watches. He
invested because he worked for the company and therefore built up an emotional
connection to the company during the time he worked for Dubois et fils. Nonetheless, this
is rather an exception. Another respondent also said that it appealed him being part of a
project.
Furthermore, the literature mentions monetary reasons as a driver for investors in their
investment decision making, especially for equity-crowdfunding. Nonetheless, no investors
noted it as important for their decisions related to this certain crowdfunding project.
However, the fact of getting an attractive reward was also important for some investors. But
this was also connected with the affinity to watches and therefore has also an emotional
character.
Another issue that is stated in the literature is the information asymmetry between investors
and founders. An interesting point mentioned by one investor, who worked as an accountant
for Dubois et fils before was the following:
Page 28
“First I want to…, there is a special offer now, a jubilee offer, and I have said that I first want
to see a balance sheet and an income statement before I sign more shares. As a former
accountant I just have to.”
Thus, some investors want to be more informed than others. However, all investors were
satisfied with the provided information by the founders. Moreover, some said that it is also
a risky investment, because they cannot assess the investment in a proper way like on a
traditional investment where monetary reasons are more important. Nevertheless, the
investors believed in the project and the idea behind it. Investors also mentioned that the
presentation by the CEO (Thomas Steinemann) appealed to them.
Asking the founder of the project, Mr. Steinemann, what influences investors in their
decision making he came up with similar reasons. He first mentioned the emotional factor
that influenced the investors. Second, he referred to the TV report he broadcasted Swiss
wide. Asking, how investors became aware of the project some also mentioned the TV
report, but also the Internet, friends and the newspaper. Thus, this proves Mr. Steinemanns
assumptions.
As a summary of the interviews, the investors are mostly influenced by the following:
 Emotional reasons/interpersonal connection (oldest watch manufacturer/being part

of a project).
 Good communication (avoiding information asymmetry).
 Good advertisement (TV, newspaper, etc.).
 Getting an attractive reward (based on the affinity to the product).
6.2. How can founders improve the possibility being funded?

The conducted research revealed different methods and opportunities the initiators of a
crowdfunding project can use to improve the possibility of being funded. As such, the
insights of the investors, as well as of Mr. Steinmann, the initiator of the crowdfunding
project, will be presented separately and then compared with the existing research.
As already mentioned, the interviews with the investors revealed that emotionality was the
main driver of their investment decision. Monetary return on the other hand did not play a
role at all. The emotional factor plays such a big role, that most investors do not expect any
additional return besides the one they already got (in this particular case the discount of a
watch). Some of the interviewed investors even pointed out that they do not expect that the
Page 29
project will give a good ROI. This being said, the initial return seems to play a role for
investors. On the other hand, some investors mentioned the size of the relative investment.
As such, the available size of the investment and its risk should be small enough to not lead
the investors into bankruptcy and be tolerable when lost.
Another point some investors mentioned was that the initiator should know his target group
and attract them. One investor pointed out that if you find people that are really interested
in your project, the outcome is not really important.
As such, the project must be described in an appealing way, which targets the specific group
of potential investors and makes it more personal. The interviewed investors claimed that
they felt as part of the project.
The interviews revealed that the communication with the potential investors and the
dedication of the initiator are very important.
Finally, the interviews with the investors revealed that all of them had heard of the project
in the media for the first time. Thus, it seems important to work with the media and spread
the word. Even more so, because some investors mentioned that they had never heard of
crowdfunding before.
The interview with Mr. Steinemann, the initiator of the crowdfunding platform led to similar
results. He highlights three key points which influence the success of a crowdfunding
project. These are transparency, emotionality and personality.
He argues that a crowdfunding project can only be successful if it has an emotional basis.
The emotionality has also to be kept when communicating through third parties (such as TV
in the case of Dubois et fils.). Mr. Steinemann adds that you have to give potential investors
the feeling of being part of a project.
Furthermore, the project has to be transparent and make the impression that there is no
hidden agenda.
Finally, to be successful Mr. Steinemann suggests to put the initiator and his team in the
foreground and make themselves believable, as people want to see who they are dealing
with.
During the interview, Mr. Steinemann added additional points which can lead to an
increased success rate of a crowdfunding project.
Page 30
As such, the initiator should know exactly what he wants and how that he wants it. In the
case of Dubois et fils, this led to a script of 3-4 months which entailed the outward
communication strategy of the company.
On the other hand, Mr. Steinemann, who actively invests in crowdfunding projects, did not
use the reciprocity effect. As such, he did not use the network he built with other
crowdfunding projects to receive an investment for the own project in return.
As a summary of the interviews, the initiators can use or address the following opportunities
to make their crowdfunding more successful:
 Know your target group and make the project attractive for them (also with an
appropriate reward).
 Have a good communication strategy.
 Appeal to emotions of the potential investors (make them feel part of a project).
 Be transparent (have an open communication).
 Make yourself believable.
 Provide an affordable investment size.
 Spread the word through different media.
If compared with the existing literature, the outcomes of the interviews show mostly
overlaps. However, the interviews disclosed also some differences.
As such, both, the existing literature and the conducted research mentions that it is
important to know the target group and make the project attractive for them. Furthermore,
a good and open communication strategy as well as building trust is seen as essential for
both, the literature and the interviewed investors/initiator. Lastly, both agree on the
importance of a well-chosen investment sum.
On the other hand, the conducted interviews highlighted the importance of emotionality.
While the existing literature does not heavily stress the importance of targeting emotions in
equity-crowdfunding, the interviewees highlighted it as the most important criterion when
choosing a crowdfunding investment.
Furthermore, even if not contradicting the theory, Mr. Steinemann did not make use of the
reciprocity effect. Hence, he did invest in other crowdfunding projects, but did not receive
investments from the other initiators. Additionally, the non-profit structure did not play a role
Page 31
in this particular case, as the project was initiated in the name of the for-profit company
Dubois et fils.
6.3. How does the relationship between the founders and

investors look like after the project has been initiated (after
the funding phase)?
In general, communication is significant for the investors. One investor mentioned: “You are
not just number xy and you are included in the whole procedure. This is not the case in
other investments.”
Another aspect pointed out was the fact of regular shareholder events. Thus, one investor
commented:
“Yes I went to Basel once, there was a Shareholder event. So I got to see the new buildings.
Then I told Mr. Steinemann that if he would have an automatic watch with a big date display
I would buy it. That was last year, and then he told me that next year, so this year, there
would be one. That’s why I am here and there is actually one.”
Therefore, communication after the funding phase is crucial, also for generating future
revenues, but more importantly, to have a strong relationship to the investors. Also the fact
of being a part within a community was mentioned by investors and is coherent to the
existing literature. As another respondent commented:
“We have had contact 3 or 4 times. But it is very proactive and promptly and regular. One
thing that is really exciting and what they do well is that they really try to be close to the
people. At the moment it is a very close buyer’s community, in comparison to Rolex, for
instance. And they really try to call attention to their brand.”
Another investor noted: “As a shareholder you are continuously informed when something
happens, for example when a new reseller has been found. If you are not interested you
just do not open the E-Mail and simply go to the general assembly.”
When interviewing Mr. Steinemann, he mentioned similar aspects. Thus, a good

relationship is crucial to him. Also the fact that people felt like pioneers and part of the
company strengthened the relationship to the company.
Page 32
Mr. Steinemann noted: “That was the surprise, that the shareholder are unbelievably active.
We quickly realized that the shareholders are happy with the investment they made. They
felt like pioneers and part of the company. Then we enlarged the concept and made them
brand ambassadors. That made us have a very close relationship with most shareholders.
That is also very important for the project. If you just want the money and do not want the
shareholder to be involved otherwise, it starts to be difficult.”
Therefore, one can say that the findings during the interviews and what existing literature
tells goes hand in hand. Thus, founders try to create a long-term relationship, whereas
investors often want to become part of a community.
6.4. Which factors increase/decrease the possibility of a

crowdfunding project being successfully financed?
The grand tour question serves as a summary of the preceding subchapter 6.1 - 6.3. As
such, it is important for an initiator of an equity-crowdfunding to know what influences the
investors in their decision-making and design the project accordingly.
The interviews with the investors and the CEO of Dubois et fils have led to the following
conclusions:
Investors are mostly driven by their emotions when choosing an equity-crowdfunding

project. Thus, it is important for the founder to choose the appropriate reward for the project.
The interviews shed to light that investors want to be part of a project. Furthermore, a key
requirement for investors is a good and open communication by the initiator of the project.
Finally, as crowdfunding does not seem to be well known by potential investors, it is
important to create awareness through advertisement. Here again, the emotions of the
investors have to be targeted.
According to the interviews, initiators of equity-crowdfunding can improve the success of

their project by knowing exactly what they want and how they want it. Therefore, it is
important that they know their target group and make the project appealing and personal to
them. This includes a high level of transparency of the project so that investors do not get
the feeling of a hidden agenda. Provide transparency is especially important as investors
want to be part of a community. As investors do not consider equity-crowdfunding projects
investments, which provide a monetary return, it is important to provide affordable
investment sizes.
Page 33
6.5. Other findings

Even though not directly addressed by the research questions, the interviews shed to light
different findings which might be interesting for people wanting to conduct or further
research crowdfunding.
It is worthy to mention that most interviewees did not see crowdfunding as investment in the
traditional way. As such, as already mentioned in the previous subchapters, the emotional
value and not the monetary return are in the foreground.
Furthermore, most of the investors did not know crowdfunding before the Dubois project.
They first came in contact with it through the media coverage this specific project had.
According to the interview with Mr. Steinemann, people interested in an equity-

crowdfunding must be aware of the juridical challenges, such a project entails. In
Switzerland, one has to evaluate if the project is considered a public offering.
If this is the case, the company must provide a share issues prospectus and a revised
closing account. Furthermore, the legal situation in other countries has to be analysed as
well. Following the law, if investors from the EU are targeted, the share issue prospectus
has to be deposited at least in one member country.
The USA have adopted a new law, the jobsact, last year. The law differentiates between
professional investors (so called “accredited investors”) and other investors. Of the
accredited investors, which have to possess more than $ 1 million in their account and earn
more than $ 200’000.00 a year, a company doing equity crowdfunding can have as many
as they like. On the other hand, only 35 of the other investors can be targeted with the same
offer. However, according to the interview with Mr. Steinemann, this law can be
circumvented by providing different offers (thus allowing 35 investors for each offer).
Another challenge according to Mr. Steinemann is that the crowdfunding intermediaries do

not support stock offerings and are not well suited for luxury products.
Lastly, Mr. Steinemann raised the issue that equity-crowdfunding can lead to a high amount
of shareholders, which can be difficult to manage. As such, he introduced an online
shareholder platform where most communication passes through. This method significantly
reduces the administration time and allows for an increased number of shareholders.
Page 34
6.6. Insights for further research

The underlying paper should encourage further research in the field of crowdfunding in
general and more specifically on equity-crowdfunding. As such, the findings of the case
study can serve as basis for further research. Of special interest would be the influence of
emotionality and monetary returns on equity-crowdfunding.
Even though, existing literature does not regard emotionality as primary driver in equity-
crowdfunding, our results indicate otherwise. On the other hand, monetary returns did not
play a major role in our conducted research. Thus, the driver for investing in equity-
crowdfunding could be analysed further. Associated with the emotionality, our case study
indicated that investors do not consider equity-crowdfunding investments, which are more
related with monetary returns. Future researchers could therefore analyse in more detail
the differences between traditional investments in stocks and crowdfunding.
7. Limitations and Potential Problems

For these findings to be more reliable, further research has to be conducted. Due to the
limitations of the data collection, with five interviews with the investors and one interview
with the founder, our sample size is rather small. Nevertheless, we have focused on one
company, in order to keep the environment as consistent as possible and to get an in depth
understanding of the case. Furthermore, we have had very limited time for conducting the
interviews with the investors, as we held them during a shareholders’ event. This entails a
further potential problem. Thus, we could not expect them to spend a long time with us. The
shareholders attending the event are most likely pleased by the results of the equity-
crowdfunding project. However, there might be investors, which see the project more
pessimistically and therefore would have led the research to other outcomes. In addition,
the time was limited according to the guidelines of the module “Practice oriented Project”.
Page 35
8. Bibliography
8.1. Literature
Ahlers, G., Cumming, D., Guenther, C. and Schweizer, D., 2012. Signaling in Equity
Crowdfunding. [online] Available at:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2161587
[Accessed 29 January 2015].
Anon. 2014. Raising crowdfunding’s appeal. The business times. [online] Available at:
http://search.proquest.com/docview/1518862051/C84E666A98C0439DPQ/13?accountid=
15920 [Accessed 24 April 2015].
Bacon, J., 2013. Crowdfunding: Money talks and connects. Marketing week (online).
[online] Available at:
http://search.proquest.com/docview/1420352243/C84E666A98C0439DPQ/19?accountid=
Beier, M., Früh, S. and Wagner, K., 2014. Crowdfunding für Unternehmen – Plattformen,
Projekte und Erfolgsfaktoren in der Schweiz. Forschungsbericht HTW Chur, [online]
Available at:
http://www.htwchur.ch/fileadmin/user_upload/institute/SIFE/3_Forschungsthemen/Start-
up/CrowdfundingKMU_Forschungsbericht20140428_final.pdf
Beier, M. and Wagner, K., 2014. Das richtige Timing beim Crowdfunding. Eine explorative
Studie zu Projekten auf 100-days.net. HTW Chur, Schweizerisches Institut für
Entrepreneurship, [online] Available at:
http://www.htwchur.ch/fileadmin/user_upload/institute/SIFE/3_Forschungsthemen/Start-
up/Crowdfunding_Timing_BeierWagner_2014.pdf [Accessed 16 April 2015].
Belleflamme, P., Lambert, T. and Schwienbacher, A., 2013. Individual crowdfunding

practices. Venture Capital: An International Journal of Entrepreneurial Finance. [online]
Available at: http://perso.uclouvain.be/paul.belleflamme/papers/VC2013.pdf
[Accessed 16 April 2015].
Page 36
Blohm, I., Leimeister, M., Wenzlaff, K., Gebert, M., 2013. Analyse, Perspektiven und
Erfolgsfaktoren innovativer Unternehmens- und Projektfinanzierungsformen. Epubli
GmbH. [online] Available at:
https://books.google.de/books?hl=de&lr=&id=BJBCAgAAQBAJ&oi=fnd&pg=IA1&dq=Bloh
m+Crowdfunding-
Studie+2013+2013++Analyse,+Perspektiven+und+Erfolgsfaktoren&ots=5lEV6tv9C0&sig=
tLn_Xtgs8MH-Jb1YXlLAPJRnyVI#v=onepage&q=Blohm%20Crowdfunding-
Studie%202013%202013%20%20Analyse%2C%20Perspektiven%20und%20Erfolgsfakto
ren&f=false [Accessed 19 February 2015].
Bryman, A. and Bell, E., 2007. Business Research Methods. 2nd ed. New York: Oxford
University Press Inc.
Creswell, J. W., 2003. Research design: Qualitative, quantitative, and mixed methods
approaches. 2nd edition. Thousand Oaks, CA: Sage Publications.
Duboisfils.2015a. Projektpräsentation. [online] Available at: http://duboisfils.ch/de/ueber-

dubois/crowdfunding/projektpraesentation [Accessed 15 March 2015].
Duboisfils.2015b. Crowdfunding. [online] Available at: http://duboisfils.ch/de/ueber-

dubois/crowdfunding [Accessed 15 March 2015].
Gerber, E., Hui, S. J., Kuo, P., 2013. Crowdfunding: Why people are motivated to post
and fund projects on crowdfunding platforms. Creative Action Lab. [online] Available at:
http://www.juliehui.org/wp-content/uploads/2013/04/CSCW_Crowdfunding_Final.pdf
[Accessed 23 April 2015].
Haas, P., Blohm, I. and Leimeister, J. M., 2014. An Empirical Taxonomy of Crowdfunding
Intermediaries, [online] Available at:
https://www.alexandria.unisg.ch/export/DL/238838.pdf [Accessed 16 March 2015].
Hartley, E., 2010. Kiva.org: Crowd-Sourced Microfinance and Cooperation in Group

Lending [online] Available at:
http://dash.harvard.edu/bitstream/handle/1/3757699/Hartley_Kiva_DASH.pdf?sequence=
2 [Accessed 29 January 2015].
Page 37
Hemer, J., 2011. A snapshot on crowdfunding. Fraunhofer Institute for Systems and
Innovation Research ISI, [online] Available at: http://www.isi.fraunhofer.de/isi-
wAssets/docs/p/de/arbpap_unternehmen_region/ap_r2_2011.pdf
Kickstarter. 2015. Kickstarter. [online] Available at: https://www.kickstarter.com/

Kleemann, F., Voss, G., Rieder, K., 2008. Un(der)paid Innovators: The commercial
Utilization of Consumer Work through Crowdsourcing. Science, Technology & Innovation
Studies. [online] Available at: http://www.sti-
studies.de/ojs/index.php/sti/article/viewFile/81/62 [Accessed 24 April 2015].
Laird, M., 2013. Swissinfo. Crowdfunding rettet älteste Uhrenfabrik, [online] Available at:
http://www.swissinfo.ch/ger/crowdfunding-rettet-aelteste-uhrenfabrik/35270008
[Accessed 15 March 2015].
Lambert, T., Schwienbacher A., 2010. An Empirical Analysis of Crowdfunding. Journal of

Business Venturing, [online] Available at:
http://www.crowdsourcing.org/document/an-empirical-analysis-of-crowdfunding-/2458
[Accessed 19 February 2015].
Massolution, 2013. 2013 CF. The Crowdfunding Industry Report. [online] Available at:
http://www.crowdsourcing.org/editorial/2013cf-the-crowdfunding-industry-
report/25107?utm_source=website&utm_medium=text&utm_content=LP+bottom&utm_ca
mpaign=2013CF+Launch [Accessed 19 February 2015].
McCaslin, M. L. and Wilson Scott, K., 2003. The Five-Question Method For Framing A
Qualitative Research Study. The Qualitative Report, [online] Available at:
http://www.nova.edu/ssss/QR/QR8-3/mcaslin.pdf [Accessed 29 April 2015].
Mitra, D., 2012. The role of crowdfunding in entrepreneurial finance. Delhi Business
Review, [online] Available at:
http://www.delhibusinessreview.org/v_13n2/v13n2g.pdf [Accessed 30 January 2015].
Page 38
Mollick, E., 2013. The dynamics of crowdfunding: An exploratory study. Journal of

Business Venturing, [online] Available at:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2088298 [Accessed 16 April 2015].
Moritz, A. and Block, J., 2013. Crowdfunding und Crowdinvesting: State-of-the-Art der
wirtschaftswissenschaftlichen Literatur. Zeitschrift für KMU und Entrepreneurship,
Forthcoming, [online] Available at:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2274141
Mwangaguhunga, R., 2012. The Growing Power of Donation-Based Crowdfunding

Campaigns. [online] Magnet Media, Inc. Available at: http://www.magnetmediafilms.com/
blog/the-growing-power-of-donation-based-crowdfunding-campaigns
Ordanini, A., Miceli, L., Pizzetti, M. and Parasuraman, A., 2011. Crowd-funding:
transforming customers into investors through innovative service platforms. Journal of
Service Management, [online] Available at:
http://www.emeraldinsight.com/doi/abs/10.1108/09564231111155079
Puccinelli, M. N., Goodstein, C. R., Grewal, D., Price, R., Raghubir, P., Stewart, D. 2009.,
Customer Experience Management in Retailing: Understanding the Buying Process.
Journal of Retailing, [online] Available at:
http://search.proquest.com/docview/228655649/744CD023AFC04650PQ/1?accountid=15
Wash, R. and Solomon, J., 2014. Coordinating donors on crowdfunding websites.

[online] Available at: http://dl.acm.org/citation.cfm?doid=2531602.2531678
Wheat, R., Wang, Y., Byrnes, J., Ranganathan, J., 2013. Raising money for scientific
research through crowdfunding. Trends in Ecology & Evolution. [online] Available at:
http://www.sciencedirect.com/science/article/pii/S0169534712002984
Page 39
World Bank, 2013. Crowdfunding’s Potential for the Developing World. 2013.
[online] Available at: http://www.infodev.org/infodev-files/wb_crowdfundingreport-v12.pdf
Zvilichovsky, D., Inbar, Y. and Barzilay, O., 2014. Playing both sides of the market:
success and reciprocity on crowdfunding platforms. [pdf] Recanati Business School , Tel
Aviv University. Available at:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2304101 [Accessed 16 April 2015].
Page 40
9. List of figures
Figure 1 Capital provision by complexity ........................................................................ 9
Figure 2 Crowdfunding process with intermediaries ..................................................... 14
Page 41
10. Appendix
10.1. Interviews
Interviewer: Oscar Merri and Jonas Josef (interviewer, Master students at FHNW)
Interviewees: Investors (anonymous) and CEO (Mr. Steinemann)
Transcript: Oscar Merri and Jonas Josef
Interviews held on the 22nd of March 2015
Interview with Investor 1:
Interviewer: How did you find out about the project?
Investor: I dear friend of mine wrote me an E-Mail with the recommendation. He asked
me if I was interested in investing in the project. That was very early in the
project phase. It was kind of an insider information as the project did not have
gone public yet.
Investor 2: It was very different for me. Actually he (points to investor 1) made a lot of
advertisement for the project. He even invited people to Dubois. So that was
actually how I got the first contact with the company. I think a lot of investors
joined the company through word of mouth recommendation.
Interviewer: Ok. And why did you choose Dubois et fils? Or did you already made prior
investments in the company?
Investor: Well, I actually read the E-Mail my friend sent me and decided do not invest in
the company. So I am actually not one of the very first investors. I actually got
interested when my friend asked me if I had seen the TV broadcast with
Dubois. You could say kind of in the second round. With a lot of luck I could
sign some shares, also due to the contacts I have with the friend I told you
about. The reason why I did not invest the first time I heard about the company
was simply because I did not have the required cash due to other projects I
had running at this time. I told to myself I don’t just invest CHF 3’000 or CHF
5’000 for such a project. The thought of having one of 99 watches of the oldest
Swiss watch manufacturer was the reason why I choose the project instead of
supporting a big company. Here I see that there is a lot of potential and the
success supports this claim. And that my friends told me that this is a good
Page 42
project, I also want to invest in it, is even more of an affirmation that we are on
the right track. And the presentation by the CEO Thomas Steinemann at the
first general assembly being a part of the shareholder family with all this
dynamic, it is just a confirmation for me. And at the end with the resale value
of the watch, well I would not even consider to resale it, like a capital
investment, but having a watch on my wrist from one of the oldest watch
manufacturers its already confirmation enough.
Interviewer: So you could say it’s really the emotional factor for you both and not really a
monetary return.
Investor: Exactly, the emotional factor.
Interviewer: Ok, and was it actually the first crowdfunding project in which you invested?
Investor: Yes yes.
Interviewer: And also for you? (to investor 2)
Investor 2: Yes for me too.
Interviewer: Did you invest in other projects?
Investor: No, because actually crowdfunding is mainly used in the arts scene. So it was
really the first time I was confronted with crowdfunding and the term itself.
Interviewer: Ok. What made the project so interesting besides maybe the emotional factor?
What would you say were the points that made you invest in the company,
made the company interesting for you?
Investor: I would say the team itself that I met personally confirms that I made a good
investment. There are huge sympathies towards this group.
Investor 2: Yes, they are highly motivated people with whom you like to work together.
Interviewer: How would you describe the relationship between you and Dubois et fils?`How
do you have contact, how frequently?
Page 43
Investor: I would say I have contact about five to six times a year. It is a friendly contact
I have.
Interviewer: Is it personal contact, through the phone or how do you exactly communicate
with each other?
Investor: Through all means of communication. I am kind of a spokesperson of the

company as I have a lot of friends sharing the passion for watches. We men
do not have other jewellery, I have the chance that I have some friends sharing
the same hobby as I do. So I just asked these friends and motivated them to
sit in with us without having an obligation to purchase something. The success
now gives us the confirmation.
Interviewer: Where do you exactly see the advantages of crowdfunding?
Investor: Advantages?
Interviewer: Yes exactly, if you would compare it to a “normal” investment in let’s say VW.
Investor 2: I think you cannot really see it that way. I could not say I have advantages
because of that or I could profit from it, as we don’t really want a profit. It’s
more about friendship.
Investor: Friendship, yes.
Investor 2: it’s more about the exchange with our peers, about nurturing the mutual
hobby.
Interviewer: Okay, I think you have already answered all our questions. Or maybe just the
last question. Do you expect anything in return from the project?
Investor: No.
Interviewer: So it’s really just about the emotional value you get.
Investor: Yes.
Page 44
Investor 2: Exactly
Investor: I think the hobby itself and the philosophy with the general assembly where
everybody meets and have the same. I don’t think that there is any shareholder
who says: “oh, now I have this watch, I am going to sell the watch and make
a CHF 1’000 profit”. I do not really think we have here any comrades who are
here to trade the watches for a profit, which can be the case with other shares,
where you just want to have a quick return on investment. That’s why I think
you have to support this whole project. It’s very interesting to track the whole
process and I have to say the communication is very good. As a shareholder
you are continuously informed when something happens, for example when a
new reseller has been found. If you are not interested you just do not open the
E-Mail and simply go to the general assembly. But we two are very interested
how the project is going…
Investor 2: Yes, yes.
Investor: Mr. Steinemann invested a lot of money and lifeblood, and they notice this,
when you are in front of someone and you can back-up 200% what you say.
And when it backfires…
Investor 2: then it backfires.
Investor: We do not hope for it naturally. We know so many people who are involved in
this.
Interviewer: From what it seems you could basically say it’s like a club of like-minded
people.
Investor: Yes
Investor 2: That’s exactly it.
Interviewer: The communication between the investors seems to be a bit stronger too.
Page 45
Investor: I think so too. That’s what makes the difference. The enthusiasm for beautiful
things.
Interviewer: What you could basically say is, that emotions play a bigger role than in
“traditional” investments.
Investor: Absolutely.
Investor 2: Indeed.
Investor: You can notice it also here, we ask each other: “hey when are you going to
the get-together?”, “well I’m going from 10:00 to 12:00”, “okay, I’m coming too
from 10:00 to 12:00”. That way we also see each other again. It is not just
about drinking a coffee together, but also to see each other’s again. Well we
coincidentally bumped in each other on Friday for another project but
otherwise it is an interesting thing here, to meet each other and knowing the
others have the same hobby. I think also with this principle, kind of a pyramid
scheme, because these are people, I mean, we are in the upper price range,
and with this bonus they have with the voucher, the watch is also affordable
for the average Joe….
Investor 2: That is true.
Investor: I invest CHF 2’000.00 or CHF 3’000.00 with this voucher I get. And when they
go to someone and they ask: “hey, that’s a beautiful watch you have”, “thanks,
it’s a Dubois, 230 years old”, “ah, I do not know the company”. And that’s how
you get into a conversation with someone. Of course we have the interest that
the people spread the word then. The big advantage is, the limitation to 99 or
33 pieces.
Investor 2: Yes, exactly. I think so too. Actually I saw in old histories, that they always had
a limitation, sometimes from 2’000 to 3’000 pieces. So that’s obviously the
strategy of Dubois. So not this mass production but more individual.
Interviewer: Having something unique.
Investor 2: Yes exactly. That is the selling proposition. That you can choose in a selling
space the watch number that is still available.
Page 46
Investor: Yes, Yes.

Investor 2: Recently I saw someone selling a Dubois, an old one, number 1291, so the
year of the confederation, and has purposely described it that way.
Investor: I do not know if you have seen the new models yet.
Interviewer: The prototypes that are displayed?
Investor: Yes, I already wrote, without seeing the watch, “you have to put aside number
55 for me”. Because I am 55 years old.
Investor 2: *laughs*. So you have to sell it next year.
Interviewer: So you buy each year a new one.
Investor: Yesterday I, Yesterday I, you do not have to record this do you?.
Interviewer: No, not necessarily.

Page 47
Interviewer: How did you find out about the project and how did you become an investor?
Investor: Mainly through the media, TV.
Interviewer: And then you took notice…
Investor: Exactly, it made me curious and it just interested me.
Interviewer: And what fascinated you about it?
Investor: The idea in general and the fact that it is about an old and very traditional
company.
Interviewer: So it was rather the emotions that you persuaded to it or are you also a watch
enthusiast?
Investor: You can’t adopt the project 1:1 to me but it was indeed the branch, so that it
has to do something with watches but also the whole package of the project
appealed me.
Interviewer: And are you also shareholder of different investments or is this your first
investment?
Investor: No, this is not the only one, but in the sense of crowd funding it is the first
investment.
Interviewer: But you have had several investments….
Investor: Yes…
Interviewer: And did you compare…let’s say this project with other possible investments?
Investor: This project is not really a commercial investment…it was a risky investment,
but it is not an investment with a huge amount of money. The risk as an
investor who invests more money is actually a bit higher.
Page 48
Interviewer: So you did not choose the investment for financial reasons but it was rather
self-interest.
Investor: Yes.
Interviewer: Do you see any disadvantages in regards to the crowdfunding project?
Investor: For me personally not really and for the project itself… if the project is
successfully in the end and they raised their capital so that they have
something to work with….the future will show it! But for me…I don’t see there
any disadvantages.
Interviewer: And do you have any selection criteria for your investments if you invest in
other companies, for instance? What are you looking for?
Investor: Of course, the risk plays an important role. It has to be in a tolerable dimension.
But that’s the case for every investment you make. What is the risk in relation
to the invested money..? If this fits for you…I think there are further reasons
but this is the most important one…that you can estimate the risk.
Interviewer: And how is the relationship to Dubois in comparison to other investments. Is it

more intensive or different and how do you communicate with Dubois?
Investor: We do not communicate that often. We have had contact 3 or 4 times. But it
is very proactive and promptly and regular. One thing that is really exciting and
what they do well is that they really try to be close to the people. At the moment
it is a very close buyer’s community, in comparison to Rolex, for instance. And
they really try to call attention to their brand. In this sense and how they act on
the market, Dubois is doing a good job. Also crowdfunding made the brand
aware in peoples mind, especially in interested and specific communities.
That’s what they really do good.
Interviewer: Do you expect any rewards as a shareholder?
Investor: Basically investors expect rewards like dividends or discounts on watches. But
for my investment with that specific capital the rewards I get are very good I
Page 49
would say. I don’t expect any further rewards. But the rewards…that’s a thing
that is not unimportant.
Interviewer: Ok, so we are finished with our questions. So, that’s it! Thank you very much
for your time!
Investor: No problem and good luck with your project!
Interviewer: Thank you very much!

Page 50
Interviewer: How did you find out about the project?
Investor: From the newspaper. But the first crowdfunding round was already over.
Interviewer: So how did you manage to invest in the company? In the second round or….
Investor: No, I worked for Dubois in 1964…
Interviewer: Ohhh, interesting.
Investor: … then I wrote Mister Steinemann an E-Mail that I would like to sign some
shares but he told me that there were no shares left for Switzerland, but only
for the USA. He then told me, that he would do an exception, as I am the oldest
former employee of Dubois et fils.
Interviewer: That was nice of him. So did you work in Le Locle?
Investor: Yes exactly, but not that long.
Interviewer: So are you a watchmaker?
Investor: No, no, I am a commercial clerk. I did there my apprenticeship. So I went to

Le Locle to learn French, but I only had to do German correspondence.
Interviewer: Why did you choose to invest in the company? Because you are a former
employee?
Investor: Yes indeed.
Interviewer: So it’s more due to an emotional attachment to the company?
Investor: That exactly the reason.
Interviewer: Ok, where you already a shareholder somewhere else before you invested in
Dubois?
Page 51
Investor: Yes, I am a gambler.
Interviewer: I understand. Was it the first crowdfunding project you invested in?
Investor: Yes.
Interviewer: Did the relationship between you and Dubois et fils change after the
crowdfunding project?
Investor: Yes I went to Basel once, there was a Shareholder event. So I got to see the
new buildings. Then I told Mr. Steinemann that if he would have an automatic
watch with a big date display I would buy it. That was last year, and then he
told me that next year, so this year, there would be one. That’s why I am here
and there is actually one.
Interviewer: I see, you will get a new watch today.
Investor: Exactly, there will be a new one for me. I got this one (shows to his wrist) for
my 50th birthday. Now I am 20 years older.
Interviewer: Beautiful. So you will get the one that is displayed but is still a prototype.
Investor: Yes, they will come out in June.
Interviewer: Ok. What would you say is the difference between *normal” investments and
this investment here over crowdfunding.
Investor: I do not know yet what the difference is. First I want to…, there is a special
offer now, a jubilee offer, and I have said that I first want to see a balance
sheet and an income statement before I sign more shares. As a former
accountant I just have to.
Interviewer: Have you made other investments beside Dubois et fils?
Investor: Yes, but not over crowdfunding.
Interviewer: So not crowdfunding, but you are shareholder in other companies.

Page 52
Investor: Yes. So mainly shares.
Interviewer: Where do you see the advantages and disadvantages of crowdfunding?
Investor: The disadvantage is maybe that it is not known very well. (Mr. Steinemann
walks by) You do not know what Mr. Steinemann will do with the cash.
Steinemann: I already bought an Island in the pacific (laughs).
Interviewer: Do you also see advantages of crowdfunding?
Investor: Until now I think it’s more personal. You practically know everyone who works
for Dubois. As I worked in Le Locle I practically had only to do deal with
smugglers.
Interviewer: In your eyes, how can crowdfunding initiators improve their chances of being
funded?
Investor: It has to be a good idea. Maybe you have to have an emotional attachment
like me. As I read about the project I immediately thought that that’s something
for me.
Interviewer: So if it would be another watch you maybe would not have invested. It’s more
emotional than a monetary incentive.
Investor: Yes. To be honest I do not think that the project will be profitable. It will likely
be a loss for me. But I already lost so much in the stock exchange, it does not
really matter.
Interviewer: At least here you have an emotional attachment.
Investor: Exactly.
Interviewer: Do you in general have selection criteria when you select a company or a
project to invest in?
Page 53
Investor: I read a lot and look what is currently in or could be in the future. It’s also a lot
about gut feeling. If you invest in Roche or Novartis, it is not that much of a
problem but if you invest in a smaller company you have to be informed or you
just trust in it.
Interviewer: Have you invested in other crowdfunding projects after Dubois et fils?
Investor: Honestly I did not even hear that it exists or I just do not read about it. I do not
know. Dubois was the only one I have read something about.
Interviewer: There are actually several forms of crowdfunding projects. Dubois was one
involving the purchase of shares but there are also projects where you maybe
just donate money because you like the project. But these are mostly projects
with a social causes. There are projects which grant you a pre-purchase of a
product. So you see, there are actually a lot of different crowdfunding forms.
Crowdfunding is especially known in the US but is slowly also coming to
Europe.
Investor: I would support donations. But projects promising something are not really my
case.
Interviewer: Would the selection criteria be any different for Crowdfunding projects than
they are for “normal” investments? As I have the impression from our
conversation, the selection criteria for “normal” investments would be more
monetary, so get a monetary return, and for crowdfunding it would be other
criteria, more emotional ones.
Investor: Yes.
Interviewer: Do you expect other things in return from this project?
Investor: No, no. I already told Mr. Steinemann that I want a general assembly and have
a look at how the things look like. As former accountant I have to know how
the company is running. Then I maybe take the offer he has now of buying 100
shares for CHF 1785. Maybe I do it. Or, ohh no, the offer will not be available
anymore. I told him I will start to sign shares again when I see the income
statement.
Page 54
Interviewer: I understand, you just have to as former account.
Investor: Exactly, Otherwise I could just donate it somewhere.
Interviewer: Ok, thank you very much. That would be it with our interview. Thank you very
much for your time.
Page 55
Interviewer: How did you find out about the project or how did you become aware of it?
Investor: Through the internet, but how exactly I cannot tell how. It just came across
some day and interested me.
Interviewer: And why did you invest in the end?
Investor: The project was very interesting and good featured and described and then I
just thought…well, an investment with the remaining money…let’s just invest
in it.
Interviewer: And was it rather an emotional investment?
Investor: Not at the beginning. At the beginning I thought that it is a project within a
financial frame that was ok. Also as a share transaction that…if it did not
workout…the loss would have been tolerable. And that’s the reason why I
invested. It was the first time I did something like that…
Interviewer: You mean crowdfunding…
Investor: Yes.
Interviewer: Ok, and was the intention rather profit driven?
Investor: No, the thought of getting a profit was not really existing. It was rather
about…that I am a watch enthusiast and I saw the chance to get the advantage
to have access to discounted watches. This was an intention, of course,
because I really like watches and I like to wear them. This was maybe the
starting point. And the relation…if you let’s say…watches in the sector of Rolex
where it starts at around 50.000 €… getting watches in an acceptable frame,
handmade and to reasonable prices. This was also an aspect for the
investment decision.
Interviewer: Ok, and does the communication and the relationship to Dubois differ, to let’s
say classical investments in other companies?
Page 56
Investor: Yes, of course! A classical stock transaction is a rather impersonal business,

because I am not in the position to buy “huge packages”. I handle rather small
transactions. So, the relation is completely different in comparison to a typical
stock transaction.
Interviewer: Have you already executed other investments?
Investor: Yes, basically in the financial sector.
Interviewer: And do you have any selection criteria when you decide in which project to
invest? Especially in the view of the crowdfunding project if you compare a
typical investment and the crowdfunding project?
Investor: For getting quick money I would prefer a stock transaction, of course. I mean
a traded stock. But in this sense I am very flexible and do not belong to those
who buy stock packages and discover them after 10 years again. I am rather
a trader on the stock market, but only private. Just buying and selling. But
making bad decisions is sometimes also part of that business. So, behind the
stock transaction raising your capital is more important and the investment in
the crowdfunding project has more a long-term character.
Interviewer: So, that’s the main difference to crowdfunding…
Investor: Yes. I mean the classical investment is more about playing with the money.
Interviewer: Ok, and with that you really expect rewards, such as dividends.
Investor: Not really dividends but profit! Investors who are looking for dividends invest
rather for the long run.
Interviewer: Do you see any disadvantages regarding crowdfunding?
Investor: I would say that it is also risk capital like a stock because you can completely
lose the money. If the system/product does not work then it can lead to a total
loss but maybe it’s is not the same because I have a counter value, or I get at
least a part of the value back with the watches, investors get.
Page 57
Interviewer: How could initiators improve the possibility to get financed? Or what would
make the project even more attractive in your eyes?
Investor: This project was already attractive. But you have to attract and find those
people that are really interested. In my case it was just luck, but if you want to
do marketing in the direction that you really want to attract those people… I
mean in that case it is already existing. I was investor from the really beginning.
Of course, you can still get in. But especially in the beginning it is crucial that
you find the target group for your product. That is really crucial. A few days
ago I have read an article about a student in Oxford where studying per year
costs around 30.000 £. And she tried to find investors through public so that
people invest in her, and she really succeeded! So, at least for the first two
semester the money was safe and she could start studying. Unfortunately I do
not know anymore what she was studying but after the studies investors want
to get their money back. Therefore, there are different ways and you have to
find the people who invest in your idea. They reported in that article that some
invested only 10 £ but others also 10.000 £ or 5.000 £. It is always the idea
and how you put it on the market. That is really crucial.
Interviewer: Maybe we have should done the same….
Investor: You still have the chance.
Interviewer: But at least, studying in Switzerland is not as expensive as in England.

Ok, so we are finished. Thanks a lot!
Investor: No problem!
Page 58
Interview with Investor 5
Interviewer: How did you find out about the project or how did you become aware of it?
Investor: It was in the media (DRS Aktuell). I heard 2.5 years ago about it and found it
a good thing to do. Before I didn’t know about crowd funding and that it exists
for this industry. This report in the media fascinated me.
Interviewer: Did you already know about Dufils?
Investor: No, I didn’t know them before. My experience with watches so far, is just that
my father was a watchmaker, but in the 70s when the crisis started, he stopped
with it. The affinity to the metal still exists.
Interviewer: And why did you invest in the end?
Investor: Investment is a wrong description of it. I do not have the expectation that the
project will give a good ROI in the next 10 to 15 years. I wanted to support the
oldest watch manufacturer. And even more thank to the affinity to the watch
industry. Furthermore buying shares from other watch manufacturers like
Rolex is practically impossible.
Interviewer: This investment is maybe also a bit more personal.
Investor: Exactly, more personal, small and manageable. This contributes also to the
familial atmosphere.
Interviewer: Have you been investor before?
Investor: No, that was the first time.
Interviewer: In that case, it was also the first crowdfunding project?
Investor: Exactly.
Page 59
Interviewer: What exactly makes the project respectively the company so special? You
already mentioned that it is the oldest watch manufacturer and that you have
an affinity for it. Where there also other reasons?
Investor: Another reason would be that the company is based completely in

Switzerland. Crucial is also that you have a certain amount of money at your
disposal. If this amount of money is gone, you maybe loose the money but it
does not lead you directly to bankruptcy. Furthermore my affinity to watches
and metal that has always interested me. In principle also the fresh start. It
was risky respectively is still risky. But it is better to start from zero than to
invest in an existing project. This way you are part of the project.
Interviewer: Did the relationship to Dubois et fils change after the project?
Investor: Of course. Before the project I did not know the company. I saw the news
report at 19:00 and at 19:45 I wrote Mister Steinemann an e-mail to ask if the
crowdfunding was still running. He then wrote me the next morning that he
reopened the crowdfunding and that you could subscribe again. So I started
to do some research. Since then I know that the company Dubois et fils exists.
I did not know before, because you could not read anything about it.
Interviewer: Is there a specific reason why you did not choose a traditional investment?
Investor: There is not a specific reason. A) I never did it and B), the method made a
good impression on me. There is something about it. You are not just number
xy and you are included in the whole procedure. This is not the case in other
investments.
Interviewer: Where do you see the advantages and the disadvantages of crowdfunding?
Not necessarily for this project but in general?
Investor: An advantage is surely that projects, which would not get funding from today’s
investors, such as banks, are not discarded so fast. If you have a project, in
which people believe in, they will donate 10, 20, 100 or even 1000$. If it works
or not is not that important because they believe in it. Traditional investments
look different. In a crowdfunding project you do not really expect something.
The next thing that is discussed is the example of Anna Rosinelli who wants
Page 60
to record music in America. Some people say that they also want money to
make holydays in America. To get the money however you need a project.
The other possibility is to invest in public companies. However this is rather
monetary.
Interviewer: How can initiators of such projects increase the possibly of being funded?
Investor: The platforms. They cannot be googled. Well you can, but if you type in
crowdfunding you get just nonsense results. If you could make it with ricardo
or ebay, where you can say this are technical projects, environment and
protection of the landscape, there it should begin. Then you have to report
about it.
Interviewer: Do you have specific selection criteria? Or have you just been convinced by
Dubois?
Investor: It was a clear gut decision. You should not rethink such decisions.
Interviewer: Did you make also other investments?
Investor: Yes, these however are rather monetary. In order to invest in crowdfunding
without having a return, you must invest in things that give a monetary return.
Interviewer: In this case the criteria are different then for the crowdfunding project?
Investor: Exactly. Crowdfunding is a gut decision. It just is about if you want or not. In
the other cases the board of directors is examined, how it is managed, how
the dividend payment looks like, how does the strategic evolution look like etc.
This can be also interesting for crowdfunding, but is less important, a “nice to
know”.
Interviewer: Is the communication important?
Investor: Yes, the communication is important. I want to know how many watches are
sold through retailers, so that you can estimate a bit. It has to be that way, not
that the existing family finances itself or one just lives an abnormal lifestyle.
Page 61
The next couple of years you get the watches for an attractive price, whereas
you have to invest a part each year.
Interviewer: Do you expect something in return from the project? Dividends or something
else?
Investor: No, not really. Dividends not at all. Depending on the share package you can
buy the watches with different discounts. In return you are rather invited to an
event. I do not really expect a monetary return.
Interviewer: That would be it. Thank you very much for your time and the interview.
Interview with the initiator (Mr. Steinemann)
Interviewer: Could you please describe your background, how you got to Dubois et fils?
Steinemann: I grew up in the watch industry. I met the founders of Fossil in 1987. It is an
American watch brand. Later I introduced Fossil in the Europe. I owned two
companies which I sold to Fossil. I wanted to quit in 2006. Fossil asked me if
I wanted to go to Vienna and make Swissmade. 2009 I said that I have to make
something new. My dream was always to oversee an own Swiss watch brand.
As I oversaw an American watch brand for 25 years, this was my focal point.
I made a list with brands which were not in possession of large companies,
had a certain history and were not really successful as they would not be
payable otherwise. Dubois et fils. was always in the top position on my list. In
2010 I heard that the brand was on the market. End of 2010 I came to an
agreement with the German family. That’s how it started.
Interviewer: The Crowdfunding started 2012?
Steinemann: Buying the brand was the easiest thing. You sign and pay, then you own the
brand. Then however, the hard work starts. If you own a brand, which is over
200 years old, one of the oldest in Switzerland and is said to be the oldest
watch manufacture, it is all about how you enter the market and set up the
brand. We have decided, that the history does not influence the future. We
took a white paper, new logo, new positioning in the market, new position of
Page 62
the product, new definition of luxury. This was between 2011 and early 2012.
Then there comes the point where you have to think about financing and
market entry. You notice that banks are not of much help. Private investors
are difficult. We did not find the partner we were looking for. Then read about
crowdfunding in the New York Times. I really liked it, but there was no
connection to luxury. I started to look deeper into the subject and looked at
successful and unsuccessful concepts. Is there a possibility to combine
crowdfunding and luxury? That’s how we got to Equity crowdfunding. We
wanted to bind the investor to the project as we need the support and not just
a short-term relationship where he just gives the money.
Interviewer: But it is a mixed form between equity crowdfunding and pre-selling right?
Steinemann: No, in this case it was not pre-selling, as we said, “you will be a shareholder
and if you invest you have to stay for 7-10 years, because it is a long-term
project and you have to be aware that it is a high risk project. To revive a luxury
brand is difficult and the chances are small. The investors however get an
immediate ROI and you can order a watch with a 50% discount. That was the
deal. The watch however was not preordered but we said: “when we have the
money you can redeem your voucher.
Interviewer: How did the process from the crowdfunding till the beginning of the
implementation look like?
Steinemann: Naturally, there were no examples of others that had done the same. We were
in uncharted waters, did pioneer work. The goal was to do everything through
the internet, as efficient as possible, and to conquer new markets with minimal
expenses. The biggest challenge were juridical. The question was, if we do a
capital increase through our website, is this a public offering or not? It is a
juridical question. If a public offering is offered, it means that you have to make
a share issue prospectus. You have to transparently show your numbers and
the revised closing accounts, etc. Furthermore the question is about how it
look legally in Switzerland, Germany, etc. The lawyers advised us to not do it,
as there were no precedents where you could say it is that way.
Interviewer: Did you have multiple juridical, I mean you have also investors form the USA…
Page 63
Steinemann: In the interest of the project, we decided to make a public offering

corresponding to the CH law. We created a share issue prospectus, interim
financial statements, a revision, project description, laid out the budget and
everything that goes with it. It is like that, if you want to follow 100% the law,
you would have to deposit the share issue prospectus in at least one country
of the EU. Then it would have been save in Europe. We excluded the USA as
the legal situation is much more complicated. We did not deposit the
prospectus in other countries and took the risk. If Germany would have
controlled it and would have said you cannot take German investors for the
public offering, we would have had to go one step back.
Interviewer: Is there any difference in the relationship between crowdfunding investors and
the “normal” investors, in the treatment or the type of the contact?
Steinemann: We just have investors that come from the crowdfunding respectively from the
public offering. As of today, 32% of the share capital is owned by our
shareholders. We own the rest. However there is no difference between the
shareholders. This is very important for us, as we want a) transparency and b)
the same treatment for all investors. That’s how we started the 10.08.12 and
added on our website. At this time we did not show any watches but just said
that it will be a luxury product, that the average price will be 9’000 CHF and
that the watches will be limited.
Interviewer: Did you state at the start of the crowdfunding how many shareholder you want,
set a limit? Also because of the complexity that can emerge?
Steinemann: Our goal was very aggressive. Everybody said that we would not make it. We
wanted 1.5 million and had a minimum investment of 500 CHF. Then we had
investment packages of 500, 1’000’ 3’000, 5’000 and 10’000 CHF. Now you
have to imagine, everybody that had something to do with stock corporation
law said that if you want 1.5 million and the minimum is 500, you will have up
to 3’000 investors. How do you do it? If each shareholder writes two e-mails
per year, you have 6’000 e-mail a year. We wanted to be first company
introducing a paperless shareholder relationship. That means, that we wanted
to transfer the whole relationship to our online-platform. Luckily we started
from the beginning to put the data of the subscription form in our database.
Then we started to develop a shareholder database in parallel. What can you
Page 64
do online and what has to be written? There are huge challenges but we did
it. Afterwards the number of shareholders was not a topic anymore.
Interviewer: You probably had personal contact at the fair?
Steinemann: That was the surprise, that the shareholder are unbelievably active. We quickly
realized that the shareholders are happy with the investment they made. They
felt like pioneers and part of the company. Then we enlarged the concept and
made them brand ambassadors. That made us have a very close relationship
with most shareholders. That is also very important for the project. If you just
want the money and do not want the shareholder to be involved otherwise, it
starts to be difficult.
Interviewer: That means that the motivation of the investors is also emotional, not just
monetary?
Steinemann: It is unambiguous that it just functions on an emotional basis. A pure

investment does not work. Then you could go at the stock exchange and buy
the 20% that have potential. If you get a profit of 5 or 10%, then you are more
or less on the save side. With Dubois you have the opportunity to quintuple or
decuple the stock, but if you invested CHF 500 it does not really matter if you
get CHF 2’500 or CHF 5’000. We also asked the investors not to invest their
whole pension’s fund. Start with a reasonable amount. Today, there are new
investors each week who want to contribute.
Interviewer: The first intuition was from an emotional basis. The investors did not really
look at the potential profit?
Steinemann: Exactly. They wanted to be co-proprietors of the oldest watch manufacture of

the world.
Interviewer: Be part of a project?
Steinemann: Exactly, and then I can buy a watch with a discount. That also triggered the
emotional relationship. For others shared I do not receive a watch or
something else. There are some “play” shares. If you buy a share from Lindt
& Sprüngli you get a suitcase with 3 Kg of chocolate each year. When the
Page 65
general assembly takes place, everyone is going home with this suitcase.
Today, the suitcase is also sent home. We received many positive comments
from investors who came and bought UBS shares five years ago because they
taught it would go from 80 to 180. Today the share is at 15. They shareholder
thus prefer to give us the money. Most of them say the investment is already
forgotten about. I bought a nice watch and all is good how it is. That is why we
do not have such a high pressure. This is important. If the shareholders give
us hell during seven years, it is also difficult.
Interviewer: Do I understand correctly, that this is the first crowdfunding project you take
care of?
Steinemann: Yes, it is the first one I took care of.
Interviewer: Did you personally also invest in crowdfunding projects?
Steinemann: Yes, I do that regularly. There are always amazing things. The last thing was
something like kick-starter, which I like to support. The product, I bought
comes then in six months. There are amazing things. Until now, I got always
something in return. If it has the same value of the investment, is then another
question.
Interviewer: Where do you see the advantages and disadvantages for the investors and
for the company?
Steinemann: It is another initial position. You have to know what you want and how do you
want it. We have now 770 shareholders from 28 countries. We are currently
approaching 1’000 and would like to have 50 countries. Our aim is to steer….
I always say: „Nespresso has one George Clooney, we have 770“. We have a
shareholder blog. That means, the shareholders have access through their
profile and we give them news in a two-week basis. This can be market
analyses or information on new products, new ideas, all sorts of things. We
also make auctions of old Dubois watches and integrate everything like that.
We found out, that what we say to the shareholders is passed on to their family
and friends. If a shareholder is somewhere and his watch is addressed, he
starts to talk about it for 20 minutes, and in an authentic way. But you really
have to know how and where you do it. On the other hand, I always tell myself
Page 66
we have 770 shareholders who talk positively about the brand. Naturally you
can also inverse that. You really have to handle it subtly.
Interviewer: To go back to the platform Kickstarter. You were not on that platform, right?
Steinemann: We could not, because we sold stocks and had a capital increase. There are
no stocks offered through Kickstarter or crowdfunding platforms in general.
There are some individual efforts. There is a platform in Germany now, which
possesses a banking license…. I actually like them and there are further
interesting things. It is always a question. If someone makes leather cases or
t-shirts, then it is not worthwhile, then you do not need shareholders. But in
our case, you have to see, our shareholders which participated in the first
capital increase invested 1.5 million, we had a second capital increase, where
they again invested over 500’000. Our 750 shareholders invested 2.5 million
in equity and then again 2 million in products. You do not just get 50%
discount, you also have to pay 50%.
Interviewer: How do you do that, you have over 700 shareholders, but the watches are
limited to 99. What do you do if everyone wants a watch?
Steinemann: It is like that, we do everything thru our own online shop. If you went to our
website, you have seen, you can order a product, you see the 99 numbers.
The shareholders have a pre-emption right, which means, if we have a new
product, the online-shop goes online tomorrow at six. We have two categories
of shareholders, we have the diamond club members, which own at least 300
shares and more, and we have base shareholders, and then the diamond club
members have 24 hours exclusive pre-emption right, and then it is basically
first-come, first-serve. This means, that the first who is on the website and
clicks on the number one, has the number one limited edition number. That is
how it goes. We have enough watches and enough up our sleeve that
everyone gets a watch. We cannot guaranty that everyone get his limited
edition watch. Some models are sold out and then they are just no more
available.
Interviewer: What influences the investors the most in their decision-making? So now in
Dubois et fils or “traditional” investments, what would you say turned the
balance that some investors said “I invest now rather in Dubois et fils?”
Page 67
Steinemann: I think there are several factors, but I think it is specially the emotionality, that
finally came over. The TV report, which was broadcasted Swiss wide, did
surely contribute too. In “Schweiz aktuell” and right before the news. You could
notice it, the emotionality was right in the TV report, the report was very
emotional, there were a lot of people …., there were a lot of people who went
to our website and sent me money. At the end, I had money on the account
and I did not know from where it came or why. And it were not just 500 francs,
but 5’000 francs, 3’000 francs. Then we had to follow them up and tell the
people that they have to fill in the certificate of subscription first, otherwise we
cannot find out who it was. There were some people, which just invested
because they wanted to save the company. They said such an old company
has to be saved, if not a Chinese or someone else might buy it. They never
have accessed their shareholder account. We are talking about 50-60 people.
Then we have 50-60 people who access it sporadically and the rest is actually
very active. Particularly the first group was very emotional in the first phase
because of the TV report, the newspaper article, and were very engaged. And
the others find it effectively very thrilling and interesting. So we make two
events for the shareholder, the official general assembly, which you could do
also virtually nowadays, you do not need to physically make the assembly. But
we want exactly that, that you meet again, it is always in May or so, and then
we have another event in fall, where the shareholders can also participate,
and there we had in fall, in October last year 300 people. There was a
shareholder; he flew in for these three hours from New York, another from
Hong Kong, we had Germans, Belgians, French, Italians. The people take it
upon themselves to come. We had a Belgian who drove here because of us
and then naturally went also to the watch fair.
Interviewer: Does that mean that there are investors from the USA now?
Steinemann: Yes. There was an amendment of the law last year, jobsact, which allows us
to have investors from the USA, well just... There is this difference between
professional investors, accredited investors or not, and you have to ask that.
If you go to our webpage and type in USA, you will have to answer some
question, “do I have more than one million on my account”, “do I earn more
than $ 200’000”, then I am a professional investor. We can have an unlimited
number of them. If someone says, he does not satisfy these criteria… I can
only have 35 of them, approximately according to the new law. But I could
Page 68
make 3, 4 offers in a row and then I could have 35 each. It is a bit illogical. We
have about 10-15 investors from the USA now, search there also specifically.
Interviewer: To go back to the platforms, you said you invest also in Kickstarter. Did you
also win investors from these platforms, so quasi if you invest…
Steinemann: No, no. I make that as a private person because it repeatedly interest me. I
have been in Mai, ehhh February 2014 to a panel discussion in Los Angeles
with Brian Fargo and Julie Uhrman. They are heroes of course, Brian Fargo
has raised 4 million twice for a game and Julie Uhrman made crowdfunding
over Kickstarter and made over 6 million for a game console. She was the
person, who achieved one million the fastest. These are impressive stories,
which happen here.
Interviewer: In your opinion, how can initiators increase the probability of being funded over
crowdfunding?
Steinemann: Transparency is a very important topic, emotionality is very important and you
need a plan. And you also need ehhhh, the people do not want to see a 5 year
plan with numbers which at the end do not really say anything. Nowadays
everybody knows that paper is patient. But people want know, a) Who is
behind all this, you have to put yourself in the foreground. The people want to
see a face and a person. They want it to be transparent, which goes then
relatively far. If you go to the website today and want to make a stock
subscription, then you can download the annual report for 2013, where my
salary is disclosed and so forth, to create this transparency. Therefore,
transparency, emotionality and personality are important. For me, these are
the three key topics. The more you can make yourself believable, arouse the
emotionality and make the people believe that you are transparent, the more
you increase your chance.
Interviewer: Did something specific change after the Crowdfunding project compared to
before, did something specific…
Steinemann: No, today every shareholder is happy and I say know, when today we would,
when I would arrive with a new project and say, “we have to invest in show
bulls in Argentina, we had a look at it, they make an equity funding, who wants
Page 69
to participate, I am sure most of the investors would participate. We have our

trustworthiness. You can see that also from the fact, that shareholder come
and say they want to invest more money, can my father invest, can I buy
shares for my children, for my brother-in-laws. We had to close temporarily our
platform for Europe because we simply did not want to be overrun. You have
to say also there, that it must be something special to become a shareholder
for Dubois and that is why we do not want 20’000, 30’000 shareholders. The
exclusivity, you cannot say on one side luxury is limited availability; we just
make 99 watches, but then on the other side have three million shareholders.
At least not at this time.
Interviewer: And did you particularly market the platform respectively the crowdfunding
project?
Steinemann: So the offer?
Interviewer: Exactly, so adverted it to the people…
Steinemann: No, the difficulty is to get the traffic on the webpage, so we wrote a script for
3-4 months, how do we work with the press, it was about increasing the
suspense. It was a bit like a crime thriller, who is the murderer at the end. For
us it was like, we started without watch, we should a fraction of the watch, we
showed a little teaser where the watch was foreshadowed. We first showed a
picture of the watch from the back, then from the front. Then, the first watch
came, we also communicated how many investors we have, from which
countries they come, we gave interviews, that is how we worked with the
press, you have to find another approach. Mostly, when someone wants to
launch a watch, they concentrate on the product, and we said we make a good
product for a good price, but we are not the most innovative watch company
for all that has to do with the product. But we are the most innovative Swiss
watch company for everything that is around the product. I think that is how
we managed to move the cage. It is not easy, but the internet gives you so
many opportunities.
Interviewer: How important is the background that you have, now in general for
crowdfunding the background of the initiator, in your case, you already had a
vast experience in the watch industry?
Page 70
Steinemann: So I have this American thinking from the Fossil group… I always made things
that were not that easy. I started to work for Fossil in 1987 when the Swiss
watch industry crisis took an end, Swatch came up, everything wanted Swiss..,
everyone screamed for Swatch, and I said I start to sell American watches in
Switzerland. I think you have to be a bit out-of-the-box, have a vision and
believe in it. Then you can move a lot.
Interviewer: Why exactly 1.5 million, how did you choose this?
Steinemann: Well that was naturally, that we said we want to be save for 1.5 years, we want
to be able to manufacture, we have to make certain investments. You have to
see how much time we invested, also in the product. These are huge stories.
Interviewer: But you set yourself a limit…
Steinemann: Yes, yes.
Interviewer: you did not say, ok, it is successful, let’s increase it to two million
Steinemann: If you do a capital increase, you cannot make it differently. And that’s how the
project description was. We reflected a lot, do we make 800’000, 1 million, is
it better to do three times 500’000? Then we just said no, go for it.
Interviewer: Rather have a high target
Steinemann: Yes, then you also work towards this ambitious target and pursuit it.
Interviewer: That would be it, thank you very much for the interview
10.2. Coding Scheme
Codings
[GTQ] Success Factors
[SQ 1/2] bad communication
[SQ 1/2] bad/unattractive rewards
[SQ 1/2] good communication
[SQ 1/2] good/attractive rewards
[SQ 1] emotional reasons
[SQ 1] exchange within a Community
[SQ 1] factors influencing investors
[SQ 1] information asymmetry
[SQ 1] monetary reasons
[SQ 2] bad public awareness
[SQ 2] good management/education
[SQ 2] good public awareness/Marketing
[SQ 2] improvements for founders
[SQ 3] change in communication
[SQ 3] change in relationship
[SQ 3] long term relationship
10.3. Literature review matrix
Models The role of The role of The role of Success Sub- Sub- Sub-
founders intermediaries investors factors question 1 question 2 question 3
Ahlers, et al., 2012 x x x x
Anon, 2014 x
Bacon, 2013 x
Belleflamme, Lambert and
x
Schwienbacher, 2013
Beier and Wagner, 2014 x
Beier, Früh and Wagner,
x
2014
Blohm, et al., 2013 x x
Bryman and Bell, 2007
Creswell, 2003
Duboisfils, 2015
Duboisfils, 2015
Gerber, Hui and Kuo, 2013 x x x
Haas, Blohm and
x
Leimeister, 2014
Hartley, 2010 x
Hemer, 2011 x x
Kickstarter, 2014 x
Page 73
Models The role of The role of The role of Success Sub- Sub- Sub-
founders intermediaries investors factors question 1 question 2 question 3
Kleemann, Voss and
x
Rieder, 2008
Laird, 2013
Lambert and
x x x
Schwienbacher, 2010
Massolution, 2013
McCaslin and Wilson Scott,
2003
Mitra, 2012 x
Mollick, 2013 x
Moritz and Block, 2013 x x
Mwangaguhunga, 2012
Ordanini, et al., 2011 x x
Puccinelli, et al., 2009 x
Wash and Solomon, 2014 x
Wheat, et al., 2013 x
World Bank, 2013 x
Zvilichovsky, Inbar and
x x
Barzilay, 2014

Equity Based Crowdfunding Success Factor

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Equity Based Crowdfunding Success Factor

Hochgeladen von

Copyright:

Verfügbare Formate

University of Applied Sciences and Arts Northwestern Switzerland FHNW

Crowdfunding: Success factors in the financing phase.

Submitted within the study programme Master of Science in

For the module Practice-oriented Project

Expert Prof. Dr. Rolf Meyer

Submission date 05.06.15

fully and specifically acknowledged wherever adapted from other sources.

We understand that if at any time it is shown that we have significantly misrepresented

accurate to the best of our knowledge.

Olten, 05 June 2015

Jonas Josef Oscar Merri

Figure 1 Capital provision by complexity

Source: Hemer, et al., 2011.

3.1.1. Donation Model

3.1.2. Reward Model

The reward-based model can be separated into crowd-sponsoring and pre-selling/-ordering

Some leading reward-based platforms are Kickstarter (http://www.kickstarter.com/) and

3.1.3. Lending Model

As already shown in Figure 1, crowd-lending is ranked second in regards to their complexity,

3.1.4. Equity Model

3.2. The role of founders

3.3. The role of intermediaries

3.4. The role of investors

Figure 2 Crowdfunding process with intermediaries

Source: Hemer, et al., 2011.

3.5. Success factors

4.1. Which factors influence investors in their investment

According to Ahlers et. al. (2012), especially in equity-crowdfunding, there is a concern

communication is indispensable to overcome most of the information asymmetries. In

 Interpersonal connections between investor and founder.

4.2. How can founders improve the possibility being funded?

 Structure projects as non-profit organizations.

4.3. How does the relationship between the founders and

4.4. Which factors increase the possibility of a crowdfunding

According to the literature, there is a strong tenor saying that communication is

5.1. Type of design used

5.1.1. The company

5.2.1. Sampling strategy

 Capital-seekers must have used crowdfunding.

5.2.2. Data collection

5.2.3. Data analysis

5.3. Researcher’s Role

5.4. Ethical Issues

6.1. Which factors influence investors in their investment

As one investor commented: “I wanted to support the oldest watch manufacturer.”

 Emotional reasons/interpersonal connection (oldest watch manufacturer/being part

6.2. How can founders improve the possibility being funded?

6.3. How does the relationship between the founders and

When interviewing Mr. Steinemann, he mentioned similar aspects. Thus, a good

6.4. Which factors increase/decrease the possibility of a

Investors are mostly driven by their emotions when choosing an equity-crowdfunding

According to the interviews, initiators of equity-crowdfunding can improve the success of

6.5. Other findings

According to the interview with Mr. Steinemann, people interested in an equity-

Another challenge according to Mr. Steinemann is that the crowdfunding intermediaries do

6.6. Insights for further research

7. Limitations and Potential Problems

Belleflamme, P., Lambert, T. and Schwienbacher, A., 2013. Individual crowdfunding

University Press Inc.

Duboisfils.2015a. Projektpräsentation. [online] Available at: http://duboisfils.ch/de/ueber-

Duboisfils.2015b. Crowdfunding. [online] Available at: http://duboisfils.ch/de/ueber-

Hartley, E., 2010. Kiva.org: Crowd-Sourced Microfinance and Cooperation in Group

Kickstarter. 2015. Kickstarter. [online] Available at: https://www.kickstarter.com/

Investor 2: laughs. So you have to sell it next year.