This study is essentially a critical analysis of the journal, “The Dynamics of Crowd Funding” by Mollick, (2013).
Crowd funding is a relatively new concept of raising funds. It is essentially a new way of financing the brand new ventures. The concept of crowd funding has been essentially derived from the concepts of micro-finance and crowd sourcing. But the unique selling point of crowd funding lies in the fact that it facilitates the process of fund raising via an increasing number of internet sites that have been essentially dedicated to the topic. To be more simple crowd funding has been defined as the efforts that have been taken by the entrepreneurial individuals that are in the nature of social, cultural and not for profit initiatives for the purpose of raising funds by the optimum utilization of the internet without standard financial intermediaries.
Crowd funding has been a popular method of collection of funds for a common purpose or objective. There have been numerous examples of campaigns promoting fund raising for charitable purposes utilizing the crowd funding method. Crowd funding has been a potential source of fund raising technique for the establishment of start-up companies, the development of the entrepreneurships and the growth of the small-scale enterprises.
The particular purpose or objective of this study is reviewing the particular journal named the dynamics of crowd funding by Mollick E., 2013. A critical analysis of the chosen piece would also help in understanding the concepts of crowd funding in a better way.
Crowd funding has been a popular method of collecting funds. Thus, a particular venture into the requirements and components of crowd funding has been aimed at.
The particular research question that has been highlighted in this study is whether the journal, “The Dynamics of Crowd Funding” by Mollick, (2013) states the essentials of crowd funding.
The particular literature that has been chosen for the purpose of the review is dynamics of crowd funding by Mollick E. The particular article has correctly followed the flow of the research proposal that it aims to provide. The beginning of the project with a proper abstract or executive summary reflects that the quality of the flow of information in the journal has been maintained. The keywords that have been used in the journal have also been highlighted. This is another indication that the journal has been prepared to the required standards (Marom, Robb and Sad 2016). However, the purpose of the research or the research questions have not been framed which is major aspect of the research method. Research questions primarily aim at summarizing the aim of the study. These are the core questions, around which the entire research revolves. The research conducted aims to answer these framed questions. It can be noted in the journal that the author provides an overview into the purpose of the study as he mentions in the research paper that the particular paper aims to have an understanding of the nature of crowd funding and its role in the entrepreneurship research (Rao 2014). He also does frame questions regarding the research areas that the particular study explores but fails to develop a particular research question that would strengthen the base of the research (Machi and McEvoy 2016).
The executive summary of the report also provides an overview into the essentialities of the conducted study but fails to provide a structured format, which is essential for the purpose of a report. The report does not have a table of contents that would effectively provide an overview into the broad topics that the research has covered. The pages of the report are also not numbered, providence of which would have helped the user of the journal to find a particular content of the research (Machi and McEvoy 2016).
The author also uses too much repetitive data. This means that he explains the same topic using the same vocabulary, which may have presented the user of the journal with the view that the author is beating round the bush. He tries to convey that the enterprises opt for crowd funding as a viable technique of fund raising without having the fundamental knowledge of the dynamics of crowd funding. He repeats his opinion all throughout the executive summary and even the choice of vocabulary seems to repetitive.
Moreover, the author presents a borrowed view into the research but provides no referencing for that. To be more precious the author states as an example that the scholars have very little knowledge about the dynamics of successful crowd funding. This particular assertion made by the author should have been supported by proper references or sources from where the author has borrowed such an assertion. The absence of such a source further weakens the foundation of the research. He also misses on the part where the purpose of the literature review has to be stated. A literature review primarily indicates the review of a diversified range of literature that has been prepared by different authors in relation to the topic or the research question. Therefore, it is very important to mention in the study that the exact way in which, the chosen amount of literature or the journals relate to the particular topic of research (Belleflamme, Lambert and Schwienbacher 2013).
The data that has been used in the study has been claimed to have been taken from Kickstarter, the largest and dominant crowd funding site. However, the nature of the data has not been mentioned in the study (Zhao 2017). The data collected for the purpose of the research may be of two types, primary data and secondary data. Primary data refers to the type of data that has been generated by the researcher with the help of interviews conducted or questionnaires prepared. Secondary data on the other hand refers to the data that has been collected by the researcher from secondary sources. As mentioned in the journal by the author the data has been collected from the Kickstarter website. Therefore, as the data has not been generated by the author and has been derived from a secondary source that is the website, the nature of the collected data should be secondary data. The omission of such an information make the entire research questionable (Kuppuswamy and Bayus 2015).
Moreover, the hypothesis of the research report is not clear enough to understand and has been not linked to the questions that have been proposed to be discussed further into the report. The author in his report states that the primary aim of the study shifts from the formal hypothesis testing and looks into issues that are related with the entire procedure of crowd funding and the success or the failure rate of the fund raising technique. This makes the purpose of the report further confusing. A clear hypothesis along with proper linkage with the developed questions should have been the design in which the report should have been prepared. The passing from the general purpose of the research that is hypothesis testing to an informal structure weakens the foundation of the report (Kuppuswamy and Bayus 2015).
Furthermore, the data analysis that has been carried out by the author of the journal seems irrelevant and out of context. The rationale provided by the author for the elimination of certain data on the ground of non-serious effort to raise fund is not enough reason for omission. The omission of necessary data may hamper the results of the tests conducted. Therefore, it can be properly inferred that the data analysis conducted by the author has not been proper (Belleflamme, Lambert and Schwienbacher 2014).
Next, it can be observed into the study that the author has taken up firms that have raised small amounts of capital that is under $1000 in order to initiate a particular one-time project. The author making the choice of examining those projects that have lack of capital can actually affect the quality of the research conducted. This may have the similar effect as the omission of certain projects on the grounds of non-serious efforts will have on the quality of the research conducted. Moreover, the analysis of the data collected from the Kickstarter has not been properly backed up by further data that display a similar trend.
The author in his report also has not properly linked the information provided with the data tables that have been used in the study. To be more precise, the assertion of the author that the crowd funding in the United States made up less than 5% of the total investment should have been linked with the related data table (Burtch, Ghose and Wattal 2016).
The descriptive pattern that has been used by the author for the further analysis of the data should have been better presented in the form of a table. These would have made the hypothesis that is aimed to have been conducted by the researched data, clear and easy to understand (Ahlers caes et al., 2015).
Moreover, the author should have prepared his report in a structured way. This means that assertion made by the author that quality may not necessarily be an important determinant in funding when raising funds through crowd funding should have been included in the limitations part of the crowd funding (Hoegen, Steininger and Veit 2017). The author further infers that the fact that a quality of an investment not being able to influence the process of crowd funding exposes this particular procedure of financing to fraud and misuse. Inclusion of such information in the limitations of crowd funding would have made the research report, carry a more clear and contextual outlook (Ahlers 2015).
The picture of the map that has been provided in the research report should have been clear enough to understand. The author should keep in mind that the primary motive behind any research report is helping the users of the report in understanding the topic of the research. Therefore, the providence of pictures in the report should be executed in such a way that they serve the stated purpose perfectly (Moritz and Block 2016).
The tables that have been provided in the study do not come up with the expected clarity and the data that has been included in the tables have not been properly backed up with required explanation. Even the source of the data has not been properly clarified. For instance, the table numbered three in the research report does not reflect a transparent view of the research conducted. Even the flow of the data that has been aimed at does not appear to be self-explanatory (Agrawal, Catalini and Goldfarb 2014).
The author further mentions in his research report that in order to measure the influence of the geographical position in crowd funding he uses two STATA programs for generating geographic information (Zvilichovsky, Inbar and Barzilay 2015). However, the author misses out on the limitation of the STATA programs which may affect the quality of the research conducted by the author. The different coefficients used, have certain limitations, which also should be included in the limitations of the research conducted. However, the author does not include a section named limitation in the research report (Xu 2014).
Lastly, the references used in the research report are too old. The fundamental logic behind the utilization of the references is backing up the proposition that has been presented by the author with the help of analysis of the derived primary or secondary data. Thus, in case the references that have been utilized by the author date back to much older periods, the primary motive of backing up the proposed recommendations can never be achieved. The references that have been used by the author date back to the year of 1995. Thus, the particular recommendation in such a case should be that the references that are cited should be strictly from the year of 2012 (Belleflamme and Lambert 2014).
The data that has been used for the purpose of executing the task of carrying out the research for the project is in the nature of secondary data. This is because the data has been necessarily obtained from reviewing the different journals in the similar topic.
There has been no editing or making up data. Failing to report negative findings has also not been the case for this particular study. This research work has been carried out in the highest ethical standards.
Conclusion
The particular conclusion that can be achieved from the above discussions and recommendations is that the author of the report though has carried out a commendable task in analyzing and evaluating the current condition of crowd funding in the present market, his report lacks certain essential elements that affect the quality of his report as well as the research conducted. A research report should have to essentially contain a methodology as to how the research have been conducted and the nature of data use. The limitations of the chosen methodology or the report should also have been included in a separate section, which also has been omitted. Thus, the provided recommendations should be adhered to in order to improve the standard of the research report.
References
Agrawal, A., Catalini, C. and Goldfarb, A., 2014. Some simple economics of crowdfunding. Innovation Policy and the Economy, 14(1), pp.63-97.
Ahlers, G.K., Cumming, D., Günther, C. and Schweizer, D., 2015. Signaling in equity crowdfunding. Entrepreneurship Theory and Practice, 39(4), pp.955-980.
Ahlers, G.K., Cumming, D., Günther, C. and Schweizer, D., 2015. Signaling in equity crowdfunding. Entrepreneurship Theory and Practice, 39(4), pp.955-980.
Belleflamme, P. and Lambert, T., 2014. Crowdfunding: Some empirical findings and microeconomic underpinnings.
Belleflamme, P., Lambert, T. and Schwienbacher, A., 2013. Individual crowdfunding practices. Venture Capital, 15(4), pp.313-333.
Belleflamme, P., Lambert, T. and Schwienbacher, A., 2014. Crowdfunding: Tapping the right crowd. Journal of business venturing, 29(5), pp.585-609.
Burtch, G., Ghose, A. and Wattal, S., 2016. Secret admirers: An empirical examination of information hiding and contribution dynamics in online crowdfunding. Information Systems Research, 27(3), pp.478-496.
Hoegen, A., Steininger, D.M. and Veit, D., 2017. An Interdisciplinary Review of Investor Decision-Making in Crowdfunding.
Kuppuswamy, V. and Bayus, B.L., 2015. Crowdfunding creative ideas: The dynamics of project backers in Kickstarter.
Kuppuswamy, V. and Bayus, B.L., 2015. Crowdfunding creative ideas: The dynamics of project backers in Kickstarter.
Machi, L.A. and McEvoy, B.T., 2016. The literature review: Six steps to success. Corwin Press.
Marom, D., Robb, A. and Sade, O., 2016. Gender dynamics in crowdfunding (Kickstarter): Evidence on entrepreneurs, investors, deals and taste-based discrimination.
Moritz, A. and Block, J.H., 2016. Crowdfunding: A literature review and research directions. In Crowdfunding in Europe (pp. 25-53). Springer International Publishing.
Rao, H., Xu, A., Yang, X. and Fu, W.T., 2014, March. Emerging Dynamics in Crowdfunding Campaigns. In SBP (pp. 333-340).
Xu, A., Yang, X., Rao, H., Fu, W.T., Huang, S.W. and Bailey, B.P., 2014, April. Show me the money!: An analysis of project updates during crowdfunding campaigns. In Proceedings of the SIGCHI conference on human factors in computing systems (pp. 591-600). ACM.
Zhao, H., Zhang, H., Ge, Y., Liu, Q., Chen, E., Li, H. and Wu, L., 2017, August. Tracking the Dynamics in Crowdfunding. In Proceedings of the 23rd ACM SIGKDD International Conference on Knowledge Discovery and Data Mining (pp. 625-634). ACM.
Zvilichovsky, D., Inbar, Y. and Barzilay, O., 2015. Playing both sides of the market: Success and reciprocity on crowdfunding platforms
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