Factors That Determine Success Of Crowdfunding Initiatives In Kenya
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Crowdfunding has been observed to a phenomenon that disrupts conventional financing. However, the success rate of crowdfunding initiatives has been low. Understanding factors that influence success of crowdfunding is important given the growing role and popularity of crowdfunding as an alternative source of financing. This would provide an insight on how entrepreneurs can develop crowdfunding initiatives that are successful. Thus, the study sought to establish factors that determine success of crowdfunding initiatives in Kenya. The specific objectives were; to establish impact of crowdfunding platform on crowdfunding initiatives success, to find the impact of social networks on crowdfunding initiatives success and to find out influence of project quality on crowdfunding initiatives success. The study literatures captured several theories that supports crowdfunding namely social capital theory, game theory and signaling theory. The study adopted qualitative research approach evaluating projects raised in M-changa platform. The study involved a census population of 45 businesses listed in M-Changa platform. The study used questionnaire for data collection and they were analyzed using spss. The study achieved a response level of 91.1%. The results showed that crowdfunding platform was positively associated with crowdfunding success with r = 0.714, social networks was directly associated with crowdfunding success with a correlation of r =0.565 and strong association between quality of the projects and crowdfunding success with r = 0.683. The study recommendations emphasized on the need for founders to make sure that they study the crowdfunding platform well before deciding where to pitch their project. There is need for project founders to use numerous social networking platforms to advertise their projects and to attract friends and other social conducts to back the project. There is also need to have clear and quality videos and adverts so as to enhance the appeal of the projects pitched. Regarding project quality, there is need for project founders to do good research before formulating their projects. They should come up with quality business plans that are easy to pitch to investors.