Understanding the Effects of Crowdfunding on Entrepreneurial Self-Efficacy

Abstract

Crowdfunding is emerging as a new socio-technical system that is changing how entrepreneurs interact with their community of financial supporters. While computer supported cooperative work (CSCW) researchers have begun to explore how this new type of system influences entrepreneurial work, less is understood about how the system influences their psychological experience - specifically self-efficacy, or belief in one's own ability to succeed at a task, which affects persistence, learning, and performance. Drawing on Bandura's Social Cognitive Theory, we conducted a qualitative study of 53 entrepreneurs using crowdfunding and found that crowdfunding can influence self-efficacy through (1) social validation, (2) role modeling, (3) mastery, and (4) physiological states supported by socio-technical features, such as displaying a concrete goal, examples of other's work, or public feedback. Results suggest how socio-technical systems can be designed to help entrepreneurs perform to enhance our economic and social prosperity.