Striking a Balance: The Effect of Capability and Character Reputation Claims on Crowdfunding Performance

Abstract

Drawing from expectancy violations theory, we examine the effect of entrepreneurs’ claims about their ventures’ capability reputation and character reputation on crowdfunding performance. We propose that capability reputation and character reputation claims benefit crowdfunding performance—but only up to a point—until crowdfunding backers begin to perceive it as over-claiming (inverted-U relationship). We also suggest the effect of entrepreneurs’ capability and character reputation claims are highly contingent upon whether the entrepreneur has launched a commercial or social campaign. Our analysis of 68,899 crowdfunding campaigns strongly supports our theoretical predictions.