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FEDERAL STATE EDUCATIONAL INSTITUTION

OF HIGHER EDUCATION

NATIONAL RESEARCH UNIVERSITY

HIGHER SCHOOL OF ECONOMICS

Saint Petersburg School of Economics and Management

Department of Management

In the field 38.03.02 `Management'

Educational programme `Management'

Crowdfunding: cross-country analysis

Livinets Marina Andreevna, Klemeshova Ekaterina Andreevna

Reviewer E. M. Rogova, Professor, Doctor of Sciences

E. A. Zazdravnykh, Senior Lecturer, PhD

Saint Petersburg 2019

Abstract

In recent years, there was a huge amount of scientific studies run, analyzing the projects on crowdfunding platforms in different countries. However, there is a lack of articles related to cross-country analysis and almost no studies on Russia these gap we are aimed to fulfill by conducting our study. The main implication of this study is mostly a practical one, containing the set of advices to raise the probability for the project to succeed on the crowdfunding platform in different countries. The major scientific implication is dedicated to covering the lack of the cross-country studies containing the data for Russian crowdfunding platform. Thereafter, in our research, we're going to fulfill the Russian crowdfunding studies gap and develop the set of measures for increasing the probability of the project success. As a result, we've got that there are differences in project categories, in which there is a higher probability of success. For example, there is a higher probability for design projects to succeed in Great Britain than in Canada, and those categories which increase the project success in USA, decrease it in Russia. Nevertheless, there is a similarity in negative relationship between the targeted sum for a project and the percentage, which the project collected in all countries. However, the threshold targeted sum is different for Russia and other countries. Thereafter, in case of Russia, it is more useful to place there small projects rather than the big ones, despite the other countries, where the threshold sum is nearly 100 times more, which means that in other countries than Russia it is possible to achieve 100% collection of the targeted fund for the larger projects than on Boomstarter. These implications would be useful for future entrepreneurs, who would like to run their startup in one of these countries.

Table of content

• Abstract
• Introduction
• 1. Theoretical foundation
• 1.1 Defining crowdfunding
• 1.2 Literature review
• 2. The statement of the research question
• 3. Methodology and data description
• 3.1 Data description
• 3.2 Methodology
• 3.3 Regression models description
• 4. Results description
• 4.1 Results discussion
• 4.2 Implications of the study and further research
• 4.3 Limitations and further research
• Conclusion
• References
• Appendices


Introduction

With development of fundraising platforms, as everything else in contemporary society it reached the moment when startups can find themselves online and don't spend much time on writing business-plans, making pitch presentation and searching for venture funds or a single investor. Now all you need is to make a professional video, describing the whole idea of your startup, convincing description with recall to invest and a profile on one of the most visited crowdfunding platforms to place your project there.

According to the Crowdfunding Center's report “State of the Crowdfunding Nation - 2017”, which is based on the largest international crowdfunding platforms data, states that only in 2016 there was 128 thousand campaigns ran with Ј796 million raised while the world-dominant crowdfunding platform attracted more than $4,3 billion dollars within the last ten years. This means that crowdfunding platforms are now extremely popular kind of funding. However, with the easiness of placing a project on the majority platforms of them also comes high competition level. Thereafter we need clearly understand the factor influencing campaign success. The requirements for startups on crowdfunding platforms are rather low, as a rule it is just an age requirement, however, there are still differences between projects that looks similar at first, e. g. the projects with close ideas and targeted sum of goal may have different funding rate. Thereafter, one of the main objectives of our research is to find out main factors for increasing the funded amount for the project.

Now we would like to indicate several largely used terms from our research paper. According to the Oxford dictionary, crowdfunding is the practice of funding a project or venture by raising many small sums of money from a large number of people, typically via the Internet. British crowdfunding center names two types of crowdfunding: reward-based and equity crowdfunding. The first one appears when entrepreneurs presell a product or service to launch a business concept or offer alternative kinds of reward depending on contributed sum without incurring debt or sacrificing equity. The second one is when the backer receives shares of a company, usually in its early stages, in exchange for the money pledged. According to The Crowdfunding Center, pitch is the promotion of the crowdfund used to garner interest from potential funders. And funder (or backer) is the person who provide funding for a person or project. Finally, pledge is a term used to describe the promise to pay the person crowdfunding the defined amount.

In our research, we decided to conduct cross-country study based on Kickstarter's data on four most presented countries on it: USA, the United Kingdom, Canada and Australia. There is a limited number of articles related to comparisons between countries as a result we aim to fulfil this gap. Also, we added data on Russian platform - Boomstarter, it was done to fulfil the research gaps in studies on Russian crowdfunding, as we found only student's theses and small student publications concerning the theme. It indicates that many things in this topic are only about to be discovered in comparison to the other platforms. There are thousands of articles devoted to Kickstarter, for instance, Kuppuswamy V., Bayus B. (2017) and Allisona et al. (2017), hundreds of studies of platforms based in developed countries, for example, Forbesa H., Schaefera D. (2017), even some studies of developing countries - Mourao P., Silveira M., Melo R. (2018), but almost nothing from Russia.

In our research, Cross-county analysis of crowdfunding, we're going to disclose whether there is a difference in factors between factors between the chosen countries, also clarify the problem of whether it's true that crowdfunding platforms are more effective in raising capital for smaller startups rather than the bigger ones and find the key drivers of success on the chosen platforms in five countries. Consequently, the research purpose is to understand whether the crowdfunding platforms are useful for huge startups fundraising or just for small projects and examine factors impacting success in five countries, make a comparison between them, based on data of more than 259'000 projects of Kickstarter and 7957 projects taken from the biggest Russian crowdfunding platform - Boomstarter.

Thereafter, our research strategy is to find a proof that using Kickstarter and Boomstarter, as a crowdfunding platform, is an effective way to find investments for a startup. In our research we had a correlational strategy, because we produced a description of the relationship between chosen variables, however, we can only make assumptions about the kind of relationships between them. We're going to measure the requested amount of money for the project and the collection rate for projects in each project category (e. g. IT, Presents, science, technology, etc.) and make a comparison between the countries. As a result, we're going to understand whether the collection rate (as our described variable) depends on the descriptors, namely project category, number of projects made by author, etc. In addition, we will analyze personal information about the authors retrieved from vk.com in different categories (e. g. sex, age, level of education, number of followers, religion, political view etc.) to find out whether there is a correlation between personal features of the author and success of the project in Russia.

The key contribution of the research is practical, more than scientific. We're going to enclose main factors for founders to increase their projects funded amount. This topic may be extremely useful for all types of founders and crowdfunding investors. They may use the results of this project as an instruction how to present their project account on crowdfunding platform more successful, or to increase the trustworthiness of their pitches. Whole investors can use the results to evaluate authors and their projects, they will know at what features they should pay attention to and what category to support in order to get a reward. Finally, as for scientific contribution, there is no research of Russian crowdfunding platforms which was studying the key success factors for the project, or at least the key features of the author which may influence his project success, so we're going to enrich the range of foreign articles with the one based on the data from the Russian crowdfunding platforms.

1. Theoretical foundation

1.1 Defining crowdfunding

Until the recent 10 years, funding capital for startups was an almost impossible task for ordinary people. The possible options to raise fund were limited by pitching, bank credit and “work for money to open your business”. By the first option ordinary people had extremely small chances to fund their projects by introducing them to investors. For example, some social projects could be easily rejected under the pretext of the absence of revenue. The second option is hard for those who is constrained by money. Moreover, banks usually have high requirements for the borrower, he or she must have a good history with a bank, obtaining certain level of experience in the sphere of their project, in many cases, the project proposal is evaluated by bank's workers, who usually reject innovations or projects with high risks. This significantly reduces the number of potential entrepreneurs. The last option is only for those who can wait and save money for several years, in this case there is a high probability that someone else will come up with the same idea. Also saving is really hard for young population, especially in a modern world with more opportunities to spend rather than to raise money.

The situation improved after the launching several small crowdfunding platforms from 2006 to 2009, this type of funding gradually gained its popularity and reputation worldwide. Then, Kickstarter started to operate on 28th of April in 2009 that is now the dominant crowdfunding platform in the world with more than 4,3 billion dollars raised for more than 440,000 projects. Thanks to the platform, the movement of crowdfunding started to gain momentum. As a result, nearly 7 years ago, a new way of raising capital was legalized. It was initiated by President Barack Obama by signing the Jumpstart Our Business Startups (JOBS) Act into law. It happened in April 2012 and announced legalization of equity crowdfunding (for that moment funding projects online was not mainly made by a single platform, but by the initiative groups of people with own website for a single project). The era of crowdfunding platforms itself started later in 2012, by running Fundable - the first business crowdfunding platform. It was made to help people fund their projects by means of equity and reward-based crowdfunding.

As we already understood, crowdfunding - is a way of funding projects, or startups. In his book “The Crowdfunding Handbook: Raise Money for Your Small Business or Start-Up with Equity Funding Portals”, Cliff Ennico defines crowdfunding as “raising money for something from a group of people that is large and relatively undefined: the crowd”. And this definition is short enough and understandable. The way to raise money from a group of people came to us from early rock-bands, who raised money for their musical records or round trips by getting donations from their fans. This was an early form of reward-based crowdfunding: when people give money for favorite music band, they may listen to them live in their city. crowdfunding managerial sponsor

There are two main types of crowdfunding. One of them was briefly described in the previous paragraph. The first one is project crowdfunding, or gift crowdfunding, or, as it publicly named, reward-based crowdfunding. As it was stated by Cliff Ennico, “in project crowdfunding, an individual or company solicits money from the crowd for a project of some kind and gives investors something tangible or intangible in return but not securities in a company”. The second type is social media or equity crowdfunding. It is defined by Cliff Ennico as the one, which “allows entrepreneurs and start-up companies to sell securities in their companies using crowdfunding techniques, even if investors who participate in the offering are not accredited investors”.

In our research we use data from the crowdfunding platform Boomstarter and Kickstarter. Unfortunately, Boomstarter does not diversify projects by type of funding, whereas Kickstarted does it. However, the dataset of Kickstarter published in the free access on Kaggle does not include this information about the projects. Thereafter, we didn't choose to check the differences between equity and reward-based types in raising capital as our study objective. However, we decided to research the main factors, influencing the successfulness of raising capital for the projects on crowdfunding platforms. Earlier, there was several similar researches, based on international platforms data, further we will briefly describe them.

If we consider Boomstarter platform in detail, it is a simple and easy-to-use website, where everyone, with no discrimination to age, personal characteristics and education, may place his or her project or startup and raise capital for it with a help of people spread around the globe, even those who doesn't know you personally but see a potential in what one does. When placing the project, one may place different kinds of media materials, like video, photo, or just a simple brief description of the project for potential investor to understand the content and prospects of the project. The author can choose between two types funding. The first option is when a creator chooses the end of collection date for the project, till that time investors are welcome to support him or her, after it is closed no matter if it reached the required sum or not. The second option implies that there is no deadline for funding, a project is finished only when the author decides, or when it collects 100% or more. Some studies on crowdfunding show that a project with a strict deadline are more successful rather than without it as investors feel that the offer will disappear soon and they will never receive a prize (a unique product of crowdfunding) for their contributions. When the project collection date comes, if the project reached its targeted sum, or collected more, the author may withdraw money to his bank account, by subtracting 3,5% from it as a commission. However, if the project didn't reach the targeted sum in a set period, the author also may withdraw the collected money without commission by initiator's contribution, which doesn't mean that author should invest in his project the rest sum, but that he can get the collected amount without commission of Boomstarter.

Now, we're moving to reviewing the literature on the topic and description of the recent studies.

1.2 Literature review

For our research we have studied a broad scope of articles related to crowdfunding due to the fact that our work has several objectives and combine cross-country research and regional one. As a result, we attempted to find as much as possible papers with cross-country and single country analyzes. Moreover, we searched for articles containing personal author's information and its influence on success rate in order to check the difference between Russia and the other countries. It was done as there is articles on crowdfunding on Russia with the use of data from social networks such as vk.com or Facebook.

As for the previous studies about our research questions, we can name at least two main directions of recent studies, we reviewed. The first one is dedicated to panel data studies of crowdfunding platform. The main purpose of such researches is to understand the speed of projects funding depending on certain circumstances (e. g. founder's gender, race, education, number of investors, amount of information about the project, etc.). However, despite these researches may have the greatest opportunity to uncover all the possible factors for funding speed change, they lose due to the small period of data they have. The reason of such a limitation as the possibility to get information from crowdfunding platforms. Despite it can be scrapped legally, it still requires huge computer work speed and lots of time and place only to get information for a certain day. If we want to get information for at least a year, we need to scrap weekly, daily or at least monthly to receive required amount of information about the project funding. Here we face a limitation of resources (e. g. servers to store data) and time (scrapping is a time-consuming process). That is why we rejected this type of research in our case, the collection of 7967 projects took one week consequently each update would take approximately the same amount of time, to say nothing about more than 440,000 projects from Kickstarter. That's why such researches are rare and only a small number of them may operate the data for more than five years. However, a positive side of a question is that the majority of projects, performed on crowdfunding platforms are funded in two years on average, which means that even two years of study is enough to find some interconnections between factors.

The brightest example of longitudinal research was made by (Kuppuswamy & Bays, 2017). The authors operated a panel data about 10 000 Kickstarter projects, out of 28 639 projects gathered. As a result of research, the authors stated that the contribution to a project increases when the goal is almost achieved, in some studies it is called “green bar effect”, as investors feel much more confidence that a given project will not fail. Also, as they found out, the contribution may be boosted by adding stories of those who already contributed to a project, or add a reward for contribution, or even making a motivating video. Also, despite as for a small project when the funding deadline is near and early support was limited, the contribution rises, the huge projects have a controversial situation. They also found out that the vast majority (> 90%) of projects, which were funded for at least 30% of the goal at some point, eventually reach their funding goal. However, the authors stated that in this research they studied only on question: whether the contribution is made and which factors influencing it, despite which such amount of data much other studies could be made. For further research they propose to study whether there are more moderators for goal gradient effect, which was reviewed by them. As for the previous studies about our research questions, we can name at least two main directions of recent studies, we reviewed. The first one is dedicated to panel data studies of crowdfunding platform. The main purpose of such researches is to understand the speed of projects funding depending on certain circumstances (e. g. founder's gender, race, education, number of investors, amount of information about the project, etc.). However, despite these researches may have the greatest opportunity to uncover all the possible factors for funding speed change, they lose due to the small period of data they have. The reason of such a limitation as the possibility to get information from crowdfunding platforms. Despite it can be scrapped legally, it still requires huge computer work speed and lots of time and place only to get information for a certain day. If we want to get information for at least a year, we need to scrap weekly, daily or at least monthly to receive required amount of information about the project funding. Here we face a limitation of resources (e. g. servers to store data) and time (scrapping is a time-consuming process). That's why such researches are rare and only a small number of them may operate the data for more than five years. However, a positive side of a question is that the majority of projects, performed on crowdfunding platforms are funded in two years on average, which means that even two years of study is enough to find some interconnections between factors.

Another direction of contemporary studies is cross-sectional data researches, aimed at finding out certain characteristics of the project founder or the project itself, which may contribute to the funding amount and percentage of the goal reached. One of the brightest examples of such a study was written by (Geiger & Oranburg, 2018).

The article was aimed at finding out if there is a significant difference in funding projects launched by female and male entrepreneurs. As a result of reviewing of 243 campaigns, the authors found that female founders receive significantly less (nearly 50% less) funding from their equity crowdfunding campaigns, while the funding targets and projects' characteristics are pretty much same for female and male entrepreneurs. The authors also found out that both females and males operate in certain project categories (e. g. for females they are Clothing, Fashion, Cosmetics, etc.). As an example of possible further research, the authors proposed to study whether there are differences in gender of contributors to both female and male equity crowdfunding projects. For example, in (Greenberg & Mollick, 2017) found out that women are prone to support women rather than men when making decisions (Geiger & Oranburg, 2017) also pointed out that it is quite important to study whether crowdfunding and other venture finance laws create or maintain any structural bias against the ways that women raise venture capital. One more study devoted to gender in crowdfunding made by (Horvґat & Papamarkou, 2017) based on data from the leading UK crowdfunding platform, they explored the distinction in activity of creator and supporters between genders. In contrast to (Geiger & Oranburg, 2018) and (Anglin, 2018), females are statistically receiving slightly higher percentage than males, nonetheless, after running logistic regression, gender was not affirmed to be significant predictor. However, the interpretation of the finding is rather complicated, the authors attempted to explain it by the fact that woman are riskier than man. Exploring the gender's patterns in investing, they concluded that the higher percentage of females invest in project the bigger probability of project to failure, as according to the study, the gender in investing is negative predictor. Also, categorical varies significantly between genders, for instance, female support “Food”, “Health”, and “Consumer goods” whereas males prefer “E-commerce”, “Finance”, and “IT”. Another study related to gender in crowdfunding written by (Johnson, Stevenson & Letwin, 2018), they studied the dominant stereotypes about woman, for instance, that females are perceived to have lover competence in business then males, and that they are considered to be more trustworthy. After running logistic regressions and Poisson model, they figured out that female's collection rate significantly more than males. One of the stereotypes of females to be less competent was not supported whereas hypothesis oh higher trustworthiness was confirmed.

The other article was written by (Allison, Davis & Webb 2017), the authors attempted to create a model that will increase likelihood of achieving project's goal be examining factors that have persuasive effect on potential funders. To do it, they downloaded all project pages daily appending new ones for three months. As a result, they had dataset containing 383 projects related to different industries varying from $40 to $500,000. They tested more than nine hypotheses on 383 projects from Kickstarter that is rather small number of projects compared to the other works in the field, however, they studied in detail in detail each project and included unique factors which were never used before. The outcome of the study support H3 because it states that author's education is positively correlated to project's success as well as relevant function experience. The author conducted textual analysis to identify what tone and motivation in a project description will increase trust and sum of money collected. Surprisingly, positive tone in description has no impact on investors. Also, authors with low experience more likely to call a project as a dream and use positive tone that also do not influence on investors. In addition, a combination of a unique branding with a portraying a project as a personal dream have positive relationship with amount of money raised. (Agrawal, 2018) and the Staff of Entrepreneur Media, Inc. (2017) are also proved that presenting a project as something personal or just sharing your story are significant to success. As it was aforementioned, education is positively linked to success, it was also proved by (Sauermann, 2019), as part of researches based on small local platforms, they explored scientific crowdfunding using Experiment.com. The platform is specialized on science which in turn implies high level of education, the majority of the projects are made by people who are related to educational institutions (about 82%). In this case, the level of education influence success rate associate professors (the highest education category) tend to collect more.

Some researchers are exploring creator's motivation to understand which one is the most appealing for investors and what treats are important for each type of author. (Ryua &Young-Gul , 2018) conducted cluster analysis and separated creators into four categories of motivation: social entrepreneurship (low money need and high desire to contribute to society), daring dreamer (high motivation, aims to built relationship with investors, low trustworthiness), fund seeker (low motivation, high money need), indie producer (orientation relationship building, high motivation). They identified meaningful distinction between clusters, that confirms that motivation does make impact. Then using ANOVA, they checked what demographic features effects each type of author. As they figured out, gender makes no difference on motivation and success, whereas there is significant distinction at age and category between author's type. Afterwards, they tested how motivation influence success rate, as a result, there is not significant difference on collection rate, but it still it makes impact of certain factors: fund seeker receives higher average contribution while social entrepreneurs attract bigger number of backers.

Now moving on to the next type of research, it was written by (Cho & Kim, 2017), in the study the authors aimed to fulfil the research gap in cross-cultural comparative researches by studying US and South Korea to understand the difference in pattern of a successful project. The choice of countries is justified by the fact that US is probably the most advanced country in terms of crowdfunding and has over 40 platforms for this type of raising equity whereas South Korea has enormous potential for it as revenue from crowdfunding in the country doubles almost each year. The authors applied Hofstede's (1980) cultural dimensions: individualism/collectivism, power distance, and uncertainty avoidance. The dataset consists of projects in only one category `art and culture' of the most mainstream platform of each county: Kickstarter - US and Tumblbug from Korea. In the study, they paid a lot of attention to communications between two sides: investor and author. After conducting two sets of multiple regression, they found out that in US, continuous communication between creator of a project and his/her supporters is a factor of a success whereas in South Korea this factor is insignificant. In South Korea, huge number of comments have negative impact as it is usually associated with complains and arguments while, according to study made by (Bi, 2017) conducted in US proved that in this country high number of reviews, comments, `likes' have positive effect of funding. Surprisingly, in both countries, too specified information about how money is used has negative effect on project, people are not interested in reading long descriptions on what an author is going to spend money. This study was especially interesting for us because it proves our H0, as factors influencing collection rate are different from country to country.

Another example of cross-country studies was written by Johnson et al (2018), they investigated the difference between regions such as the USA, Europe, Asia, Africa, Latin America using a dataset retrieved from Kickstarter. However, in comparison to aforementioned research made by (Cho & Kim, 2017), the authors did not studied countries separately based on chosen criteria but included all regions in logistic regressions and Poisson models. As a result, they identified that all regions significant, they had positive as well as negative coefficients: Europe (success rate b = 0,27, p < .001), Asia (b = - 1,14, p <.05), North America (b = - 0,48, p<.05) etc. In our case, we are going to run separate regressions for each country in order to identify factors impacting success for each country.

Another approach to study crowdfunding were chosen by (Forbesa & Schaefera, 2017), the research is devoted to how a project for crowdfunding should be designed to have a success exactly in crowdfunding platforms and how campaign of a product should be conducted based on data from rather small and famous UK platforms. It combines qualitative and quantitative methods applying them to both creators and supporters. The purpose is to create practical step by step guidance for successful campaign because the handbook for creators written by the dominant platform Kickstarter does not provide enthusiasts with a decent guideline.

The conclusion made based on conducted interviews supports our H1. This happens because people tend to support projects with a higher percentage funded rather than with higher amount funded, this actually proves our first hypothesis. In some studies, it is called “green bar effect” as Kickstarter present graphically the progress of a project, the speed of funding raises when a project reaches high percentage. Also, they found out that reward system that is based on tangible goods (give supporters the outcome of the project) is more desirable than “gimmicky" products (stickers, t-shirts etc.). To almost the same conclusion but slightly in broader context came (Choi, 2015) who proved that having variety of rewards, the use of limited-edition prizes and intangible rewards have positive impact on funding, for instance, some projects offer more than 20 types of reward for different sums of contribution.

In addition, the interviewees noted high importance of high-quality media content on project's page, it concerns video content (author should attract attention right from the start of the video, it should not last for more than three minutes), give description of a product and a brief plan how money are going to be used without overwhelming it with details. Finally, if a creator wants to achieve success, more or less famous platform with credible reputation must be chosen, as bigger platforms are more preferable than smaller ones.

(Koch, 2016) conducted a study that include not only project's characteristics and types of media content placed, but also an author's features that is related to out H3. The researcher included creators' appearance (the way he or she behaves in a video etc.) and experience (in crowdfunding sphere, including number of successful and failed projects) in order to check whether sympathy influence collection rate supposing that personal information increases credibility of a project and builds a relationship between supporters and project's owner. Both aforementioned variables are significant to funding rate, the higher number of failed companies author created the less collection rate will be and vice versa. The same type of relationship is with author's appearance he or she can create positive or negative impression. (Anglin, 2018) in their work paid even more attention to author's features. They included variables such as ethnicity, sex, education, website, entrepreneurial experience, positive psychological capital etc. The results contradict (Allison, Davis & Webb 2017), as education level is not significant, contradicts (Koch, 2016) and verifies (Horv & Papamarkou, 2017) as experience in crowdfunding is insignificant. Nonetheless, it proves that gender does matter in collection rate, females receive 36% less funding in comparison to males (Geiger & Oranburg, 2018) stated that female get 50% less). Also, the study shows that ethnicity is significant (they chosen Caucasian as - 1, otherwise - 0). In addition, the study proves importance of having a website with higher significance than the number of followers on Facebook, the same was confirmed by (Johnson, Stevenson & Letwin, 2018). In our research we do have the same variables and will check their influence in case of Russian crowdfunding.

Another important branch of literature concentrates on how crowdfunding is used in a single industry, for instance, on restaurants by (Larrea, Altin & Singh, 2019). The authors have chosen industry which is not often associated with this type of equity rising, even the dominant site of crowdfunding Kickstarter has only 1567 projects in the category, moreover, the success rate is slightly more than 30% in comparison with mean 43% plus. They tested four types of hypotheses: the first relates to the category of content used to describe a project, the second aimed to figure out whether community orientation helps to succeed. The third one checks how different communication styles influence success, the last one discloses relationship between type of rewards and the final result. The study discovered that the usage of images serves as the most powerful tool because it has even more positive effect on funders than video, that actually challenges some previous studies described, for instance, made by (Forbesa & Schaefera, 2017). Whereas number of words is not significant as it is not perceived as an indicator of high quality of description, this confirms results of (Cho & Kim, 2017) as people are not interested in reading long texts. (Beier & Wagner, 2015), came to adverse results, they discovered that the number of photos placed to describe a project has no influence whereas video significantly impacts success rate.

Another study concentrating on one industry made by (Cordova, 2015). They collected data from four platforms related to technology projects and checked what the determinants of being fully funded and overfunded. They decided to use several platforms to check the difference in factors influencing the success rate between the USA and Europe. However, in both cases the regions in a given industry are insignificant, but the goal (ln requested sum of money) is significant that confirms our first hypothesis and contradicts our H0, which postulate that factors influencing success varies from country to country.

Next, (Larrea, Altin & Singh, 2019) proved that community orientation in project's description increases success, moreover, in this case, people from the same community as the author more contribute more actively. Concerning the communication frequency, number of comments and updates, they proved that these factors are directly related to success rate as well as did (Beier & Wagner, 2015) and (Borst, 2017). However, they did not support the last hypothesis, there is no significant difference between kind of reward and the result of equity rising.

(Lagazio & Querci, 2018) in their work explored what influences on success and of a nation (only Italian creators) in global crowdfunding platform - Indiegogo and what impacts on crowd funder's decision whether to invest or not. By addressing to a multi-theory approach, they attempt to give explanation of multi-faced nature of achieving the goal on crowdfunding platforms. By building four binary probit regression models the author tried to verify ten hypotheses.

The research is linked to our H1 and H2 hypotheses. In case of H2, it checks if social impact projects have higher success rate as many people consider crowdfunding as a form of altruism or charity, or just support these projects to have positive feelings (warm-glow theory). However, they found out that this lowers project chances to be funded on 13%. However, another study by Hsieh et. al. (2018) has adverse results; the paper is focused on public projects' performance in Asia using dataset of 2043 projects retrieved from Taiwan's crowdfunding platform flyingV. The category contains social-oriented, political, environmental, non-profitable, non-commercial etc. it accounts for 23,8% of all platform and has 50,2% success rate, moreover, the chance of success is 7.6% higher compared to the other categories. One more study that prove category's importance (Beier & Wagner, 2015), their results show that food, music, comics have higher possibility to be funded. Also, the same hypothesis was tested (Mourao, Silveira, & Melo, 2019) in Brazil and they discovered positive relationship as well. Also, the Italian results support H1, as asking to a sum from USD 10,000 to USD 20,000 reduces the probability of achieving goal (raise 100% or more) on 11% in comparison with projects lower than USD 10,000.

Apart from aforementioned, they discovered that a project described in English language has 9% more probability to become successful rather than one described in Italian. Finally, they stated that fixed campaigns (with a deadline) have higher likelihood to reach target than flexible ones.

Some studies are aimed to encompass a variety aspect of the phenomenon, for example, the study made by (Mollick, 2014) attempts to uncover as much as possible fields of crowdfunding, starting from factors influencing project goal to the impact of the use of crowdfunding on entrepreneurship. To achieve it, 48,526 projects based in the USA from Kickstarter from the beginning of 2009 to July of 2012 were analyzed.

The paper supports our H1, as it proves than realistic goals are more attractive for funders. They found negative dependence between increasing required capital and success.

The study supports our H3 due to the fact that they found out positive relationship with social network endorsement, large number of friends in Facebook and size of raised capital. An author' chance of success with over 1000 friends is higher on 40% in comparison to one with less than 10 friends. Moreover, (Kaur & Gera, 2017) in their work shows that high activity in Twitter is positively correlated to raising capital. However, using aforementioned social platforms is not a universal approach, as (Beier & Wagner, 2015) discovered while studying Swiss dominant crowdfunding platform. They separated into two categories: off-page communications (not on platform's page) and on-page (all media content placed on project's page such as description, photos, videos). As a result, they concluded that off-page interactions between authors and supporters (Twitter and Facebook) have no influence on collection rate while on-page do make influence.

In addition to all aforementioned, the study points the significance of media content as 86% of funded projects varying from 5,000$ to 100,000$ had videos about the product, it serves as an indicator of high-quality of the product and shows author's serious intentions to what he or she created. The same was proved by (Beier & Wagner, 2015). However, the study made by (Choi, 2015) has a slightly different results, the author concluded that videos and music has no effect on success whereas slogan positively impacts on funding.

Another brunch of studies concentrates on geographical distribution of crowdfunding, for instance, studying the USA by creating a map (Mollick, 2014) discovered the relation between geographical location and category of a project, for instance, Nashville - art and music (the state is famous for country music and its musicians) while San-Francisco - IT projects (that can be explained by the Silicon Valley). Another research based on data from Kickstarter by (Massimo, 2019) studies how “green” projects are spread worldwide taking in account countries' features (sustainability, ecological policy etc.). One of the greatest examples in the direction was created by (Agrawal, 2011). The study is devoted to how the phenomenon of crowdfunding illuminates one of the market frictions - distance. According to the statistics, the average distance between a supporter and a creator is about 5,000 kilometers. Until the launch of the crowdfunding platform, there was a direct relationship between two counterparts of investment, the more distant a donor is the less likely he or she is going to invest in a project. The researches collected data from 2006 to 2009 on art (music) category from Sellaband crowdfunding platform, choosing only projects that were successful and accelerated 50,000$ to identify distinct patterns of investing between local and distant donor. As a result, they indicated that locals have a higher likelihood to invest at early stages (as rule local funders are relatives, friend etc.) of a project whereas distant ones join projects at later stages, however, they fund the biggest part of a project.

As it was already mentioned, there is a limitation of studies on Russian crowdfunding platforms. One of them is master thesis written by (Petrova, 2018), who studied the leading Russian platform - Boomstarter. The research was based on data only from Boomstarter's pages without demographic features of an author. As a result, the main drivers of success on Russian platforms were number of comments and reposts, number of projects realized on the site. The other work on the same platform was created by (Kiprin, Goruachev & Krainicova (2018), our colleagues from National Research University Saint-Petersburg, who found that relevant crowdfunding experience and activity in social networks are driving force of success. One more Russian study was made site called Kroogi by (Ilenkov & Kapustina, 2018), the platform is specialized on rather small art projects. The other studies made by students related to Russian crowdfunding we decided not to include due to the fact that the majority of studies did not have a decent research, the author limited their works by making summary statistics and writing its description, nothing deeper was done.

Some literature is devoted to the reasons why this exact type of funding was chosen, for instance, (Walthoff-Borma, Schwienbacherb & Vanackera, 2018). The study is focused on the reasons behind the decision to raise capital exactly on crowdfunding platforms instead of using the other options. They tested hypotheses on a dataset of 277 companies that aimed to get capital on Crowdcube (the leading UK platform) from 2012 to 2015 -- and two matched samples of firms similar in the main characteristics of a projects such as a type of industry, time since the launch of a project, size etc. The first sample consisted of firms that not required external financing while the second one with raised debt. The authors wanted to find out whether firms that can gain capital internally will still use crowdfunding or rather use its own resources and vice versa. Also, they tested a hypothesis whether firms with more intangible resources uses crowdfunding rather than with more tangible. As a result of conducted a series of regression, they discovered that projects with high debts have higher tendency to use crowdfunding in comparison with low debt or with absence of debt. However, they failed to support the third hypothesis, according to the study, the type of resources has no influence on type of funding.

To sum up, crowdfunding raises its importance and recognition worldwide, the number of articles devoted to this phenomenon is increasing every day. The authors aim to understand everything concerning the topic from why this type of raising capital is chosen to what factors of author's motivation while creating a project. For our literature review, we selected the brightest articles in the sphere, attempted to make a comparison between them based on the most important criteria, and make an effort to relate them to our four hypothesizes, as a result we have certain expectation about results of Boomstarter analysis. However, all articles are made my foreign authors (with an exception for three examples made by Russian students) and based on data of countries wherein crowdfunding is more developed than in Russia, consequently there can be difference due to cross-cultural aspects, which we are about to discover.

Table 1 Summary of variables and studies

2. The statement of the research question

Our research may be divided into 2 main parts: the first one is cross-country one, based on the data retrieved from Kickstarter and Boomstarter, and the second one, which is mainly dedicated to the study of the influence of the founder and the project characteristics on the overall project success. After studying the huge amount of literature, we decided to formulate next research question: what the key drivers of success on the chosen platforms in five countries are and whether there is a difference in them between chosen countries. We also decided to put the secondary research question in order to clarify the problem of whether it's true that crowdfunding platforms are more effective in raising capital for smaller startups rather than the bigger ones. In order to answer these questions, we've put the next hypotheses to test:

H0: There is a difference in factors influencing collection rate from country to country

H1: Crowdfunding is more useful in case of small projects rather than big ones

H2: Project category influences collection rate

H3: Founder's personal traits makes impact on successfulness of a project

The first three hypothesis we're going to test on both Kickstarter and Boomstarter data. However, the last hypothesis we'll be able to test only on Boomstarter data, due to the fact that the founder's data for Kickstarter is unaailable. Next, we're going to describe our dataset and methodology, which we'll follow in our research.

3. Methodology and data description

3.1 Data description

To conduct our research, we decided to collect data from one of the top Russian crowdfunding platforms. First of all, Russian crowdfunding platforms are the ones, which were almost not researched, with an exception for several students' articles. Moreover, the major part of mainstream crowdfunding platforms is based in developed countries, and there are still small number of qualitative researches on crowdfunding in developing countries, which Russia is a great example of. Thereafter, by conducting this research paper, we are going to fulfill these two gaps: to make a research on one of Russian crowdfunding platforms and the crowdfunding platforms, located in developing countries.