SIM Crowd: Improving the chances of crowdfunded projects through public endorsements

Crowdfunding is increasingly used to finance innovation projects, especially those with a social component. Sim Crowd, led by the Austrian research promotion agency (FFG), focuses on introducing crowdfunding campaigns for social innovation projects.

Securing sufficient numbers of crowdfunders is often a challenge. Little is known about how best to motivate members of the public to invest in early ventures. In particular, it is unknown whether making potential crowdfunders aware that a venture is being supported by public funds would encourage them to invest themselves.

The SIM Crowd experiment tested whether ventures could attract greater funding by (a) informing potential funders that the project had already received support from public funds (i.e. seed funding), or (b) informing potential funders that public funds would be used to top up the funding available, if the crowdfunding target is reached (i.e. matched funding).