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      TMI : Signaling Credible Claims in Crowdfunding Campaign Narratives

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          Abstract

          One of the enduring insights about early-stage creative efforts is that their prospects for success depend on their ability to overcome a variety of liabilities of newness. In our study, we address one aspect of such liabilities: the ability to communicate credible claims about the merits of an idea when raising the funds required for execution. The narratives employed during fundraising are both a vehicle for assembling details about nascent ideas and a structure for communicating them to a wider audience. With this communication, entrepreneurs signal information that potential backers use to evaluate the claims. We argue that using language to differentiate new creative projects from the status quo is beneficial because of signal clarity, but employing a language of accountability that discloses too much information (TMI) may actually backfire when raising funds in open settings. We test this argument by analyzing a sample of crowdfunding campaign texts and find evidence supportive of our predictions. These results advance the literature on entrepreneurial narratives and signaling, establish some baseline characteristics of donation- and reward-based crowdfunding sites, and reinvigorate the application of Stinchcombe’s arguments about the liabilities of newness within a contemporary context.

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          Job Market Signaling

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            Absorptive Capacity: A New Perspective on Learning and Innovation

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              Culture and Cognition

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                Author and article information

                Journal
                Group & Organization Management
                Group & Organization Management
                SAGE Publications
                1059-6011
                1552-3993
                December 2016
                July 26 2016
                December 2016
                : 41
                : 6
                : 717-750
                Affiliations
                [1 ]Babson College, Babson Park, MA, USA
                [2 ]IREGE, Université Savoie Mont Blanc, Annecy, France
                [3 ]Grenoble Ecole de Management, Grenoble, France
                Article
                10.1177/1059601116651181
                1962bad3-7906-4eac-8bfc-4a47db16d6ef
                © 2016

                http://journals.sagepub.com/page/policies/text-and-data-mining-license


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