Is Crowdfunding an Adequate Form of Financing for Opportunity- or Necessity-Based Enterprises?

Abstract

Theoretical background: This article addresses issues related to the possibilities of using crowdfunding by newly-founded enterprises in Poland. Previous research results have shown that even small amounts obtained at a vital moment may be of key importance for an enterprise’s development. Crowdfunding is a form of financing where decisions on providing the funds are made voluntarily, predominantly by individuals, and there are no traditional intermediaries engaged in the funding process or the project evaluation. Therefore, what matters in fundraising is the business concept itself, which the enterprise wants to implement.

Purpose of the article: The main objective of this article is to find out whether crowdfunding is an adequate form of funding for opportunity- or necessity-based enterprises newly founded in Poland. Hence, this article starts with distinguishing between opportunity-based enterprises and necessity-based enterprises, using different criteria. Furthermore, an attempt is made to modify the criteria for classification of newly-founded business entities as opportunity- and necessity-based enterprises, to reflect the specific conditions prevailing in Poland.

Research methods: The research study involved a representative sample of newly-founded enterprises based in the West Pomerania Voivodeship in Poland. Based on public statistical records, a group of newly-founded entities was identified, a research sample was selected, and a survey was carried out using a questionnaire as a tool. The CATI method was used in the research, which made it possible to reach entrepreneurs rather than random employees to answer the questions. In the survey the main characteristic were studied like: the financing structure and innovativeness of the newly-founded enterprises, but also the knowledge about crowdfunding and the assessment of this form of financing.

Main findings: The completed research study has shown that although crowdfunding is seen as an adequate form of funding for newly-founded enterprises, especially opportunity-based ones, the potential for using this form of funding by the surveyed enterprises in Poland is still low, which may result from the enterprises’ low awareness of possibilities offered by crowdfunding, as well as low innovativeness.