Falling from Grace: Understanding Successful Crowdfunding Experiences in Serial Entrepreneurship

Crowdfunding has become an important fundraising method for entrepreneurs. In this study, we examine the role of successful crowdfunding experiences in serial entrepreneurship. Although serial entrepreneurs are typically more mature and achieve higher success rates, it remains unclear how their success affects their subsequent crowdfunding performance, given the extant literature’s mixed views of crowdfunding experiences. To resolve this tension regarding the effects of crowdfunding success, we integrate insights from the crowdfunding literature with organizational learning theory to propose a research framework with competing hypotheses. On the one hand, the crowdfunding literature suggests a positive effect arising from the signaling of legitimacy and credibility from entrepreneurs’ prior success. On the other hand, organizational learning theory suggests the potential of a superstitious learning effect wherein entrepreneurs erroneously associate success with specific actions that may not contribute to success, thereby resulting in reduced subsequent performance. We further identify several moderators related to both theoretical perspectives. Empirical analysis of 10,795 crowdfunding campaigns from 3,978 serial entrepreneurs on Kickstarter suggests that successful experiences, on average, have a detrimental effect on the performance of subsequent campaigns. The results also suggest that experience relatedness, backing experience, and prior blockbuster success can mitigate this negative effect, whereas goal overshooting accentuates it. Supplementary analysis provides insights into the mechanisms at play, specifically, how the positive and negative aspects of success manifest. This study provides theoretical implications for the crowdfunding literature by addressing the tension inherent to crowdfunding success and offers guidance for crowdfunding entrepreneurs and platform operators.