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Introduction
Crowdfunding allows entrepreneurs to draw funds from a large number of individuals (i.e. the crowd) through the internet (Mollick, 2014). Crowdfunding has grown into a multibillion industry; as of February 2020, Kickstarter alone had raised more than $4.76bn in pledges for more than 176,000 successful funded projects (Kickstarter, 2020). Crowdfunding can be an effective alternative fundraising vehicle especially to independent restauranteurs, as they tend to encounter fundraising limitations through more traditional means of finance due to its small-size and high risk (Lelo de Larrea et al., 2019). In Kickstarter’s food category, more than 29,500 projects had, as of February 2020, been launched, accounting for a value of more than $159.7m. With a success rate of 25.22%, over 7,000 of these have been successfully funded, a value of $135.14m (Kickstarter, 2020).
Despite the good fit, challenges are involved with both entrepreneurs and crowdfunders. To entrepreneurs, effective communication of the project is particularly a challenge as their only chance to pitch their project to potential crowdfunders is through the internet. Crowdfunding entrepreneurs, unlike their conventional counterparts, typically have limited opportunity to meet with their potential investors. The only source of communication with potential funders is often through information posted on the crowdfunding platform. Furthermore, while restaurant entrepreneurs creating projects on crowdfunding sites are restaurant experts, they are not necessarily professional marketers. Restaurant entrepreneurs can, in other words, face significant challenges. Adding complexity to the scene is the fact that crowdfunders are small investors. As the size of their expected remuneration is small, they do not normally conduct extensive research or have capabilities to evaluate business projects (Freear et al., 1994). Therefore, it is critical for entrepreneurs to possess effective ways to communicate with crowdfunders.
Scant research has been conducted in restaurant crowdfunding. The crowdfunding literature has focused on projects other than restaurants such as ones involving technology, design and film. As tourism crowdfunding is getting more attention from the researchers, topics about generic tourism-related projects have been discussed recently. Kim et al. (2020) examined the relationships between motivations and crowdfunding participation, mediated by perceived trust in the crowdfunding platform and in the fundraiser. Kim and Petrick (2020) examined the effect of herding behaviors on communication process in the context of tourism crowdfunding. However,...