Social media engagement and crowdfunding performance: The moderating role of product type and entrepreneurs' characteristics

Entrepreneurs are showing an increasing focus on understanding and managing their social media strategies to optimize the success of their crowdfunding campaigns. While much of the current crowdfunding literature focuses on the roles of social media engagement in the funding performance of crowdfunded projects, in this study, drawing on social media engagement theory, we examine how product and entrepreneur characteristics moderate the influence of social media engagement on funding performance in the reward-based crowdfunding. Using a dataset of technology crowdfunded projects, we investigated whether Facebook and Twitter engagements affect funding outcomes and if so, how the two interact with each other and their influences vary by project type (hardware and software) and entrepreneur characteristics (gender, experience, and social capital). We found that both Facebook and Twitter engagements positively affect funding, but the two weaken each other's impact, particularly for hardware products. Additionally, Facebook engagements had a larger effect on funding outcomes in the early days of a campaign driven by its prelaunch efforts, whereas Twitter engagements had a larger impact in later days. Furthermore, our findings indicated that Facebook engagement is more influential for hardware products. An entrepreneur's internal social capital built inside the crowdfunding platform also weakened the effects of Facebook engagements generated outside the platform, whereas Twitter engagements on subsequent funding had less influence on experienced entrepreneurs. Our findings suggest that Facebook mainly serves as a channel to show the significant commitment of entrepreneurs to their projects and increase persuasiveness, while Twitter helps to raise awareness by broadcasting crowdfunding campaigns among potential investors.