Factors of Long-Term Sustainability of Crowdfunding Projects: Micro-Economic Analysis and Practical Recommendations

The article studies crowd-funding, which in conditions of digital transformation of economy becomes more and more important and popular as an alternative mechanism of financing small business. The research focuses on elimination of gaps in analyzing micro-economic factors of long-term sustainability of commercial crowd-funding projects in today’s academic works. The authors identified key factors of crowd-funding projects of small business success and worked out practical recommendations on raising their viability. The research used complex methodology combining quantitative and qualitative methods of analysis. The quantitative section includes longitude analysis of viability of 42 projects in 2021–2024 by using Kox model, logistic regressions and estimation of finance indicators. The qualitative component is based on 25 deep interviews with project developers and contentanalysis of 1427 messages in communication channels. The obtained results demonstrate mixed dynamics: while in 6 months after setting-up 92% of projects are still active, in a year only 68% and in three years only 29%. The research showed the critical period between 12 and 24 months, when the majority of initiatives face the shortage of initial capital. As key factors of success the following ones were mentioned: finance sustainability (availability of reserve fund exceeding 20% raises the possibility of survival by 37%), communication activity (optimum frequency is 1.8 messages a week, which increases NPS index by 39%) and product adaptation (2.4 iterations a year correlates with turnover growth by 135%). The author identified interconnection between micro-economic parameters of projects and their long-term sustainability on Russian sample and elaborated concrete recommendations, including the rule of finance planning 30/50/20 and proposals on upgrading crowd-funding platform functions. These results open new prospects for further research in the field of branch specificity and cross-cultural analysis of crowdfunding practices.

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