Abstract
Finding factors that influence new venture success is important to entrepreneurs for increasing their odds of succeeding, to investors both venture capitalists (VCs) and crowd-funders for better decision making and to researchers for better understanding the dynamics of entrepreneurial ventures. In this study, the investment process of VCs were studied with respect to the investment and decision making process of crowd-funders for fundraising. Based on literature study, it was seen that during the investment process, VCs tend to focus on screening for factors that are important predictors of success. An exhaustive list of factors were identified. Among the list of factors, the recurrent theme for the selection criteria was team experience and expertise and the market conditions intended for the product. In case of crowdfunded projects, the success of the project is based on what information is deemed important for the crowd-funders during their decision making process. A total of 81 different samples were collected in the “Wearable” category from the Kickstarter crowdfunding platform. These projects were assessed and evaluated using an amended Real-Win-Worth framework (RWW), which focusses on different dimensions that influence the success of a project. The analysis identified three important RWW factors that influence the success of crowdfunded projects. The main factors identified were- proposed value addition to the customer offered by the firm, the actual value additions to the customer and talent resources of the firm that allow the firm to maintain product advantage and product competitiveness. It was seen that these factors identified were a part of an exhaustive list of factors that were identified during the screening by VCs as well. From a product development process perspective at early new ventures, the process was unstructured and lacked formal decision making processes. Also the process was highly integrated with the end customer highly influencing the decision making process. Also, from a product attribute point of view, with successive stages in development, the product features change and get redefined. Since attributes change, the customer interaction points during the development process serve as reality check for the new venture to ensure the proposed value addition is similar to the actual value addition, hence influencing product success.