How Do Crowdfunding Intermediaries Perform Financial Intermediation? Mechanisms And Archetypes

Crowdfunding emerged as new way of funding by matchmaking capital givers and seekers. However, traditional financial intermediation theory falls short in explaining how crowdfunding brings demand and supply for capital to equilibriums. We thus develop a system theory of crowdfunding intermediation by unraveling specific mechanisms of crowdfunding intermediation and identifying dominant configurations of them. Following a mixed method approach, we collect data on implemented crowdfunding intermediation mechanisms by content-analyzing 160 crowdfunding intermediaries. We then apply unsupervised and supervised machine learning techniques in order to identify three timely robust archetypes of crowdfunding intermediation – philanthropic, hedonistic, and profit-oriented crowdfunding. This study contributes to crowdfunding literature by proposing a theory of crowdfunding intermediation that unravels the inner workings of crowdfunding intermediaries and reflects a theoretically grounded, empirically validated, and temporally stable taxonomy of crowdfunding intermediaries. Further, it extends financial intermediation theory by improving the understanding of how the Internet disrupts traditional financial intermediation.