The Business Model Of Crowdfunding With Financing Incentive And Constraint

Crowdfunding is a new way in Internet finance, involved three agencies of by project owner, investor and platform. The project owner, including enterprises, individuals or nonprofit organizations, through the Internet, opens the project information and sets financing target, for raising funds from public investors to achieve specific purposes.On the basis of other theories, this paper studies the game behavior and the financing incentive and constraint between investor and project owner in the crowdfunding platform, also researches the relationship among financing threshold, reward form, project basic value, investor property and quantity, risk preference and so on. Besides, we extend the basic model.to provide insight into production commitments, quadratic form of incentive reward, and threshold endogeneity.The main conclusions of this study are summarized as follows. Firstly, the optimal ratio of reward increases as threshold increases but decreases as public incentive parameter, project basic value and investor quantity increases. And the project profit increases as project basic value and investor quantity increases. But threshold has different effect on project profit in different situations. Secondly, in different form of project reward, investor property and risk preference have different influence mechanism on the optimal ratio of reward. And when threshold and investor quantity meet certain condition, the project owner should choose quadratic return form of reward to obtain higher net profit of project. Thirdly, given threshold, project owner can stimulate investment and gain all investor utility by adjusting the ratio of reward. And when threshold is large enough, by the strategy of limiting the investors get positive utility, project owner can achieve higher project profit. Fourthly, when threshold is endogenous, project owner will set the project threshold increases as project basic value and investor quantity increases.