Chapter 8: A Social Network Approach for Crowdfunding

We propose a framework based on social network analysis for crowdfunding projects.

Our approach is based on the strength of both weak and strong ties of the social network established by the project proponents. Our approach also considers not only the characteristics of the target population and the close social circle of the proponent but also mainly the community of potential backers strongly and weakly attached to his or her network of friends.

Supported by a literature review on social networks, crowdsourcing and crowdfunding, we have established a framework with five constructs (Extension, Cohesion, Centralization, Clustering, and Power) that can help entrepreneurs to raise funds through crowdfunding platforms.

Structural properties of these social networks such as size, cohesion and centralization may prove useful for applicants and platforms interested in succeeding in their projects and for stimulating the interest of scholars in the growing crowdfunding phenomenon.