Coordinating contributions in crowdfunding for sustainable entrepreneurship

Crowdfunding has become a serious opportunity for financing sustainable entrepreneurship. However, funders oftentimes compete with several similar projects for funding. In crowdfunding, projects are only realized if they reach a minimum funding threshold, and this means that funders need to coordinate to reach such a threshold. In this study, we examine how different types of sustainability seals help solve this coordination problem. We simulate a crowdfunding situation using a threshold public goods laboratory experiment. Our results show that the choice of a signal is sensitive to the type of crowdfunding project. For a sustainability project, a non-governmental seal is a better match. Our findings offer new insights for innovators, entrepreneurs, and institutions on how to obtain contributions for sustainability projects and ultimately bring more of this type of project to life. [Display omitted] •Third-party seals help solve the coordination problem in sustainability crowdfunding.•A regional-framed third-party seal coordinates better than an institutional one.•The seal has to match the project characteristics.•Two simultaneous third-party seals lead to an overall reduction in contribution.