Crowdfunding in a Not-So-Flat World
Indiana University-Purdue University Indianapolis
The rise of new platforms for crowdfunding has introduced new geographic patterns for entrepreneurs and their financing, departing from traditional venture capital’s heavy geographic concentration. We examine how crowdfunding activity maps onto existing geographic patterns of regional advantages, compare our more detailed data and analysis to previous work on traditional venture capital and on crowdfunding, and focus on the heterogeneity in types of crowdfunding projects. Specifically, we first show where and how crowdfunding spatially clusters. Next, we test how ‘crowds’ or economic activity, both generally and in project-related sectors, explain geographic patterns of crowdfunding activity. We also differentiate among digital media projects (e.g., music, video) and location-based projects (e.g., restaurants, theatre) to compare results for the more cloud-based and more place-based types of projects – highlighting how digital projects tend to cluster even more than crowds would explain, while more localized projects disperse more. I conclude with thoughts on crowdfunding, mobility, and long tails.
Douglas Noonan is a Professor at the O’Neill School of Public and Environmental Affairs at Indiana University-Purdue University Indianapolis. He earned his PhD in Public Policy from the University of Chicago before spending a decade on the faculty at the Georgia Institute of Technology. His economic and policy research addresses issues in the urban environment like revitalizations through creative placemaking and cultural districts, entrepreneurship in the arts and digital media, and community resilience. He has published recently on the built environment, neighborhood sorting, and arts entrepreneurship. He is director of the Arts, Entrepreneurship, and Innovation (AEI) Lab in partnership with the US National Endowment for the Arts, and he is the director of research initiatives for the new Center for Cultural Affairs at Indiana University. He serves as the co-editor-in-chief of the Journal of Cultural Economics and is a board member of the Association of Cultural Economics International.
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