The success of crowdfunding projects: technology, globalization, and geographic distance

We explore the implications of geographic distance between founders and backers for reward-based crowdfunding. We argue that the development of crowdfunding platforms in the past decade has expanded significantly the network of entrepreneurs by attracting long-distance supporters. Using projects from Kickstarter during a four-week period, we found that geographic distance increased the number of funders for innovative technology-based crowdfunding campaigns, and for projects with early backers from large metropolitan areas. The finding was robust using average distance measures weighted by top backer cities. However, the positive distance effect was marginal for projects founded in smaller cities.