Crowdfunding: Tapping the right crowd Belleflamme, Paul; Lambert, Thomas; Schwienbacher, Armin
Journal of business venturing,
09/2014, Letnik:
29, Številka:
5
Journal Article
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With crowdfunding, an entrepreneur raises external financing from a large audience (the “crowd”), in which each individual provides a very small amount, instead of soliciting a small group of ...sophisticated investors. This article compares two forms of crowdfunding: entrepreneurs solicit individuals either to pre-order the product or to advance a fixed amount of money in exchange for a share of future profits (or equity). In either case, we assume that “crowdfunders” enjoy “community benefits” that increase their utility. Using a unified model, we show that the entrepreneur prefers pre-ordering if the initial capital requirement is relatively small compared with market size and prefers profit sharing otherwise. Our conclusions have implications for managerial decisions in the early development stage of firms, when the entrepreneur needs to build a community of individuals with whom he or she must interact. We also offer extensions on the impact of quality uncertainty and information asymmetry.
•Two forms of crowdfunding are compared: pre-ordering vs. profit sharing.•Profit sharing is optimal for entrepreneurs with large capital requirements.•Building a community that supports the entrepreneur is crucial for crowdfunding to be a viable funding mechanism.
How should decentralized supply chains set the profit sharing terms using minimal information on demand and selling price? We develop a distributionally robust Stackelberg game model to address this ...question. Our framework uses only the first and second moments of the price and demand attributes, and thus can be implemented using only a parsimonious set of parameters. More specifically, we derive the relationships among the optimal wholesale price set by the supplier, the order decision of the retailer, and the corresponding profit shares of each supply chain partner, based on the information available. Interestingly, in the distributionally robust setting, the correlation between demand and selling price has no bearing on the order decision of the retailer. This allows us to simplify the solution structure of the profit sharing agreement problem dramatically. Moreover, the result can be used to recover the optimal selling price when the mean demand is a linear function of the selling price (cf. Raza 2014) Raza SA (2014) A distribution free approach to newsvendor problem with pricing.
4OR—A Quart. J. Oper. Res.
12(4):335–358..
The online appendix is available at
https://doi.org/10.1287/opre.2017.1677
.
This paper considers a green closed-supply chain consisting of a manufacturer and a retailer. A Stackelberg game model of centralized decision-making and decentralized decision-making with ...manufacturer’s fairness concern was constructed based on the consideration of retailer’s sales effort. The decision-making of supply chain members under the above two situations and their reasons are analyzed in depth. According to the model, a green closed-loop supply chain with profit sharing contract coordination fairness is designed. Finally, the correctness of the model is verified by numerical simulation. We generate our findings from three aspects, as follows: when the manufacturer has fair concern behavior, it is not conducive to the environmental performance of green products, resulting in waste of resources, but also forcing retailers to reduce sales efforts and increase the retail price of products. Finally, the benefits of green closed-loop supply chain are seriously damaged. The profit-sharing contract could improve the relationship between members of the supply chain to achieve sustainable economic and environmental development.
•The manufacturer’s fairness concern behavior is considered in the green closed loop supply chain.•The effects of fairness concern on retailer’s sales effort, product green degree, recycling rate and product pricing decisions were analyzed.•A profit-sharing contract is employed to realized the pareto improvement of green closed-loop supply chain with fairness concern behavior.•The research will help inspire enterprises to promote green production, and guide consumers to green consumption.
Poverty eradication is a priority for governments worldwide. In this study, a process analysis was performed to rigorously examine poverty eradication in China. First, various stages of poverty ...eradication in China were identified, and the development of poverty eradication was reviewed to demonstrate the achievements and significant contribution to global poverty eradication. Second, using demographic information, the geographical distribution of rural and impoverished populations were analyzed to validate the positive correlation between them. Through the targeting process, significant geographical disparities of impoverished areas in China were clearly revealed, and the impoverished population was further identified. Third, the natural solar energy endowment was thoroughly analyzed to assess the applicability of solar photovoltaics in various areas. Policy development and the anticipated benefits of solar photovoltaic projects for poverty alleviation (PVPPA) were described and evaluated. Finally, China's experiences with PVPPA were discussed. The results indicate that there are some problems associated with the implementation of PVPPA regarding the policy and management schemes, technical support and logistics, and financial resources and assurance. Recommendations to overcome these problems are also discussed. China's PVPPA program introduced here provides valuable insights regarding poverty alleviation, especially regarding the targeting process, participatory development, and profit sharing, and may thus benefit societies worldwide.
•To illustrate the course of China's poverty eradication through process analysis.•To analyze the allocation of and the relationship between poor and rural populations.•To review the development of photovoltaic projects for poverty alleviation (PVPPA).•To examine the policy of PVPPA and to evaluate its problems.•To conclude the features of China's PVPPA, targeted, participatory and sharing.
SYNOPSIS This study investigates the structure of profit-sharing schemes and performance incentives within accounting firms. Accounting firms have a strong historical tradition of professionalism but ...they are also commercial entities. In particular, the audit function within accounting firms serves an important public interest role. Profit-sharing schemes and performance incentives play a valuable role in managing the tension between commercialism and professionalism. Interviews with partners from all Big 4 firms and four mid-tier firms were conducted to gain insights into details of the firms' profit-sharing schemes and performance incentives. We found that the Big 4 firms have established sophisticated commercial performance measurement systems in an attempt to accurately measure the contributions of individual partners, and a number of these metrics are nonfinancial in nature. The range of partner salaries within firms has increased significantly in recent years, providing a further reason for a greater focus on measuring performance. From our sample of mid-tier firms we found a trend toward similar profit-sharing and performance incentives as currently exist within the Big 4, suggesting mid-tier firms are also moving toward a more commercial business model.
This paper examines how a firm's employment policy, particularly employee cash profit-sharing plans, affects its financial reporting. We find that firms with employee cash profit-sharing programs are ...more likely to engage in downward earnings management to reduce labor costs, especially with decreasing performance. This effect is more evident in firms with higher labor costs and human-capital reliant firms. Our findings are robust to a variety of model specifications and endogeneity problems.
We study the determinants of the use of profit sharing schemes (PSS) by private companies, exploiting a firm-level dataset for Germany. First, our results from static regression models replicate ...studies for the U.S. which report a positive correlation between R&D activity and PSS use. Similar to those studies, we find that a firm's turnover is strongly associated with PSS use, whereas this does not hold for the age of a firm. Firms with an unionised or more qualified workforce are also associated with PSS use. By exploiting the panel structure of our data, we also provide a novel set of tests by means of dynamic models estimation. The analysis sheds light on the relation between R&D activity, past innovation and PSS use.
This article aims to use a bargaining power model to reduce moral hazard—in the form of entrepreneurial effort shirking—and derive an optimum sharing ratio of a Profit and Loss Sharing (PLS) contract ...that involves a Venture Capitalist and an Entrepreneur. The model reveals the following interesting findings. First, under complete information—where the Venture Capitalist has a bargaining power ‐ Venture Capitalist offers the entrepreneur a profit sharing ratio that is less than her capital contribution ratio. Second, in an incomplete information setting, the entrepreneur demands a profit sharing ratio higher than her capital contribution ratio when the sum of the marginal cost (from exercising a higher effort) and private benefits (from exercising a low effort) is greater than the marginal return (from exercising a high effort). In addition, the model is used to derive a span of negotiation about the profit sharing ratio. Finally, an agent based simulation (Netlogo) platform is considered to implement the model, which allows a faster numerical calculations of the profit share and helps decide on the validity of the funding contract.
The Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) is not currently equipped to empower Indigenous Australians to set up their for-profit businesses under its regime due to its ...rigidity and interventionist approach. This article argues the need for a change. A proposal is put forward to allow for the creation of a new type of corporation under the existing legislative framework for Indigenous entrepreneurs to run their for-profit businesses in a culturally appropriate way.
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