University Report: Trust Management in Reward-Based Crowdfunding

This report investigates the crucial role of trust management in reward-based crowdfunding, focusing on its impact on fundraising performance for small businesses. The study explores the relationship between trust management and fundraising, analyzing data from reward-based crowdfunding platforms. It examines the significance of trust management in the context of unique characteristics and data sets, as well as the effects of dynamic entrepreneur-sponsor interactions on fundraising success. The research employs the elaboration likelihood model (ELM) to assess how trust influences crowd-funding performance, using both quantitative and qualitative data. Results indicate a positive relationship between trust management and fundraising, with the study highlighting the importance of both central and peripheral routes to establishing trust. Specifically, the research emphasizes the impact of entrepreneur-sponsored interactions and their role in enhancing entrepreneurial success through fundraising, thereby improving the quality of small businesses and helping entrepreneurs develop their ventures by leveraging trust management to boost fund raising.

Running head: THE ROLE OF TRUST MANAGEMENT IN REWARD-BASED
CROWDFUNDING
THE ROLE OF TRUST MANAGEMENT IN REWARD-BASED CROWDFUNDING
Name of Student:
Name of University:
Author Note:

1THE ROLE OF TRUST MANAGEMENT IN REWARD-BASED CROWDFUNDING
Table of Contents
The role of trust management in reward-based crowd funding.......................................................3
1. The central question and any ancillary question..........................................................................3
2. The type(s) of data that were accessed........................................................................................3
3. The methods of data collection....................................................................................................4
4. Data interpretation.......................................................................................................................4
5. Results and discussion.................................................................................................................5
Reference List..................................................................................................................................6

2THE ROLE OF TRUST MANAGEMENT IN REWARD-BASED CROWDFUNDING
The role of trust management in reward-based crowd funding
Crowdfunding is an intensively popular way of funding the small businesses where
entrepreneurs promote financial donations from individuals for retaining service or product.
Entrepreneurs demonstrate their business idea or project on a crowd funding platform for getting
rewards, donations and businesses. According to several experts, this type of funding is good for
small businesses that leads to growth in the future which ids dependent on social trust of people.
The article named, ‘Reward based trust management in crowd based funding’ tries to find the
relationship between trust management and fundraising performance in reward based crowd
funding.
1. The central question and any ancillary question
The aim of the paper is to understand the significance of trust management in reward
based crowd funding on the crowdsourcing performance. At first, the role of trust management
in reward based crowd funding is evaluated with respect to unique characteristics and data sets.
After this, the effect of dynamic entrepreneur sponsor though message interactions on reward
based fundraising has been evaluated. The central question or the problem statement is that
whether trust management has any impact on the amount of crowd funding. This is evaluated in
a structured manner by using theories and then proceeding with data analysis to provide
qualitative results.
2. The type(s) of data that were accessed
The data accessed for the paper are secondary because collection of primary data is
impossible and impacts can be effectively analyzed with secondary data that is gathered from
authentic sources. The data proposed for the paper uses quantitative and qualitative data to

3THE ROLE OF TRUST MANAGEMENT IN REWARD-BASED CROWDFUNDING
establish the relationship between trust management and fundraising projects. The impact of
direct entrepreneur sponsor interactions on the crowd funding platform is effectively evaluated
through the paper that is effective for the organizational development.
3. The methods of data collection
The data for the paper is collected from the web sources that is analyzed by using the
model of elaboration likelihood. This is crucial for effective findings for the research. Previous
papers are analyzed that is done on the same topic to find the gaps in writing and understand the
way analysis is done. According to reviews from several journals and research papers, it is
effective that previous papers mainly pointed out the popularity of entrepreneurs on third party
level like social media against fundraising performance. The study will effectively focus on the
core parameters that can enhance trust management. The role is to employ a quality relationship
between the two parameters that is crucial for the analysis of crowd raising performance with
respect to trust management.
4. Data interpretation
The elaboration likelihood model (ELM) was constructed to understand the implication
of reward based crowd funding on fundraising performance. The model of elaboration likely has
been chosen as it describes the conditions that leads to a change in attitude of people. The
research is based on five hypotheses developed from ELM. Secondary quantitative and well as
qualitative data has been collected for the analysis, from online sources that serves as one of the
biggest reward-based crowd funding platforms in China. The paper proposes about the range of
factors that can improve the growth of small business and help in the development process of
new entrepreneurs. The hypothesis has been tested with respect to 829 reward based crowd

4THE ROLE OF TRUST MANAGEMENT IN REWARD-BASED CROWDFUNDING
funding projects. The model of partial least squares has been developed to undergo the analysis
for the profile of sponsors and entrepreneurs and analyze their behavior and projects.
5. Results and discussion
The results attained from data analysis is that there exists a positive relation between
fundraising performance and trust management. Results indicate that trust management has
effectively improved the performance of fundraising through peripheral and central routes. The
central routes comprise of credit worthiness of entrepreneurs and peripheral routes is related to
the entrepreneur sponsor interactions. The findings indicate that the effect of trust management is
more for the peripheral route as compared to central routes (He et al., 2016). This is because
collaboration with communities, personal and dynamic interactions is crucial for trust
establishment other than doing historical success records. In correspondence to the important
changes, it has been observed that entrepreneur sponsored interactions has led to entrepreneurial
success with respect to fundraising performance.
It can be said that rust management is an abstract system that estimates the effectiveness
of trustworthiness on high quality and reliable customer management. Reward based crowd
funding has a positive relationship with trust management. Moreover, people likes to invest in
projects and business when they believe that their money would not go wasted. That is why
entrepreneurs use the scheme of trust management to raise crowd funding that helps in business
development without even paying any more penny for the project as investment. Thus, crowd
funding can improve the quality of small business and help entrepreneurs to develop their
businesses and take them to higher level by using trust management to enhance fund raising.

5THE ROLE OF TRUST MANAGEMENT IN REWARD-BASED CROWDFUNDING
Reference List
He, W., Xu, G., Zheng, H., Hung, J. L., Qi, Z., & Xu, B. (2016). The role of trust management in
reward-based crowdfunding. Online Information Review.