Enabling knowledge contexts at PledgeMe

Abstract

Crowdfunding is a phenomenon that has grown rapidly in the past few years. In essence, crowdfunding involves funding support from ‘the crowd’ for an initiative, product or service. The four main kinds of crowdfunding include donation-based, reward-based, equity-based and lending-based. This case study focuses on equity crowdfunding. PledgeMe is a crowdfunding company based in Wellington that offers reward, equity and lending-based crowdfunding. PledgeMe has hosted over 1000 crowdfunding campaigns and over $12.6 million has been raised in pledges via the platform.

Research on equity crowdfunding is still emerging, with topics of interest including motivations, success factors, and how crowdfunding builds communities. There have been 15 successful equity campaigns on the PledgeMe platform, with a variety of products and services raising capital to grow their business. As a start-up company, PledgeMe is seeking ways to be ensure more equity campaigns are successful, while also wanting to continue building the New Zealand crowdfunding community.

This case study was based on the outcomes of six interviews. Three interviews were conducted with PledgeMe staff, and three interviews were conducted with people who had run equity crowdfunding campaigns. These interviews discussed each person’s role and company, the crowdfunding process, and in particular how people knew what to do in order to be successful when crowdfunding.

Analysis for this case study looked at knowledge management frameworks, and considered models for knowledge creation, transfer and use. Nonaka and Takeuchi (1995) proposed the SECI framework as a way to consider how knowledge creation and transfer evolves. The elements of the framework are socialisation, externalisation, combination and Internalisation. These elements are linked via a spiral, which sees the knowledge grow as the individual or organisation continually moves through each of the elements in turn. These are linked to the concept of ba, which indicates the space for the creation and transfer of knowledge.

In the 20 years since the SECI framework was first proposed, scholarship has advanced and considered whether the elements are still relevant. Choo and de Alvarenga Neto (2010) have situated the framework in the context of knowledge processes, enabling conditions, and interaction levels, and it is this situation which is used as a model for this case study. PledgeMe is shown to have particular strengths around personal relationships, operating in the one-on-one level of interacting ba. While PledgeMe has a solid basis in the social/behavioural and cognitive/epistemic enabling conditions, it is less strong in the information systems/management and strategy/structure conditions, and this is an area for future growth.

The recommendations in this case study relate to prioritising PledgeMe’s high value contributions, and finding ways to spend less time on low value work. It is recommended that PledgeMe outsource aspects of the CrowdfundingU programme, and that it considers implementing more regular, structured reviews of recent work. It also suggests having a checkpoint for equity crowdfunding campaigns, to ensure that sufficient work has been undertaken at a certain milestone to make it more likely that the campaign will be successful.

PledgeMe gets the most value out of its work to build a community and activate its own crowd. This case study recommends continuing this work, and building on previous knowledge to continue to enhance its community and become a more successful company.