Stretch Goals and Crowdfunding Success: The Trade-off between Likelihood to Invest and Contribution Amount

In order to help campaign creators collect more funds beyond their initial target, crowdfunding platforms provide mechanisms that allow them to adopt more goals, stretch goals, beyond their original target. Our study investigate how stretch goals affect potential backers’ decision-making process. Drawing on the literature on goal setting and decision under uncertainty, we propose that stretch goals are perceived differently during the funding decision process, and thus may lead to opposing effects at each stage of the process. We leverage granular data on funding decisions from a leading crowdfunding platform in Southeast Asia, and our preliminary results show that stretch goals are negatively associated with likelihood to fund while they are positively associated with contribution amount. Our study has the potential to offer a more nuanced understanding of how stretch goals affect crowdfunding performance by unpacking their influence on the funding decision-making process..