The Patent Paradox in Crowdfunding. An empirical analysis based on Kickstarter data

Author: Federico Munari (University of Bologna) and Azzurra Meoli (University of Bologna)

The goal of the paper is to provide theoretical explanations and to present empirical evidence about the role of patents in facilitating access to funding on crowdfunding platforms. The research question we address is the following: do projects based on patented technologies have a higher likelihood to be funded in crowdfunding campaigns, as compared to a control group of similar projects (with no patents)? We use data from Kickstarter and compare a sample of 272 projects based on patented technologies to a matched group of other projects. Our analyses suggest the existence of an apparent paradox. On the one hand, projects that declare the presence of an underlying patent represent a tiny minority of the whole population of crowdfunding projects (also when considering most technology-intensive sectors). On the other hand, the possession of patents does not seem to enhance the likelihood to obtain funding in a crowdfunding campaign. We provide explanations to reconcile such evidence with previous theoretical explanations on the role of patents in accessing external finance.

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