Do I Make Sense? Linguistic Sensegiving and Equity Crowdfunding (Organization development journal)

Summary

• Social ventures face resource acquisition challenges from traditional intermediaries like banks, angels, or venture capitalists due to their hybrid market logic.p.1
• Equity crowdfunding requires investors to contribute a fraction of capital in exchange for company ownership and future cash flows.p.3
• Strategic language cues in campaign pitches allow entrepreneurs to shape how investors perceive social and economic value.p.4
• Communicating social process language creates shared empathy and encourages participation among crowdfunders.p.5
• Utilizing economic process language cues makes social venture goals actionable by presenting market opportunities explicitly.p.6
• A venture's long-term orientation moderates the effectiveness of both social and economic language strategies in crowdfunding pitches.p.7

Key insights

1. Equity crowdfunding allows social ventures to test market validation directly with a diverse crowd of investors.p.1
2. Unlike reward-based models, equity crowdfunders target direct participation in a venture's future financial returns.p.3
3. Sensegiving through written or verbal linguistic representations helps align diverse external expectations.p.4
4. Framing venture objectives as collective social change empowers funders to contribute financial capital.p.5
5. Highlighting economic terms such as sales, revenue, and numbers reduces ambiguity around a social venture's commercial viability.p.6
6. Adopting a long-term temporal orientation reassures non-financial and financial stakeholders regarding sustainable impact.p.7
7. Information asymmetry in equity crowdfunding can be mitigated by communicating explicit long-term goals.p.8