Signaling persuasion in crowdfunding entrepreneurial narratives: The subjectivity vs objectivity debate

Abstract A crowdfunding narrative often has a title, abstract, detailed description, reward statements, and the creators' biographies, which carry elements of subjectivity and objectivity in their wordings. The subjectivity and objectivity facets of an entrepreneurial narrative influence the signal's observability, thus affecting the fundraising outcomes. This study contributes to the understanding of the subjectivity versus objectivity debate in economic exchange in online crowdfunding, by examining how and if the crowdfunding outcomes can be better achieved through the deliberate positioning of the subjectivity versus objectivity claims in the various text sections and through carefully determining the prioritization of the subjective and objective contents. This study employs text mining and Bayesian inference to identify and differentiate the subjective and objective attributes in an entrepreneurial narrative. Taking 328,974 campaigns from Kickstarter, from April 2009 to April 2019, we observe a statistical difference between the text sections in a narrative. Some level of objective appeal should reside in the abstract and the reward statement. To court investors, the title, detailed textual description, and biography should be phrased subjectively. For the detailed textual description, the objective contents should be positioned at the start of the narrative, followed by the subjective statements, to enhance the success of online fundraising. Further, the overall prediction accuracy of funding support in the presence of subjective versus objective factors improves by 1.76%, from 76.37%, as shown through machine learning prediction analytics.