A model for understanding the impact of trust on funders’ investment intention in Crowdfunding

Crowdfunding has become a transformative force in modern finance, offering a viable alternative to traditional fundraising methods by enabling individuals and startups to gather capital from a diverse pool of investors. However, the decentralized and open nature of crowdfunding platforms presents significant challenges, particularly in maintaining trust, which is a critical determinant of funders' investment decisions. Given that crowdfunding investments are often new and inherently risky, there is a growing need to better understand the factors that influence funders’ trust and how this trust can be cultivated to encourage investment. This study develops a comprehensive model to assess the impact of trust on funders' investment intentions in crowdfunding. Through a survey-based approach, the research identifies key dimensions that affect trust, including shared values between funders and project owners, situational normality, website familiarity, and perceived ease of use. The results demonstrate that trust significantly enhances funders' perceived usefulness of crowdfunding projects, which in turn increases their investment intentions. Shared values are found to be a particularly strong factor in building trust, while surprisingly, communication between funders and project owners does not have a substantial effect on trust in the crowdfunding context. These findings provide important insights for crowdfunding platforms, highlighting the need to focus on factors such as platform usability and the alignment of values between funders and project owners. By fostering trust through these mechanisms, crowdfunding platforms can enhance funders’ confidence and encourage greater investment participation.