Financial Return Crowdfunding in Thailand and Investor Motivation Mechanism

Abstract

Crowdfunding is new to the Thai Financial markets. However, it has growth potential from existing unserved demand of entrepreneurs for funding and from investors who need investment alternatives. This research drew from international works, to understand development of the crowdfunding market in Thailand. The researcher conducted an online questionnaire survey with 402 Thai investors and performed an analysis of variance (ANOVA) to better understand the characteristics of prospective investors. Also, partial least squares structural equation modeling (PLS-SEM) was used to validate a model to predict investors’ investment intention. The findings indicated a low level of awareness in crowdfunding among Thai investors. Age, gender, familiarity with crowdfunding and risk attitudes had significant effects on investment intention. Millennial males with positive attitudes in risk taking were the potential investors. Most Thai investors tended to invest less than 15% of their portfolio in crowdfunding, employing crowdfunding as an alternative investment for risk diversification to target higher total returns. Using PLS-SEM, the researcher found that Thai investors conducted their evaluation of the business characteristics before going through evaluation of financial return, social benefits, and trust in crowdfunding platforms, which in turn led to emotion based investment decisions. This research provided a conceptual model of how Thai investors may be motivated to invest in crowdfunding. The results provided useful information for entrepreneurs who are considering crowdfunding as a means to fund their projects, and crowdfunding platforms developing fund raising campaigns.