Does a Past Category’s Success Influence Existing Entrepreneurial Fundraising?: A Legitimacy Spillover Perspective

Research on entrepreneurial crowdfunding has focused limited attention to the role of category in investors’ decisions. We examine the legitimacy spillover effect of projects within the same category of industry on the focal project’s fundraising. We decompose category legitimacy into two types—stable versus transient—and investigate their distinct effects on fundraising. Our dataset, derived from 31,767 projects on Kickstarter from 2010 to 2020, confirms the spillover effect of category legitimacy on entrepreneurial fundraising. Furthermore, the spillover effect of stable legitimacy is much stronger than that of transient legitimacy, and this effect weakens when entrepreneurs have greater past successes.