Impact of Reward Crowdfunding on Entrepreneurial Nature of Crowdfunded Ventures

The goal of the paper consists in identification of changes in entrepreneur-customer relations generated by the emergence of crowdfunding. The research is based on the concept of on-demand economy. It introduces taxonomy of rewards used in crowdfunding based on the type of value provided to backers and amount of this value. The analysis of reward crowdfunding demonstrates that backers actually finance ventures, not products. Crowdfunded venture is established in response to backers' needs and backers become customers of this venture. It means that such venture can be considered as venture on demand. Rise of this new type of ventures transforms the model of relations between customers and entrepreneurs. Customers become active stakeholders of business development and create demand for new ventures (not for new products). Thanks to this new model of relations customers can better satisfy their needs while entrepreneurs can reduce the level of risks. The paper contains a conceptual framework that describes this evolution of customers within the system of customer-entrepreneur relations.