What if investors' generosity depended on the weather? That's the suggestion that comes from the findings of an astonishing Danish study. According to the researchers, the cloudier the sky, the less successful a participatory fundraising campaign is likely to be.
The Copenhagen Business School researchers who conducted this study are categorical: if the climate is gloomy, the mood of potential investors may also be gloomy, which could affect their generosity or even dissuade them from participating in your kitty.
Before reaching this surprising conclusion, the researchers analyzed participatory fundraising campaigns on the German community funding platform Companisto. A total of 102 participatory fundraising campaigns that received 67,982 pledges were scrutinized. The researchers paid attention to the city as well as the date the donation was made and finally the weather data corresponding to this information.
"Our research shows that on cloudy days, funders invest between 10-15% less money in risky equity crowdfunding campaigns," explains Ali Mohammadi, Assistant Professor at Department of Strategy and Innovation, Copenhagen Business School.
"The weather measure is simply cloud coverage, which varies from no cloud at all (0) to completely cloudy (1)... What is interesting about mood is that it is not directly related to economic value or return of an investment," adds the main author of the study.
While weather forecasts alone cannot, of course, determine a fundraising campaign's chances of success, the authors of this research recommend strategies to offset the negative effects of cloudy days, such as targeting more experienced investors. "We ...find that novice investors react more to the gloomy weather," outlined Ali Mohammadi.
Finally, the professor suggests that future entrepreneurs increase their communication and marketing actions in case of bad weather.