Why might an entrepreneur entering a new community be stigmatized? 

Last month, I had the pleasure of presenting a paper at Virtual Toronto, centred around the above question. In the paper, my co-authors and I adopt the perspective of “valuators”, influential actors in a community. This allowed us to develop a theory of strategic stigmatization.

To date, research has focused on the pro-community orientation of the valuators. But we propose that valuators may derive private gains from stigmatization processes. We sought to understand how entrepreneurs could become socially sanctioned and stigmatized. What would that process look like? To examine this, we analysed data from Kickstarter, the online crowdfunding platform.

Our results show that valuators’ status plays a fundamental role in the stigmatization of newcomers. We also discovered that cumulative and extreme sanctioning can turn into a boomerang effect. Over time, extreme sanctioning could both:

  • reduce the valuators’ status in the community
  • reduce the community’s attractiveness to newcomers

With these findings, our study extends the theory on social sanctioning and stigma. By understanding their strategic application in crowdfunding platforms, we can recognise and mitigate against them.

Read the full paper