Using crowdfunding for start-up evaluation: How task representation influences prediction accuracy of the crowd

The paper at hand examines if the crowd can offer valuable support in evaluating start-ups. In doing so, we plan to conduct an experiment 1.) to test if the crowd is capable to support experts in evaluating start-ups 2.) to examine how differences in task-representation (i.e. rating scales vs. a crowdfunding mechanism) influences cognitive processing of the crowd and 3.) to examine how types of cognitive processing (i.e. system 1 thinking vs. system 2 thinking) relate to predic-tion accuracy of the crowd. To this end, we plan to introduce crowdfunding as a new evaluation mechanism to support the crowd in coming up with more accurate predictions of start-up value. Our theoretical contribution is twofold. First, we aim to show if the crowd can be used to sup-port Venture capitalists in evaluating start-ups, in the sense that their evaluations agree with expert evaluations. Second, we plan to contribute to a better understanding about how the de-sign of evaluation mechanisms influences peoples cognitive processing and the crowds ability to predict start-up value.