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1
Venturelli, Valeria, Alessia Pedrazzoli, and Giovanni Gallo. "Birds of a Feather Flock Together: The Inclusive Effect of Similarity Patterns in Equity Crowdfunding." Sustainability 12, no. 9 (April 26, 2020): 3539. http://dx.doi.org/10.3390/su12093539.
Повний текст джерелаАнотація:
Crowdfunding is helping to drive financial inclusion by expanding the availability of funds to traditionally excluded and underserved groups of individuals, such as ethnic minority and female entrepreneurs. This study verifies how ethnic and gender similarity between investor and entrepreneur can affect the invested amount in an equity crowdfunding campaign. Using an integrated approach with linear regression and Shapley decomposition, we analyze 8600 investments made by 5996 unique personal shareholder investors in 81 equity crowdfunding campaigns. Results show that similarity patterns seem to significantly influence the amount invested in a campaign but their effects change according to investor’s gender and ethnic origin. In fact, even if female investors give a higher amount to men-led companies, their preference changes if the company is run by a female founder belonging to the same ethnic minority group. Results emphasize equity crowdfunding’s potential as a tool for the financial inclusion of ethnic minority groups of investors and entrepreneurs.
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Wachira, Virginia Kirigo, and Esther Wanjiru Wachira. "Equity Based Crowdfunding : Determinants of Successful Campaign: the Case of Crowdcube Platform in the United Kingdom." Pénzügyi Szemle = Public Finance Quarterly 67, no. 1 (2022): 130–49. http://dx.doi.org/10.35551/pfq_2022_1_8.
Повний текст джерелаАнотація:
The study is aimed at exploring what influences the amount of money raised which can either lead to the success or failure of equity-based crowdfunding using Crowdcube. The study used Pearson correlations and multiple regression analysis. The regression model was considered a good fit as it was statistically significant. The findings of the paper revealed that the number of investors, target amount, and pre-money valuation strongly and positively influence the success of equity-based crowdfunding campaigns. Additionally, equity, display of share price information, and online social media presence are other factors that influence the success of equity-based crowdfunding campaigns. However, previous crowdfunding history was negatively associated with the success of campaigns. The uniqueness of the study will benefit investors and founders who aim at running or investing in successful equity-based crowdfunding campaigns in the UK and globally. The study recommends further research using other equity-based crowdfunding platforms in different countries and continents.
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Łukowski, Michał, and Piotr Zygmanowski. "The role of crowdfunding in reducing the equity gap in Poland." Ruch Prawniczy, Ekonomiczny i Socjologiczny 81, no. 3 (September 30, 2019): 185–201. http://dx.doi.org/10.14746/rpeis.2019.81.3.12.
Повний текст джерелаАнотація:
The aim of the paper is to verify if equity crowdfunding has an impact on equity gap reduction among early stage companies in Poland. The analysis is based on crowdfunding campaigns organized on the three most popular platforms in Poland during the 2015–2019 period. The presented research on equity crowdfunding allowed the main goal of the paper to be accomplished, namely to characterize equity crowdfunding in Poland. The results obtained also enabled equity crowdfunding to be placed among other equity capital sources for companies in the early stages of development. The results of the study verify the hypothesis that equity crowdfunding has an impact on equity gap reduction among Polish early stage companies. Our key findings prove that equity crowdfunding in Poland is mainly used by relatively small, early stage companies that operate in various sectors. Another finding is that most of the companies raised capital that qualifies as the Macmillan gap. We also proved that there is a relatively high level of information asymmetry among equity crowdfunding campaigns and provided our own definition of equity crowdfunding.
4
Troise, Ciro. "Marketing Strategies in Equity Crowdfunding: A Comparative Study of Italian Platforms." International Journal of Marketing Studies 11, no. 4 (September 29, 2019): 16. http://dx.doi.org/10.5539/ijms.v11n4p16.
Повний текст джерелаАнотація:
This paper explores equity crowdfunding platforms from a marketing perspective. The present exploratory study attempts to make a double contribution to the current literature on equity crowdfunding. Firstly, it analyzes the marketing strategies of the platforms by focusing on the well-known 4Ps marketing mix framework, i.e. product, price, promotion and placement. Each dimension presents three types of categories. Second, the study investigates the marketing strategies of both large platforms and small platforms, then the differences between these two types of platforms are examined in terms of campaigns’ outcomes, i.e. funding collected (in %), funding amount (in €) and number of investors. Platforms adopt a standardization strategy for pricing and placement, while a differentiation strategy is mainly adopted for promotion and products. Large platforms offer a wider range of services (in particular ongoing campaign services and post-campaign services) and promotional activities (in particular leverage many communication channels). The analyses disclose significant statistically differences between these two types of platforms. Projects posted on large platforms are more likely to get higher campaigns’ outcomes. In literature, little is known about marketing strategies in equity crowdfunding platforms, thus this study tries to fill this gap. The paper is the first to analyze the 4Ps of platforms and to conduct a comparative empirical study to determine the differences of campaigns’ outcomes between large and small platforms. The Italian context represents a significant case of developed country in theme of equity crowdfunding. The results are useful for platform managers, entrepreneurs, investors and authorities.
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Horvát, Emőke-Ágnes, Johannes Wachs, Rong Wang, and Anikó Hannák. "The Role of Novelty in Securing Investors for Equity Crowdfunding Campaigns." Proceedings of the AAAI Conference on Human Computation and Crowdsourcing 6 (June 15, 2018): 50–59. http://dx.doi.org/10.1609/hcomp.v6i1.13336.
Повний текст джерелаАнотація:
In recent years crowdfunding has diversified and grown beyond most experts' projections. Originally aiming to serve venture ideas and entrepreneurs outside the focus of traditional capital markets, the crowdfunding marketplace has developed a complicated relationship with novel ideas. Yet, there is little to no research on the relationship between project novelty and success in crowdfunding. This paper measures the novelty of crowdfunding campaigns using the content and language of their pitches, capturing their tendency to combine different venture sectors and topics in distinctive ways. Using a unique data set that covers four years of activity on a leading equity crowdfunding platform, we investigate the link between novelty and success, as well as how novelty appeals to different kinds of investors. We find that novelty derived from campaign pitches is negatively related with fundraising success even when controlling for quality and style of writing. We also find that novel campaigns are more likely to attract less-frequent, large-sum investors. Our findings contribute to the long-standing debate related to the trade-offs between innovativeness and conventionality in maximizing chances of startup survival. Our results also have important implications for entrepreneurs writing fundraising pitches and for platform providers who wish to facilitate successful innovation.
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Battisti, Enrico, Fabio Creta, and Nicola Miglietta. "Equity crowdfunding and regulation: implications for the real estate sector in Italy." Journal of Financial Regulation and Compliance 28, no. 3 (January 10, 2020): 353–68. http://dx.doi.org/10.1108/jfrc-08-2018-0109.
Повний текст джерелаАнотація:
Purpose This paper gathers initial evidence about the nature and features of the equity crowdfunding model in Italy, especially in terms of regulations. The purpose of this study is to examine how equity crowdfunding might support the real estate sector in Italy. Design/methodology/approach To explore the recent initiatives in the development of FinTech in Italy, especially referring to equity crowdfunding’s instrument, a qualitative perspective is used. In particular, this paper relies on primary data from regulations and secondary data from the public domain, which are examined in relation to the current literature. Findings The results of this study show that equity crowdfunding represents a funding method that is rapidly increasing in Italy, despite rather rigid regulation. Among the various sectors involved, the real estate sector could benefit from the crowdfunding models and, specifically, from the equity one. The development of new real estate equity crowdfunding portals that allow diversification of investment (by reducing the typical entry barriers for real estate investment) could guarantee greater investment transparency and simplicity. Practical implications Real estate crowdfunding can be a simple way to invest in the real estate industry. Thanks to the use of technology, specifically internet-based platforms, this type of crowdfunding allows for small investors, as well as professional investors, to access an asset class otherwise not open to small investment tickets and improve the diversification of investments. Originality/value Although recent literature has examined the concept of crowdfunding and highlighted different models, aspects and campaigns, no prior studies, to the authors’ knowledge, have explicitly and jointly investigated, also based on the state of art of regulation, the equity crowdfunding model and the real estate sector in Italy.
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Lukkarinen, Anna, Jeffrey E. Teich, Hannele Wallenius, and Jyrki Wallenius. "Success drivers of online equity crowdfunding campaigns." Decision Support Systems 87 (July 2016): 26–38. http://dx.doi.org/10.1016/j.dss.2016.04.006.
Повний текст джерела
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Felipe, Israel José dos Santos, and Bruno César Franca Ferreira. "Determinants of the success of equity crowdfunding campaigns." Revista Contabilidade & Finanças 31, no. 84 (December 2020): 560–73. http://dx.doi.org/10.1590/1808-057x202010460.
Повний текст джерелаАнотація:
ABSTRACT Given that equity crowdfunding has grown significantly in Brazil and that this market has been frequently sought by startups as an alternative to scarce credit, this study investigated the elements that determine the success of their financing campaigns. The article fills the gap related to the absence of studies analyzing the probability and time of success of startup financing. In Brazil, the research on this is still in its infancy and there has been little discussion regarding what can determine the success of this type of financing. The findings presented here provide managerial contributions for different stakeholders, ranging from platform managers and entrepreneurs to the ordinary citizen, who ultimately acts as an inducer of change in society, without the need for financial intermediaries. The discussion around the elements that influence the success of startup financing has revealed that the characteristics of the venture profile have been able to determine the success of the financing. This information applied to the dynamic of resource allocation in this market can generate more financial efficiency for private agents as an investment performance parameter and, for public agents, as an input for monitoring. The logistic regression with marginal effects and a dummy for time fixed effects were used. The time of success analysis was carried out via survival models. The sample covers 99 startup financing campaigns from 2014 to 2017. The study identified that the financial goal, the venture category, advisor participation, the campaign duration, and the type of equity offered to the investor positively affect both the probability and speed of success of the startup financing. Its contribution lies in the use of these findings to formulate strategies geared toward estimating success, which enable an appropriate allocation of financial resources.
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Murray, Alex, Suresh Kotha, and Greg Fisher. "Community-Based Resource Mobilization: How Entrepreneurs Acquire Resources from Distributed Non-Professionals via Crowdfunding." Organization Science 31, no. 4 (July 2020): 960–89. http://dx.doi.org/10.1287/orsc.2019.1339.
Повний текст джерелаАнотація:
We examine how entrepreneurs acquire financial resources for their early-stage ventures from distributed non-professionals via crowdfunding. Through an inductive analysis of entrepreneurs’ successful and unsuccessful non-equity crowdfunding campaigns, we derive a holistic framework of community-based resource mobilization. Our framework consists of three distinct processes entrepreneurs use to attain financial capital from non-professional resource providers over time: community building to establish psychological bonds with individuals possessing domain-relevant knowledge, community engaging to foster social identification with existing resource providers, and community spanning to leverage proofpoints with intermediaries who can help orchestrate resource mobilization with broader audiences. Entrepreneurs’ enactment and temporal sequencing of these three processes distinguish successful versus unsuccessful resource mobilization efforts in a crowdfunding setting. Community building is used by successful entrepreneurs primarily prior to a campaign’s launch, community engaging is used throughout a campaign, and community spanning is most effectively used after achieving a campaign’s initially-stated funding goal. This study empirically illustrates and theoretically conceptualizes the dynamics of resource mobilization in a crowdfunding setting.
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Martínez-Gómez, Cristina, Francisca Jiménez-Jiménez, and M. Virtudes Alba-Fernández. "Determinants of Overfunding in Equity Crowdfunding: An Empirical Study in the UK and Spain." Sustainability 12, no. 23 (December 2, 2020): 10054. http://dx.doi.org/10.3390/su122310054.
Повний текст джерелаАнотація:
Crowdfunding constitutes one of the financial solutions to achieve the sustainable development goals, by fostering innovation and economic growth. This paper conducts an empirical two-country analysis (the UK and Spain) of characteristics of successful offerings to assess the distribution of overfunding in equity crowdfunding. Unlike previous research, which has usually comprised campaigns posted on single-country portals, our study is based on an international leading platform operating with country-differentiated websites, Crowdcube. Such an approach allows us to identify influential factors which are dependent on country and, simultaneously, to control for those platform-related factors. To focus on the overfunding distribution, a quantile regression methodology is adopted for a total sample of 299 overfunded campaigns from 2015 to 2018. Overall, empirical results show that the effects of key campaign features (equity, voting rights and social capital) are stronger and more significant at the 75th and 90th quantiles for the overfunding level and the number of investors. Furthermore, we find significant differences across countries, which persist along the distributions of overfunding. Yet, interestingly, between-country differences in overfunding level vanish for the technological sector. Our research provides further insights into the relation between equity crowdfunding and sustainable finance.
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Giudici, Giancarlo, Massimiliano Guerini, and Cristina Rossi-Lamastra. "Elective affinities: exploring the matching between entrepreneurs and investors in equity crowdfunding." Baltic Journal of Management 15, no. 2 (March 31, 2020): 183–98. http://dx.doi.org/10.1108/bjm-08-2019-0287.
Повний текст джерелаАнотація:
PurposeThe authors investigate whether matchings in equity crowdfunding are more likely to happen if homophily exists between investors and investees. They focus on gender, age and geographical proximity as crucial dimensions of similarity among individuals and thus of homophily. Furthermore, they investigate whether the effect of homophily depends on the risk of opportunism, which investors allegedly attribute to proponents basing on their area of residence.Design/methodology/approachThe authors analyze a hand-collected database of 13 equity crowdfunding campaigns launched by Italian innovative start-ups from January 2013 to June 2016, which includes information about 384 equity crowdfunding investments carried out by 361 different investors.FindingsThe authors find a significant effect of geographical proximity and age similarity in explaining the probability that an investor finances a campaign. Moreover, these effects are particularly relevant if the proponent is located in areas characterized by a high risk of opportunistic behavior. Interestingly enough, they do not detect any significant effect related to gender.Originality/valueIn this paper, the authors have the unique opportunity to analyze a whole market (the Italian market) during three years, from inception (2013–2016), and to collect the identities of the investors in all successful campaigns.
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Mark, Erica, Mira Sridharan, Brian Florenzo, Olivia L. Schenck, Mary-Margaret B. Noland, John S. Barbieri, and Jules B. Lipoff. "Crowdsourcing Medical Costs in Dermatology: Cross-sectional Study Analyzing Dermatologic GoFundMe Campaigns." JMIR Dermatology 5, no. 2 (April 22, 2022): e34111. http://dx.doi.org/10.2196/34111.
Повний текст джерелаАнотація:
Background Crowdfunding for medical costs is becoming increasingly popular. Few previous studies have described the fundraising characteristics and qualities associated with success. Objective This study aimed to characterize and investigate the qualities associated with successful dermatological fundraisers. Methods This cross-sectional study of dermatological GoFundMe campaigns collected data, including demographic variables, thematic variables using an inductive qualitative method, and quantitative information. Linear regression examined the qualities associated with success, which are defined based on funds raised when controlling for campaign goals. Logistic regression was used to examine qualities associated with extremely successful campaigns, defined as those raising >1.5 times the IQR. Statistical significance was set at P<.05. Results A total of 2008 publicly available campaigns at the time of data collection were evaluated. Nonmodifiable factors associated with greater success included male gender, age 20-40 years, and White race. Modifiable factors associated with success included more updates posted to the campaign page, non–self-identity of the campaign creator, mention of a chronic condition, and smiling in campaign profile photographs. Conclusions Understanding the modifiable factors of medical crowdfunding may inform future campaigns, and nonmodifiable factors may have policy implications for improving health care equity and financing. Crowdfunding for medical disease treatment may have potential implications for medical privacy and exacerbation of existing health care disparities. This study was limited to publicly available GoFundMe campaigns. Potential limitations for this study include intercoder variability, misclassification bias because of the data abstraction process, and prioritization of campaigns based on the proprietary GoFundMe algorithm.
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Horvat, Emoke-Agnes, and Theodore Papamarkou. "Gender Differences in Equity Crowdfunding." Proceedings of the AAAI Conference on Human Computation and Crowdsourcing 5 (September 21, 2017): 51–60. http://dx.doi.org/10.1609/hcomp.v5i1.13319.
Повний текст джерелаАнотація:
Online peer-to-peer investment platforms are increasingly popular venues for entrepreneurs and investors to engage in financial transactions without the involvement of banks and loan managers. Despite their purported transparency and lack of bias, it is unclear whether social inequalities present in traditional capital markets transfer to these platforms as well, impeding their hoped revolutionary potential. In this paper we analyze nearly four years' worth of data from one of the leading UK-based equity crowdfunding platforms. Specifically, we investigate gender-related differences in patterns of entrepreneurship, investment, and success. In agreement with offline trends, men have more activity on the platform. Yet, women entrepreneurs benefit of higher success rates in fund-raising, a finding that mimics trends seen on some rewards-based crowdfunding platforms. Surprisingly, we also find that female investors tend to choose campaigns that have lower success rates. Our findings contribute to a better understanding of gender-related discrepancies in success on the online capital market and point to differences in activity that are key factors in the apparent patterns of gender inequality.
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Malaga, Ross, Stanislav Mamonov, and Janet Rosenblum. "Gender difference in equity crowdfunding: an exploratory analysis." International Journal of Gender and Entrepreneurship 10, no. 4 (November 19, 2018): 332–43. http://dx.doi.org/10.1108/ijge-03-2018-0020.
Повний текст джерелаАнотація:
Purpose Title II of the Jumpstart Our Business Startups Act aims to make it easier for new ventures to raise funds from accredited investors via equity crowdfunding. The purpose of this paper is to understand whether Title II equity crowdfunding represents an opportunity for women-owned companies (those that have one or more female owners/founders) to raise capital at rates similar to companies owned by men. Design/methodology/approach The authors conduct an exploratory analysis using a data set containing 6,234 Title II equity crowdfunded offerings aggregated across 17 crowdfunding platforms between September 2013 and December 2015. Findings The authors find that women-owned companies constitute only 15.2 per cent of the ventures seeking funding in this data set; however, gender had no effect on the likelihood of successful fundraising under Title II. Originality/value This study is the first to examine the roll of gender on the success of equity crowdfunding campaigns the USA. It provides empirical evidence that crowdfunding has had limited impact on democratizing access to capital for woman-owned startups and small businesses. The data reveal that woman-owned companies are underrepresented in Title II equity crowdfunding to an even greater extent than they are underrepresented in angel and venture capital (VC) investments. The results of this study also highlight the importance of examining the role of gender in equity crowdfunding across different countries.
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Manganiello, Maria, and Irina-Virginia Dragulanescu. "Sustainable Equity Crowdfunding Projects: Are They A Driving Force to Revitalise Italy After Global Socio-Economic Consequences of The COVID-19?" SHS Web of Conferences 92 (2021): 01030. http://dx.doi.org/10.1051/shsconf/20219201030.
Повний текст джерелаАнотація:
Research background: The outbreak of COVID-19 has disrupted and shaken all economic and financial sectors. In this scenario, crowdfunding has emerged as a new relevant financing mechanism alongside more traditional funding channels by attracting investors through an internet-based method of fundraising to support ventures. In recent years, many crowdfunding platforms, specialized in green projects rose, allowing start-ups to raise funds for their campaigns. The literature on the use of crowdfunding in the sustainable sector is quite limited. Purpose of the article: We use a hand-collected dataset of 350 equity crowdfunding campaigns, gathered from the Italian platforms over the period January 2016-June 2020, to analyze the impact of COVID-19 outbreak on the success of green equity crowdfunding projects. We also test the greater attractiveness of the projects sustainability-oriented than other types of campaigns and if growth in the number of “green” projects is linked to the increase of local environmental performance. Methods: We measure the probability of success of pitched projects, both in terms of the total amount raised and the number of investors. We run a negative-binomial-regression for the number of investors and a Tobit-regression for the amount of capital raised. Findings & Value added: Coherently with our hypotheses, we find that COVID-19 has reduced the probability of success and that campaigns with a sustainability orientation are more likely to reach the funding target because investors give more importance to a sustainable future. Finally, our search provides that the leading countries in environmental performance have a positive effect on the green crowdfunding projects, by aspiring to move toward a sustainable future.
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Vismara, Silvio. "Information Cascades among Investors in Equity Crowdfunding." Entrepreneurship Theory and Practice 42, no. 3 (January 23, 2018): 467–97. http://dx.doi.org/10.1111/etap.12261.
Повний текст джерелаАнотація:
Finance studies on information cascades, usually in an initial public offering setting, typically differentiate between institutional and retail investors, as this is the only information available to potential backers. Information available through equity crowdfunding platforms includes details on individual investors as they may disclose information about themselves by linking their profile to social networks or websites. Using a sample of 132 equity offerings on Crowdcube in 2014, we show that information cascades among individual investors play a crucial role in crowdfunding campaigns. Investors with a public profile increase the appeal of the offer among early investors, who in turn attract late investors.
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Fortezza, Fulvio, Alessandro Pagano, and Roberta Bocconcelli. "Serial crowdfunding in start-up development: a business network view." Journal of Business & Industrial Marketing 36, no. 13 (October 29, 2021): 250–62. http://dx.doi.org/10.1108/jbim-05-2020-0243.
Повний текст джерелаАнотація:
Purpose Even though the crowdfunding (CF) literature is rapidly reaching its maturity phase, the topic of serial CF (i.e. the participation in more than one CF campaign) is as much promising as still largely under explored. This study thus aims to offer a thorough view of the dynamic and complex processes characterizing the participation of the start-ups to more than one campaign adopting a business network perspective. Design/methodology/approach In line with an explorative research aim, a multiple case study analysis is performed by taking into consideration four start-ups engaged in more than one CF campaigns with different combinations of equity and non-equity CF, adopting the actor–resource–activity (ARA) model as theoretical framework. Findings Multiple CF campaigns are embedded in the overall changing startup’s network and are affected by the concurrent and overlapping startup’s development processes. From this standpoint, the adoption of the ARA model suggests to reconsider the “serial” dimension of multiple CF campaigns. These processes can be more or less “linear” as they could be affected by the combination of CF schemes and by the degree of alignment of actors, activities and resources, whose “assembly” can be facilitated by learning processes and impaired by unexpected circumstances. Originality/value This paper explores in depth the startup’s serial CF journey, building on recent studies calling for stronger analyses of the directions and outcomes of innovative funding trajectories pursued and implemented by new business ventures. From this standpoint, to the best of the authors’ knowledge, this is the first study to consider a complete spectrum of combinations between CF schemes within serial CF, thus allowing for a better understanding of the role of such a factor within a dynamic and contextual view, that is, that offered by the business network perspective. This paper also contributes to the Industrial Marketing and Purchasing research on start-ups.
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Motylska-Kuzma, Anna. "Crowdfunding and Sustainable Development." Sustainability 10, no. 12 (December 6, 2018): 4650. http://dx.doi.org/10.3390/su10124650.
Повний текст джерелаАнотація:
The aim of this article is to verify the hypothesis that crowdfunding campaigns with sustainable orientations are significantly more likely to convince investors and successfully raise funds. The research covered 50 successful crowdfunding projects’ reward and equity-based models, which were pledged on Polish platforms, and analyzed the context of the campaigns. Basic statistical non-parametric tests were used to analyze the data. The study shows that although there were big differences in the amount of raised funds and achieved success rates, the sustainable orientation of the project itself was not so important. It is worth noticing that the level of realization of the objectives of sustainable development was really low, and was not highlighted in the description. This paper explores the relevant success factors of crowdfunding projects, which is very important in order to prepare new ideas for financing and attract the crowd as an investor.
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Fujii, Masatoshi, Chie Hosomi, and Yoshiaki Nose. "Equity crowdfunding and financial literacy of individual investors in Japan." Journal of Capital Markets Studies 5, no. 1 (July 27, 2021): 5–27. http://dx.doi.org/10.1108/jcms-03-2021-0007.
Повний текст джерелаАнотація:
PurposeThis study aims to fill the gap in previous research that focuses on the superficial aspects of equity crowdfunding (ECF) campaigns and financial practices by examining financial literacy aspects, such as due diligence and valuation, in terms of factors that influence Japanese individual investors' investments in ECF.Design/methodology/approachThe status of information disclosure in ECF campaigns is checked. In addition, the feasibility of the initial due diligence and valuation using this information is verified. Specifically, the lack of financial literacy hypothesis is developed and (1) expected market capitalization in the final fiscal year of the business plan and (2) expected returns on investment (IRR: internal rate of return) are estimated.FindingsECF campaigns in Japan disclose information equivalent to that obtained by professional venture capitalists. Analysis of the disclosed business plan allows for initial due diligence and valuation. By contrast, due diligence reveals that some projects are unlikely to be listed even if their business plans are met, and others have low IRRs. In addition, a stock acquisition rights project, in which even professional investors are unable to calculate IRRs, is completed at the same rate as a common stock project; this suggests that individual investors lack financial literacy.Originality/valueAnalyzing ECF from financial literacy aspects, such as due diligence and valuation, is unique. Such aspects are essential for private equity investments but have not been addressed in previous studies.
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Wald, Andreas, Merete Holmesland, and Kalanit Efrat. "It Is Not All About Money: Obtaining Additional Benefits Through Equity Crowdfunding." Journal of Entrepreneurship 28, no. 2 (July 2, 2019): 270–94. http://dx.doi.org/10.1177/0971355719851899.
Повний текст джерелаАнотація:
Equity crowdfunding allows entrepreneurs to directly access financing from a large number of investors via Internet platforms. Recent research has started to examine additional, non-financial benefits of crowdfunding campaigns. This article connects to this emerging research stream by investigating these additional benefits while discussing their potential to contribute to the success of equity crowdfunding projects. Building on interviews with entrepreneurs and investors from Norway and Israel, we find that the benefits offered by investors to entrepreneurs can be divided into two categories: inward benefits and outward benefits. The latter are aimed at increasing public exposure and advancing the project’s success by recruiting additional investors. By contrast, inward benefits are implemented through investors’ contributions of personal experience and expertise. These benefits are aimed at the entrepreneurs and, when harnessed, can become resources that advance future success. We also find that investors receive personal gain by participating in crowdfunding, which takes the form of personal growth and the development of social capital. These benefits are based on intrinsic motives and complement the financial returns, which are more related to extrinsic motives.
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Shneor, Rotem, and Amy Ann Vik. "Crowdfunding success: a systematic literature review 2010–2017." Baltic Journal of Management 15, no. 2 (April 6, 2020): 149–82. http://dx.doi.org/10.1108/bjm-04-2019-0148.
Повний текст джерелаАнотація:
PurposeThe paper takes stock of accumulated knowledge on factors impacting the success of online crowdfunding (CF) campaigns while suggesting opportunities for future research development.Design/methodology/approachA Systematic Literature Review of 88 academic papers published between 2010 and 2017. Papers were collected from four academic databases and published in 65 different journals. The review addresses issues related to theory, methods, context, findings and gaps. Overall, the paper presents an analysis of 1,718 associations between 111 aggregated independent variables (from 927 variables) with six main aggregated success indicators.FindingsMost research involves quantitative analyses of public data collected from reward-CF platforms. More research is required in equity, lending, donation and other CF contexts. Existing studies are mostly anchored in theories of signaling, social capital and elaboration likelihood. There is a need for wider conceptualization of success beyond financial indicators. And based on aggregated summaries of effects, the paper suggests a series of CF success models, while outlining an agenda for future research.Research limitations/implicationsStudied phenomenon is in its early days of existence, and hence biased by the circumstances of a new industry. Moreover, the current review only covers published journal articles in English.Practical implicationsFindings of factors impacting campaign success can inform fundraisers in building campaigns, as well as platforms in adjusting systems and services toward responsibly enhancing campaign success. Moreover, identified gaps can inform on what has not been sufficiently documented and may be a source of competitive advantage.Originality/valueA comprehensive review of research on CF success factors at factor level, a coherent agenda for future research development and a series of evidence-based models on most prevalent factors impacting CF success by CF model.
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Son Turan, Semen. "Uncovering trust signals in equity crowdfunding: A systematic literature review." International Journal of Research in Business and Social Science (2147- 4478) 10, no. 4 (June 14, 2021): 215–25. http://dx.doi.org/10.20525/ijrbs.v10i4.1187.
Повний текст джерелаАнотація:
The purpose of this exploratory study has been to provide insight into the success factors of ECF campaigns and, in particular, explore the role of trust. In specific, the research questions for this study are: (1) What dimensions of ECF success have been studied so far, and (2) is there any established literature on sustainability, blockchain technology and trust in the realm of ECF. To that end, a systematic literature review is conducted by investigating ISI Web of Science and Scopus, two major academic databases, through relevant keyword combinations. The theoretical framework relies on signaling, legitimacy and stakeholder theories. Findings indicate that the role of trust is an emerging theme, and sustainability and BT in relation to trust, to the best of the author’s knowledge, is not yet focused upon in crowdfunding research. This study contributes to the literature of crowdfunding and entrepreneurship.
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Na, Hyunho, and Shin Cho. "An Empirical Analysis on the Success Factors of Equity Crowdfunding Campaigns in Korea." Innovation studies 14, no. 1 (February 28, 2019): 209–42. http://dx.doi.org/10.46251/innos.2019.02.14.1.209.
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Coutrot, Isabel Pifarré, Richard Smith, and Laura Cornelsen. "Is the rise of crowdfunding for medical expenses in the United Kingdom symptomatic of systemic gaps in health and social care?" Journal of Health Services Research & Policy 25, no. 3 (January 28, 2020): 181–86. http://dx.doi.org/10.1177/1355819619897949.
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Crowdfunding for medical care is a new phenomenon but increasingly used by individuals to seek financial help to cover the costs of health care. Ethical concerns have been raised about medical crowdfunding, including implications for equity, resource allocation, medical decision-making, the promotion of non-evidence based therapies, platforms’ lack of transparency and corporate interests. Medical crowdfunding efforts may point to shortcomings in health service provision, but they tend to have wider motivations and implications. However, there is no firm evidence base for establishing answers to even the most basic questions, such as who is seeking funds, for what, where and why. In this Essay, we provide an introduction to medical crowdfunding in the United Kingdom (UK). We synthesize what is currently known and the insights that might be gained from an exploratory review of 400 medical crowdfunding campaigns on the GoFundMe UK website: for instance, whether medical crowdfunding occurs in response to gaps in service provision, supports ‘queue jumping’ and how it relates to ‘medical tourism’. We conclude with a call for research on medical crowdfunding in the UK (and elsewhere) as a means to better understand patients’ perceived or actual unmet need for health and social care and inform policy development.
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Di Pietro, Francesca, Andrea Prencipe, and Ann Majchrzak. "Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups." California Management Review 60, no. 2 (November 2, 2017): 43–70. http://dx.doi.org/10.1177/0008125617738260.
Повний текст джерелаАнотація:
Collaborating with investor networks generated in the course of equity-based crowdfunding campaigns can contribute to the success of startup firms. Through a qualitative study of 60 European startups, this article identifies the type of inputs provided by equity investors, how these inputs are related to startups’ and founders’ characteristics, and startups’ later performance. Startups exploiting crowd network are more likely to be successful two years later compared with startups that do not exploit the crowd, or acquire from the crowd product, strategy, or market knowledge. The findings extend existing research on the relationships between open innovation and startups by identifying the inputs provided by the crowd and how the use of crowd equity investors in open innovation platforms is related to later success.
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Furnari, S. L. "Trough Equity Crowdfunding Evolution and Involution: Initial Coin Offering and Initial Exchange Offering." Lex Russica, no. 1 (January 19, 2021): 101–17. http://dx.doi.org/10.17803/1729-5920.2021.170.1.101-117.
Повний текст джерелаАнотація:
This article analyzes two of the last innovative financing instruments of the crowdfunding family: Initial Coin Offering (ICO) and Initial Exchange Offering (IEO). Having both a potential financial nature, they will be addressed as «sons» of Equity-based Crowdfunding (EBCF). The main scope of this paper is to show opportunities and dangers of ICO and IEO through a comparison with EBCF. Indeed, at the end of the analysis it will be possible to understand if ICO and IEO can be considered as positive evolution of EBCF or — at least one of them — can be considered so dangerous to appear as a sort of «involution».In order to answer our question, the discussion firstly focuses on EBCF, the innovative financing instrument being one of the most important figures of the «crowdfunding family». Its importance lies in its financial nature that makes this instrument different from the other models (meaning the donation, reward and lending). Participating in an EBCF-campaign, indeed, lets participants become shareholders of the company they are giving money to. So, the main pros and cons of the participation in an EBCF campaign will be disclosed. In particular, granting easier access to capitals together with the possibility to benefit from the so-called «wisdom of the crowd» allowed EBCF to become one of the most innovative financing tools of our age. However, these advantages need to be mitigated with the main risks occurring during a crowdfunding campaign. These are: moral hazard and frauds, arbitrary exclusion during pre-emptive screening by platform and, last but not least, illiquidity.Therefore, the discussion moves to the technological advanced new entry of the crowdfunding family, meaning ICO and IEO. In order to understand why ICO and IEO are so similar to EBCF, both the main characteristic of these instruments will be described. With reference to ICO, first of all this article provides a brief description of the technology that makes this innovative financing tool the advanced «son» of EBCF. Indeed, through the launch of an ICO, a company asks the crowd a precise amount of money in exchange of a «token»: an informatic instrument through which the participant may exercise also some financial rights towards the company. From this point of view, an ICO-campaign is very similar to an EBCF one, lying the main difference in the technological solutions used, the queen on those is blockchain. Furthermore, ICO characteristic will be outlined in order to disclose its functioning — meaning the relation with blockchain and smart contracts — and the different models of tokens.After that, also IEO will be described. IEO could be considered one of the last variants of ICO. The main difference, indeed, lies in the fact that IEO campaigns are not conducted in the website owned by the company but in a specific platform, that is a crypto-asset exchange.The exam of ICO and IEO potentialities (i.e. programmability, disintermediation and tokenization) will highlight how ICO and IEO may solve most of the mentioned EBCF cons. This will lead to the potential consideration of ICO and IEO as evolution of EBCF. However, also ICO and IEO cons will be highlighted (meaning lack of transparency, not clear regulatory regime and, for IEO in particular, dangerous proximity with investors and potential conflict of interest). From the comparison between ICO and IEO pros and cons it will be possible to discuss on if we are really in front of two evolution of EBCF or nearer to an «involution» of this instrument, considering regulatory solutions in order to avoid this second scenario.
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Creek, Steven, Thomas Houston Allison, Arvin Sahaym, Keith Hmieleski, and Joshua Maurer. "The Dark Triad and Entrepreneurial Crowdfunding: A Comparison of Rewards-Based vs Equity Campaigns." Academy of Management Proceedings 2019, no. 1 (August 1, 2019): 15932. http://dx.doi.org/10.5465/ambpp.2019.15932abstract.
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Nguyen, Thang, Joe Cox, and Judy Rich. "Invest or regret? An empirical investigation into funding dynamics during the final days of equity crowdfunding campaigns." Journal of Corporate Finance 58 (October 2019): 784–803. http://dx.doi.org/10.1016/j.jcorpfin.2019.07.011.
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Johnson, Christopher. "Audience Participation: Crowdfunding Large Scale Theatrical Productions Through Regulation A+." Michigan Business & Entrepreneurial Law Review, no. 6.1 (2016): 61. http://dx.doi.org/10.36639/mbelr.6.1.audience.
Повний текст джерелаАнотація:
Theatrical financing has been conducted in much the same way for the better part of a century. This method, however, has consistently provided only the shows with access to the deepest of pockets a path to Broadway. The advent of Internet-based crowdfunding provides producers access to a potential source of capital that was previously unavailable. Prior to the promulgation of the SEC regulations regarding Title IV of the JOBS Act, this capital could only be accessed through donation or reward based financing campaigns, but with the introduction of Regulation A+, there is finally a practical method for the widespread solicitation of investors for theatrical productions. This comment explores the realities of theatrical financing as well as the associated regulations regarding the sale of these sorts of securities. Part I will describe the background of theatrical financing and the governing regulations, and will highlight the restrictions faced by theatrical producers under the current framework. Part II will set forth the specifics of Regulation A+ and asserts that this framework for equity crowdfunding is particularly well suited to the unique aspects of theatrical financing. Part III will address potential shortcomings and objections to this assertion.
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Xiao, Li. "How lead investors build trust in the specific context of a campaign." International Journal of Entrepreneurial Behavior & Research 26, no. 2 (December 6, 2019): 203–23. http://dx.doi.org/10.1108/ijebr-05-2019-0265.
Повний текст джерелаАнотація:
Purpose The purpose of this paper is to explore the role of trust in the unobservable decision-making process of lead investors and follow-on investors in the specific context of equity crowdfunding (ECF) campaigns. Design/methodology/approach This work employs a case study approach. The author conducts a three-year inductive field study of Chinese ECF – AngelCrunch. The author gathered both campaign and platform-level data from the selected case covering a period of seven years from 2011 to 2018. The data set used for this study includes the characteristics of 189 online campaigns, 25 face-to-face interviews with the platform managers, early-stage investors and entrepreneurs, first-hand observations and quarterly reports on online campaigns supplemented with informal interviews with the authors for the reports. Findings The findings from this study provide early insights onto the unobservable decision-making process of ECF investors. It demonstrates that lead investors use both selective signalling information and physical interactions with the entrepreneurs to build competence and relational trust on which they rely for making an early pledge. It also shows that follow-on investors differ from lead investors in the process of building trust for decision-making. Furthermore, this work uncovers the role of ECF platforms in facilitating the process of building interpersonal trust for the decision making, with challenges to maintain the notion of platforms in raising a small amount of capital from a large crowd. Research limitations/implications This study is constrained by the limited scale of qualitative elements available. The findings of the study have implications for platform managers, investors and policy makers. Originality/value Building on entrepreneurial finance and trust theory, this work demonstrates how lead investors build competence and relational trust on which they rely to make an early pledge in the context of ECF. The perception of a lead investor and the commitment together with the selective and formative information by the entrepreneur/s are key in follow-on investors’ decision making. This study uncovers that crowdfunding enables additional and valuable information to be assessed by crowd investors to manage extreme risk and uncertainty occurred in early-stage investments. This work also demonstrates that virtual world has its limitations to build interpersonal trust for managing extreme risk.
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Emil Robert Kaburuan, Fauzan Nasafi,. "Analysis of Factors Affecting the Decision of the JABODETABEK Community in Using Equity Crowdfunding Platform." Turkish Journal of Computer and Mathematics Education (TURCOMAT) 12, no. 6 (April 5, 2021): 2297–305. http://dx.doi.org/10.17762/turcomat.v12i6.4836.
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This research analyzes the factors that influence the decision to use the equity funding platform in Indonesia. Equity crowdfunding platform is a platform that organizes the crowdfunding process, where investors will receive an equity instrument that provides a share of ownership or a share of future income. This research model is compiled based on the merging of previous research models related to the intention to use the equity funding platform, such as Financing Objectives, Number of Shares Assigned, Number of Inquiries, Familiarity with the Company or Its Product, Target Attractiveness and Campaign Specification. Sources of data were collected from respondents using the equity crowdfunding platform who are JABODETABEK people through a questionnaire, and obtained 428 respondents. The data were analyzed using the SmartPLS 3, and the results show that the variable Familiarity with the Company or Its Product and Target Attractiveness affects people's decisions in using the equity crowdfunding platform.
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Niemand, Thomas, Martin Angerer, Ferdinand Thies, Sascha Kraus, and René Hebenstreit. "Equity crowdfunding across borders: a conjoint experiment." International Journal of Entrepreneurial Behavior & Research 24, no. 4 (June 11, 2018): 911–32. http://dx.doi.org/10.1108/ijebr-07-2017-0256.
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Purpose The purpose of this paper is to identify and disentangle the home bias in equity crowdfunding to better understand irrational decision making of investors. Design/methodology/approach A first choice-based conjoint (CBC) experiment with 217 participants was conducted in central Europe in order to single out different factors contributing to an apparent home bias of capital providers. Findings The authors find that investors show an avoidance of foreign currency, while payment methods seem to have no considerable influence on the decision making. Furthermore, participants significantly decided against national legislation in favor for EU legislation. Research limitations/implications This study predominantly helps to gain deeper insights into influencing factors in crowdfunding markets with a special concern on a cross-border context. For capital-seeking companies, the home bias of potential investor has to be taken into account, when designing a crowdfunding campaign. For legislators, the apparent influence of the legal framework should serve as a wake-up call to consolidate the regulation of crowdfunding in the EU. Originality/value This is the first CBC experiment application in a cross-border crowdfunding context. It provides deeper understanding of the importance of geographical proximity between crowdfunding projects and investors and calls for further research to examine how such an effect could be diminished.
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Walther, Martin, and Marco Bade. "Observational learning and willingness to pay in equity crowdfunding." Business Research 13, no. 2 (January 7, 2020): 639–61. http://dx.doi.org/10.1007/s40685-019-00107-8.
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AbstractThis study examines interdependencies between investments of equity crowdfunders. Based on hand-collected data from a well-established equity-crowdfunding platform, we find strong indication that investors observe previous investments to determine their willingness to pay for equity shares. Furthermore, the investment behavior of predecessors may lead investors to deviate from average investment behavior. In particular, investors are willing to pay more than the average investment, when the focal campaign is hot or there have been many large investments in the campaign. Remarkably, a high number of all previous investments over the entire period of the campaign as well as co-financing by presumably sophisticated investors negatively influence willingness to pay. This suggests that crowd investors are subject to partial crowding-out. These findings are different on the platform level, which suggests that investors’ behavior is rather information than sentiment-driven.
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Troise, Ciro, Mario Tani, and Ornella Papaluca. "Equity and Reward Crowdfunding: A Multiple Signal Analysis." International Journal of Economics and Finance 12, no. 3 (February 18, 2020): 30. http://dx.doi.org/10.5539/ijef.v12n3p30.
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This paper aims to analyse the success signals of initiatives through equity and reward crowdfunding, the two typologies most used by start-ups and SMEs. This article discusses and compares these two models, highlighting the main differences and similarities, by analyzing the factors that influence the success of initiatives through crowdfunding, measured both in terms of amount of funding raised and number of investors that funded the initiatives. The focus is on three sets of signals, venture quality (human capital, information about the establishment and the status of the initiatives), the level of information the company provides to reduce the degree of uncertainty and campaign quality. Using two distinct datasets, one of 235 equity-model initiatives and one of 274 reward-model initiatives, in both cases analyzing projects that have reached (or exceeded) the funding goal, it turns out that venture quality affects in both types, though distinctly, in particular in the reward model play an important role the awards, in addition to the rounds and the tutors (the latter two also present in the equity model), which constitute the status information of the company, while the information about the establishment and the human capital affects only the equity model. Equally for the equity model affects the level of information to reduce uncertainty, while campaign quality in both types seems to have a very slight impact.
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Block, Jörn, Lars Hornuf, and Alexandra Moritz. "Which updates during an equity crowdfunding campaign increase crowd participation?" Small Business Economics 50, no. 1 (May 24, 2017): 3–27. http://dx.doi.org/10.1007/s11187-017-9876-4.
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Troise, Ciro, Diego Matricano, Elena Candelo, and Mario Sorrentino. "Crowdfunded and then? The role of intellectual capital in the growth of equity-crowdfunded companies." Measuring Business Excellence 24, no. 4 (May 29, 2020): 475–94. http://dx.doi.org/10.1108/mbe-02-2020-0031.
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Purpose This paper aims to investigate whether and to what extent equity crowdfunding (ECF) is able to build enduring businesses. This research explores the post-campaign growth of equity-crowdfunded companies and analyses the impact of intellectual capital (IC) on their growth. To achieve the above aim, we provide a theoretical framework that includes the three well-known dimensions of IC – i.e. human, structural and relational capital – as independent variables and company growth, meant as sales and employment growth, as dependent variable. Design/methodology/approach This research uses a quantitative methodology based on two regression analyses. The authors use hand-collected data on 51 successful equity-crowdfunded projects listed on seven Italian platforms. Findings The authors find that three variables, namely prior industry experience (human-capital), product innovation (structural-capital) and equity offered (relational-capital) are significant and positively related to the growth of equity-crowdfunded companies. In particular, prior industry experience positively influences sales growth; product innovation positively influences employment growth. Equity offered, instead, has a strong positive impact on both sales and employment growth. Companies that offer a larger percentage of equity during the campaign disclose higher probabilities of growth. Practical implications The study has useful implications for several stakeholders, in particular, founders, platform managers, crowdfunders, policy makers and authorities. Originality/value The results shed some light on the nascent research field related to post-campaign scenarios of equity-crowdfunded companies. This paper is the first to explore the impact of IC on the growth of companies funded through ECF.
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VENTURELLI, VALERIA, BERNARDO BALBONI, ULPIANA KOCOLLARI, and ALESSIA PEDRAZZOLI. "HOW CROWDED IS EQUITY CROWDFUNDING? THE EFFECT OF SOCIAL CAPITAL ON THE SIZE OF THE CROWD IN EQUITY CAMPAIGN." BANKPEDIA REVIEW 7, no. 1-2 (December 2017): 23. http://dx.doi.org/10.14612/venturelli_balboni_kocollari_pedrazzoli_1-2_2017.
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VENTURELLI, VALERIA, BERNARDO BALBONI, ULPIANA KOCOLLARI, ALESSIA PEDRAZZOLI, and ELISABETTA GUALANDRI. "HOW CROWDED IS EQUITY CROWDFUNDING? THE EFFECT OF SOCIAL CAPITAL ON THE SIZE OF THE CROWD IN EQUITY CAMPAIGN." BANKPEDIA REVIEW 7, no. 1-2 (December 2017): 23. http://dx.doi.org/10.14612/venturelli_balboni_kocollari_pedrazzoli_gualandri_1-2_2017.
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Bernardino, Susana, and J. Freitas Santos. "Crowdfunding: An Exploratory Study on Knowledge, Benefits and Barriers Perceived by Young Potential Entrepreneurs." Journal of Risk and Financial Management 13, no. 4 (April 22, 2020): 81. http://dx.doi.org/10.3390/jrfm13040081.
Повний текст джерелаАнотація:
Crowdfunding (CF) has experienced impressive growth in recent years with the development of internet and information technologies that increased the participation of the “crowd” to fund entrepreneurial projects. Young entrepreneurs, especially well-qualified students, have recently begun to play a new role in the economy by launching new ventures in niche markets. The aim of the present paper is to provide a deeper understanding of CF among Portuguese young potential entrepreneurs as an alternative funding mechanism, by discussing its main characteristics and the perceived benefits and barriers that might drive young entrepreneurs to post a project on a CF platform or discourage its use. Through an online survey, we query well-qualified students about the knowledge they have about crowdfunding and benefits and barriers that can increase or reduce the possibility of funding to launch a new venture. The results show that potential young entrepreneurs have moderate knowledge about CF. Consequently, they are not able to explore all the business models available, specifically the models related to investment (lending and equity). The respondents perceive several benefits of the use of CF that go beyond the financial advantages, such as the communication of the project to a wider audience and the additional feedback from potential customers. The perceived barriers that could deter the use of CF are related to the implementation of the CF campaign, although contextual constraints have been mentioned.
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Ndou, Valentina, Paola Scorrano, Gioconda Mele, and Pasquale Stefanizzi. "Fundraising activities and digitalization: defining risk indicators for evaluating equity crowdfunding campaigns." Meditari Accountancy Research ahead-of-print, ahead-of-print (September 10, 2021). http://dx.doi.org/10.1108/medar-03-2021-1237.
Повний текст джерелаАнотація:
Purpose The wide development of digital platforms permitted the birth of new financing modalities, namely, crowdfunding, where the crowd of individuals and investors can supply the necessary financial resources for venture creation and growth. While the extant literature has focused on analyzing the dynamics and features of crowdfunding campaigns, few studies have focused on understanding how crowd investors decide which ventures to invest in and which factors influence their decision-making process. Due to this gap, the purpose of this paper is to analyze the factors influencing the choice to invest in an equity crowdfunding campaign, by defining a set of indicators useful to evaluate the risk of the campaign. Design/methodology/approach An empirical research study of Italian equity crowdfunding campaigns has been conducted to identify quantitative indicators useful for evaluating the risk in a crowdfunding campaign. Findings Findings demonstrate that the risk indicators proposed to represent important gauges that investors can usefully consider ex ante to assess the degree of riskiness of the investment in the equity crowdfunding campaign. Research limitations/implications The limitations of the study regarding the size of the sample that is small due to the necessity to extract enough information in pre and post-equity campaigns. Also, the lack of historical data is another limitation. Originality/value The originality of the studies relies on the proposal of quantitative indicators for the evaluation of the risk in equity crowdfunding campaigns for “crowd” investors to reduce information asymmetries.
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Wasiuzzaman, Shaista, and Nur Firzanah Suhili. "Examination of the success drivers of equity crowdfunding campaigns in Malaysia." Journal of Entrepreneurship in Emerging Economies, November 30, 2021. http://dx.doi.org/10.1108/jeee-04-2021-0134.
Повний текст джерелаАнотація:
Purpose This study aims to investigate the drivers of successful equity crowdfunding campaigns in Malaysia. Design/methodology/approach Data for this study are collected manually from 5 different equity crowdfunding platforms in Malaysia. A total of 101 campaigns are analyzed, out of which the final sample used for this study is 97. The relationships are analyzed via ordinary least squares multiple regression analysis. Findings The results of the analysis show that minimum funding target, minimum investment required, pre-money valuation and length of pitch video are highly significant in influencing the success of the campaign. Percentage of equity retained is only significant at the 10% level. The size of the project team and the text length of the pitch are found to be insignificant. In addition, all the variables, except for equity retained and the minimum investment required, are found to have a positive impact on the success of an equity crowdfunding campaign in Malaysia. Originality/value To the best of the authors’ knowledge, this is the first study that investigates the success factors of equity crowdfunding campaigns in a developing country such as Malaysia. In addition, this study contributes to the literature on equity crowdfunding success via the inclusion of less-studied variables such as pre-money valuation and minimum investment required.
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Cicchiello, Antonella Francesca, Amirreza Kazemikhasragh, and Stefano Monferra. "In women, we trust! Exploring the sea change in investors’ perceptions in equity crowdfunding." Gender in Management: An International Journal ahead-of-print, ahead-of-print (July 5, 2021). http://dx.doi.org/10.1108/gm-10-2020-0309.
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Purpose Women’s entrepreneurial activity can significantly impact economic and social development globally, particularly in developing countries. The significant challenges entrepreneurial women face draw the attention of researchers and policymakers. This paper aims to analyse the impact of gender disparity on the likelihood of obtaining equity financing through crowdfunding. The equity crowdfunding industry was selected because it is a non-traditional financial market where gender bias may act differently for women. Design/methodology/approach To investigate the relationship between gender and equity financing through crowdfunding, this paper applies ordinary least squares regression. The analysis is based on a unique data set of 492 equity crowdfunding campaigns launched between 2013 and 2017 on all existing platforms in Brazil, Chile and Mexico. Findings The analysis reveals that the involvement of at least one woman on the board of firms seeking equity financing increases campaign success rates in terms of the investors’ average pledge, the target amount reached at the end of the campaign and the percentage raised at the end of the campaign exceeding the initial fundraising goal. Altogether, this suggests that equity crowdfunding campaigns should be based on gender equality in the firms’ boards. The research finds evidence that there is no gender disparity in the likelihood of a campaign being financed by a greater number of investors. Practical implications These findings have implications for Latin American female entrepreneurs when selecting funding sources and policymakers when defining political actions to remove the barriers at the root of this historic inequality in female entrepreneurs’ access to finance. Originality/value To the best of the authors’ knowledge, this document analyses the gender disparity in the Latin American equity crowdfunding market, shedding light on women’s access to crowdfunding financing for the first time.
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Vrontis, Demetris, Michael Christofi, Enrico Battisti, and Elvira Anna Graziano. "Intellectual capital, knowledge sharing and equity crowdfunding." Journal of Intellectual Capital ahead-of-print, ahead-of-print (June 16, 2020). http://dx.doi.org/10.1108/jic-11-2019-0258.
Повний текст джерелаАнотація:
PurposeThis paper explores knowledge sharing (KS) and intellectual capital (IC) impacts on the success rate of equity crowdfunding (EC) campaigns in the Italian market, which represents a new model for financing entrepreneurial initiatives.Design/methodology/approachThe relation between KS, IC and the success rate of EC campaigns is analysed with a panel regression that measures IC through the value added intellectual coefficient. Social network analysis is used to measure KS in the users' network on Twitter for EC campaigning. Specifically, the authors consider the information users exchange on social networks as a proxy of KS and identify the hubs influencing information dissemination, the size and strength of networks for each EC campaign. Finally, the success rate of EC campaigns is a ratio of the number of positive campaigns to the total number of campaigns for each platform.FindingsThe success rate of EC campaigns is positively related to IC and significantly and positively related to the number of connections the EC platforms have.Practical implicationsThe positive relationship between the hub role of social network platforms and the success of EC campaigns provides an important signal to crowdfunding operators. As more potential investors focus on an EC campaign, a bandwagon effect could involve uninformed investors. This result is crucial in order to better understand how social media activity affects crowdfunding success.Originality/valueAlthough the literature has examined the impact of KS on general firm performance and the mediating role of intellectual capital, no prior studies have examined the impacts of KS and IC on the success rate of EC campaigns in a specific market.
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Prokop, Jörg, and Dandan Wang. "Is there a gender gap in equity-based crowdfunding?" Small Business Economics, November 19, 2021. http://dx.doi.org/10.1007/s11187-021-00574-6.
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AbstractCompared to their male peers, female entrepreneurs tend to face greater obstacles in raising venture funding from business angels, venture capitalists, and financial institutions. In this paper, we investigate whether this gender gap also exists in equity crowdfunding. Based on data from the German equity crowdfunding market, we find that ventures with and without female managing directors are equally successful in raising capital when launching their first equity crowdfunding campaign. In contrast, the former are significantly less successful than their peers in seasoned equity crowdfunding campaigns, and this disparity cannot be fully explained by differences in other venture-related or entrepreneur-related characteristics. However, we also find that the gender gap in seasoned offerings narrows if female entrepreneurs set more ambitious funding thresholds. Overall, our results indicate that pitching their equity crowdfunding campaigns in a more promotion-oriented way is a sensible strategy for female entrepreneurs to improve funding success.
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Gigante, Gimede, and Giacomo Cozzio. "Equity crowdfunding: an empirical investigation of success factors in real estate crowdfunding." Journal of Property Investment & Finance, October 21, 2021. http://dx.doi.org/10.1108/jpif-06-2021-0055.
Повний текст джерелаАнотація:
Purpose This study analyses the success factors of crowdfunding campaigns in the real estate sector. Design/methodology/approach The success factors of general crowdfunding campaigns were identified then adapted to real estate and tested through multiple statistical analyses (T-tests, correlation matrices, variance inflation factor (VIF) and linear regression). Findings The findings shows that crowdfunding use in the real estate sector is evolving and that crowdfunding is a potentially disruptive tool in this sector. They also demonstrate that project duration and expected return on investment (ROI) play key roles in campaign success. Research limitations/implications Results are based on the Italian context only. Extending the analysis to other markets represents a fruitful starting point for further analysis. Practical implications The outcomes of the paper might be useful both for perspective entrepreneurs, who are considering crowdfunding to finance their projects, and for platforms in order to shape systems and services towards enhancing campaign success. Originality/value Although there are existing studies on crowdfunding success factors and applications of crowdfunding as a tool, no previous study specifically investigates the use of crowdfunding in Italian real estate by analysing success factors.
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Valenza, Giuseppe, Marco Balzano, Mario Tani, and Andrea Caputo. "The role of equity crowdfunding campaigns in shaping firm innovativeness: evidence from Italy." European Journal of Innovation Management, January 11, 2023. http://dx.doi.org/10.1108/ejim-04-2022-0212.
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PurposeThis paper aims to contribute to the scientific debate concerning the impact of equity crowdfunding on the performance of crowdfunded firms after campaigning. To this aim, the purpose of this paper is to investigate the relationship between the characteristics of the campaign and the subsequent firm innovativeness.Design/methodology/approachThis study adopts a quantitative research approach to evaluate if the entrepreneurial choices affecting the characteristics of the equity crowdfunding campaigns have an impact on the post-campaign firm innovativeness.FindingsThe results of the models show that the campaign characteristics have a direct impact on the firm innovativeness, both in terms of offering and communication and the campaign performance.Originality/valueThis paper presents one of the first studies to investigate the relationship between the choice of campaign characteristics and the post-campaign firm innovativeness. As such, the study contributes to both the literature concerning start-up innovation and the literature about the impact of equity crowdfunding.
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D’Agostino, Lorena M., Alireza Ilbeigi, and Salvatore Torrisi. "The role of human capital in Italian equity crowdfunding campaigns." International Journal of Entrepreneurship and Innovation, April 18, 2022, 146575032210944. http://dx.doi.org/10.1177/14657503221094444.
Повний текст джерелаАнотація:
Crowdfunding has become an established means for new ventures in search for funding and it has received increased attention from scholars and policy makers. One of the most relevant aspects of crowdfunding is to understand the factors associated with the success of a campaign. This paper addresses the issue with a novel dataset of 89 Italian campaigns. Three indicators of campaign success (funds received, funds as a share of target, and number of investors) are estimated as a function of different dimensions of human capital (team size, education, and work experience). We find that campaign success is correlated to team size, the share of members with very high education (i.e. PhD), and the share of members with business education. We also find a non-linear relation with team size, and a significant relationship with the diversification of the team's education. Our study contributes to a recent body of empirical studies on the determinants of the success of an equity crowdfunding campaign by confirming previous findings with a novel dataset and by providing new evidence on the relevance of signals of the founding team quality (e.g. diversity of education) and increasing return of funding to team size.
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Smirnova, Elena, Katarzyna Platt, Yu Lei, and Frank Sanacory. "Pleasing the crowd: the determinants of securities crowdfunding success." Review of Behavioral Finance ahead-of-print, ahead-of-print (April 28, 2020). http://dx.doi.org/10.1108/rbf-07-2019-0096.
Повний текст джерелаАнотація:
PurposeSince May 2016, small firms have been able to issue debt and equity securities in accordance with the Securities and Exchange Commission's “Regulation Crowdfunding”. This regulation provides unsophisticated investors a chance to participate in the securities markets, and it gives small businesses an opportunity to raise funds. This paper investigates the determinants of crowdfunding success, security design in a crowdfunding setting, the amount of crowdfunding campaign proceeds and campaign duration.Design/methodology/approachThe sample used in this study is based on 750 completed securities crowdfunding offerings that were launched between May 2016 and May 2018. The data on crowdfunding issues were webscraped from Form C filings available through SEC EDGAR filing system. Additional data were hand-collected from a variety of platforms that list and aggregate crowdfunding offerings.FindingsWe show that relatively larger and more profitable companies have a better chance to achieve crowdfunding success. We find that the issuance of equity results in a lower probability of success compared to issuing debt. In addition, the issuance of equity is negatively correlated with the amount of proceeds from a crowdfunding campaign. A novel finding is that a choice of a funding instrument has a negligible impact on the amount of proceeds. This finding, combined with reduced probability of success for equity issuers, can be interpreted as a signal to rely more on debt and convertibles when designing crowdfunding campaigns.Research limitations/implicationsOrganized under “Regulation Crowdfunding,” the US securities-based crowdfunding market has been operating for several years. Relative to other securities markets it is still considered to be in its infancy. Given a relatively small data sample, the results have to be interpreted with caution.Practical implicationsThe paper shows that small businesses and unsophisticated investors can benefit from securities-based crowdfunding, which is subject to oversight of the Securities and Exchange Commission (SEC). Although the mission of the regulator is to protect investors, the SEC took on a rather relaxed approach in regulating types of instruments used in crowdfunding. Our paper shows that equities, including “Simple Agreements For Future Equity” (SAFEs) might not be the best choice for crowdfunding success. This sentiment is mirrored in law literature which considers securities known as SAFEs more suitable for venture capital campaigns rather than for crowdfunding.Originality/valueThe paper adds value to the novel field of securities-based crowdfunding by testing several hypotheses on the crowdfunding success, the amount of proceeds and campaign duration.
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Cox, Joe, Jann Tosatto, and Thang Nguyen. "For love or money? The effect of deadline proximity on completion contributions in online crowdfunding." International Journal of Entrepreneurial Behavior & Research, March 18, 2022. http://dx.doi.org/10.1108/ijebr-04-2021-0317.
Повний текст джерелаАнотація:
Purpose The authors investigate whether the individual “completion contributions” that enable online crowdfunding campaigns to meet or exceed their targets tend to be larger in relative terms when made nearer to the funding deadline. As these contributions are likely to have a disproportionate impact upon campaign outcomes, the authors assess whether the investment patterns they observe are consistent with the theory of impact philanthropy.Design/methodology/approach The authors use campaign-level data incorporating observations on campaigns from reward (both all-or-nothing, AoN and keep-it-all, KiA), donation and equity-based platforms. To the knowledge of the authors, the coverage of the data is unparalleled elsewhere in the crowdfunding literature. Using these data, the authors analyze whether completion contributions tend to vary contingent upon both the proximity of the deadline and form of crowdfunding.Findings The authors find that completion contributions tend to vary significantly and positively with proximity to funding deadlines. The authors also find that this relationship tends to be more pronounced among AoN than for KiA campaigns, as well as for donation-based platforms compared with equity-based platforms. Altogether, the patterns of behavior observed are consistent with the theory of impact philanthropy.Originality/valueThe authors help develop a better understanding of the behaviors of contributors to online crowdfunding campaigns and whether those behaviors are consistent with altruistic motivations. The findings also have considerable value in understanding the non-financial factors associated with the informal financing of business startups.
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Troise, Ciro, Diego Matricano, Elena Candelo, and Mario Sorrentino. "Entrepreneurship and fintech development: comparing reward and equity crowdfunding." Measuring Business Excellence ahead-of-print, ahead-of-print (June 10, 2021). http://dx.doi.org/10.1108/mbe-11-2020-0157.
Повний текст джерелаАнотація:
Purpose Starting from the state-of-the-art of Fintech development, this study aims to propose some research propositions comparing reward-crowdfunding (RCF) and equity-crowdfunding (ECF). In this sense, the present research provides a comprehensive analysis of fintech development and – to conceptualize the comparison between RCF and ECF – it focuses on campaigns’ characteristics, aims and post-campaigns scenarios. Design/methodology/approach All the research propositions related to the comparison between RCF and ECF are rooted in dedicated literature. The methodological approach adopted in the present paper can be referred to theorizing. Findings This study suggests that five key elements characterize the development of fintech: regulation, infrastructure, technologies, finance and innovations. The research provides nine propositions: four related to the campaigns’ characteristics; two related to the use of crowdfunding models by entrepreneurs; and three related to the performance of crowdfunded companies. Practical implications By offering nine research propositions, this study is expected to foster and support the investigation of fintech development from an entrepreneurial and managerial point of view. Originality/value To the best of authors’ knowledge, this study is among the first to explore the fintech development and to propose a comparative approach between RCF and ECF. This research contributes to the current debate on fintech development as well as on the comparison between crowdfunding models.