Search results for "Equity crowdfunding"
showing 10 items of 19 documents
It Is Not All About Money: Obtaining Additional Benefits Through Equity Crowdfunding
2019
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 adva…
Testing-the-Waters Policy With Hypothetical Investment: Evidence From Equity Crowdfunding
2020
International audience; Digitization has enabled “testing-the-waters” in entrepreneurial finance whereby investors can make nonbinding commitments in equity crowdfunding prior to an actual campaign to ascertain interest in the project. We consider whether these nonbinding equity investment commitments are informative about actual investments during the campaign and, thus, ultimate startup funding success. The data indicate that only 18% of nonbinding commitments are, in fact, invested. The evidence is consistent with hypothetical bias. Hypothetical bias is significantly less pronounced among women and among investors living in higher income areas or in areas with higher levels of education.…
Determinants of Individual Investment Decisions in Investment-Based Crowdfunding
2017
We investigate determinants of investment decisions in investment-based (equity and real estate) crowdfunding, using a novel investment-, investor- and campaign-level database. We find that this market is a man's world, with nearly 93% of investments made by men. Consistent with behavioral and finance theories, we find that women invest less in the riskiest investments but more in safer ones. Further analyses show that these findings are better explained by differences in risk aversion than differences in overconfidence between men and women. Investors located in an area considered more "sociable" (socially friendly) also invest more, but only if the investor is a woman. Overall, the findin…
The Global Alternative Finance Market Benchmarking Report
2021
For the first time, the Cambridge Centre for Alternative Finance has consolidated its annual regional reports to produce one global benchmarking report, with the intention of presenting world-wide online alternative finance data for 2018.This report presents the key findings from the CCAF annual global survey of online alternative finance. In all, 1,227 unique firms contributed to this study, providing 2,322 firm-level observations globally. Investigating in crowdfunding, P2P/marketplace lending or related capital raising activities, the study shows that 47 per cent of the firms were operating in two or more countries or jurisdictions. Highlights from the report In 2018, the global alternat…
Hypothetical Investment Bias
2018
Young, entrepreneurial firms are particularly dependent on external investors to sustain their development. Are non-binding equity investment commitments informative? Our large sample evidence in the context of equity crowdfunding shows that only 18% of non-binding commitments made by investors in entrepreneurial firms are actually invested. The evidence is consistent with hypothetical bias. Hypothetical bias is significantly less pronounced among women, and among investors with greater social capital, proxied by education and wealth. While investment intentions are only partially reliable at the individual level, the aggregate amount of collected investment intentions is a strong predictor…
Crowdfunding Prospects in New Emerging Markets: The Cases of India and Bangladesh
2020
AbstractCrowdfunding is a viable approach to financing start-ups and supporting social causes in advanced economies. The World Bank estimates a vast potential for crowdfunding also in emerging markets. The South Asia region consists of predominantly collectivist societies where helping others through donations is an integral part of prevailing religious obligations and societal norms. Thus, these countries share certain cultural and religious traits that are highly consistent with the principles of crowdfunding. In the current chapter, we explore the history, ongoing activity, and future prospects of crowdfunding in new emerging markets, specifically, India and Bangladesh. We observe that I…
L’affectif, les valeurs et le matching dans les choix des investisseurs individuels en incertitude : le cas de l’equity crowdfunding
2018
Our research focuses on the emotional and axiological determinants of investment choice in equity crowdfunding. We defend the thesis of a projects choice determined in part by the values and emotions of the individual investor. Our literature review is transversal to several fields of social sciences. Thus, the established theoretical framework articulates finance, marketing, HRM and psychology. An explanatory model using structural equations is proposed and tested empirically using data from a laboratory experiment. Our results confirm that values and interest in the project, an affective variable, have a significant effect on investor choices and dominate analytical judgment in the absenc…
The Global Status of the Crowdfunding Industry
2020
AbstractThe chapter presents key international trends relating to crowdfunding market development, and also provides insights into the current research available attempting to explain such developments. Facts and figures from leading national and regional markets are presented in a comparative manner, with specific focus on the diversity of crowdfunding models, growth trajectories, and geographical variations. The chapter shows that crowdfunding is no longer a fringe activity but gradually moving mainstream with substantial volumes recorded nationally, regionally, and globally. Furthermore, we illustrate the dominance of crowd-lending models across regions, as well as their sub-model variat…
The Role of Equity Crowdfunding Campaigns in Shaping Firm Innovativeness: Evidence from Italy
2023
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 te…
Crowdfunding in Europe: Between Fragmentation and Harmonization
2020
AbstractThe European crowdfunding market is growing rapidly, especially in continental Europe. At the same time, cross-border activities are still constrained. Fragmented markets, especially caused by differences in regulation, are an obstacle to growth of crowdfunding platforms. The European Union introduced the European Crowdfunding Service Provider (ECSP) Regime in 2019. This harmonized regime applies to crowdfunding platforms intermediating equity and debt investments between businesses and retail investors. This chapter discusses evidence on the fragmented nature of the European crowdfunding market, while presenting the ECSP directive, as a critical regulatory initiative towards harmon…