This paper o¤ers a model of crowdfunding that represents a growing area of interest among practitioners and theorists. It is one of the …rst articles analyzing the choice between the di¤erent types of crowdfunding (reward-based vs. equity-based) and the choice between crowdfunding and traditional …nancing. The model is based on standard market imperfections such as asymmetric information and moral hazard as well as on some speci…c features of crowdfunding including the market feedback regarding new projects. The model provides several implications, most of which have not yet been tested. For example, we …nd that when asymmetric information is important, high-quality projects prefer reward-based crowdfunding. The choice of an all-or-nothing mechanism as opposed to a keep-it-all can serve as a signal of a …rm's quality ("signalling by riskbearing"). Crowdfunding is selected over a traditional bank loan if the demand for the product is either very small or very large.

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Crowdfunding has mostly been used to finance very unique projects. Recently, however, companies have begun using it to finance more traditional products where they compete against other sellers of similar products. Major crowdfunding platforms, Kickstarter and Indiegogo, as well as Amazon have launched several projects consistent with this trend. This paper offers a model where two competing firms can use crowdfunding prior to direct sales. The model provides several implications that have not yet been tested e.g., (1) Firms can use crowdfunding strategically to signal a high level of demand for their products; (2) (Reward-based) crowdfunding is procyclical; (3) A higher platform fee may lead to higher firm profits in equilibrium; (4) Competition increases the chances of using crowdfunding compared to the monopoly case; (5) A non-monotonic relationship exists between the risk of crowdfunding campaign failure and firm profit.

This paper considers a financing problem for an innovative firm that is launching a web-based platform. The entrepreneur, on one hand, faces a large degree of demand uncertainty on his product and on the other hand has to deal with incentive problems of professional blockchain participants who contribute to the development and sales of the product. We argue that hybrid tokens can be a better option for the firm compared to straight utility tokens or security tokens because they help the firm better deal with both the moral hazard problems (via profit sharing incentives) and demand uncertainty (they help the firm learn the market demand for the product). This finding is consistent with some recent evidence. The paper also generates new predictions regarding the effect of different variables on the choice of financing method that have not yet been tested.

Abstract. This paper surveys 4 major capital structure theories: trade-off, pecking order, signaling and market timing. For each theory, a basic model and its major implications are presented. These implications are compared to the available evidence. This is followed by an overview of pros and cons for each theory. A discussion of major recent papers and suggestions for future research are provided.

This paper analyzes the debt-equity choice for …nancing a two-stage investment when a …rm's insiders have private information about the …rm's expected earnings. When private information is one-dimensional (for example when short-term earnings are common knowledge while long-term earnings are private information) a separating equilibrium does not exist. When private information is two-dimensional a separating equilibrium may exist where …rms with a higher rate of earnings growth issue debt and …rms with a low rate of earnings growth issue equity. This provides new insights into the issue of di¤erent kinds of securities by di¤erent types of …rms under asymmetric information as well as the link between debtequity choice and operating performance.

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