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Entrepreneurs have started relying on crowdfunding to fund their investments. This paper surveys the literature linking crowdfunding with innovation in entrepreneurial firms. Two distinct areas are discussed. First, crowdfunding has the potential to foster innovation by offering new sources of capital to innovation‐driven firms and thereby reduce the funding gap for innovative startups. Second, crowdfunding offers a way for the crowd to participate in the innovation process by providing feedback to the entrepreneur. This feedback can take various forms, including providing ideas on the development of the product during and after the campaign (in the spirit of crowdsourcing), and providing valuable information on the future demand for the new product.

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We investigate determinants of investment decisions in investmentbased (equity and bond) crowdfunding campaigns, using a novel investment-, investor-and campaign-level database, where equity refers to investments in entrepreneurial start-ups and bonds to large real estate projects. We find that investors who have higher social interactions invest more. Social interactions are important in an equity crowdfunding context but do not affect participation in bond investments. This is consistent with the view that investors' social networks help reduce information asymmetry. Women invest less in the riskiest (equity) investments but more in safer ones (bonds).These findings are better explained by differences in risk aversion than differences in overconfidence between men and women. Overall, the findings contribute to the understanding of how investmentbased crowdfunding can be a viable source of entrepreneurial finance and how entrepreneurs' campaign decisions affect investor participation in this new form of entrepreneurial finance.

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. While investment intentions are only partially reliable at the individual level, the aggregate amount of collected investment intentions is a strong predictor of campaign success. We investigate alternative reasons for withdrawals, such as lying and informational motives, both of which we find implausible alternatives to hypothetical bias.

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Nous étudions l’impact de l’incertitude sur l’utilisation des nombres ronds dans les décisions d’investissement. Sur une base de données de plus de 15 000 investissements provenant de WiSEED (la plus grande plateforme d’equity crowdfunding en France), nous démontrons que les investisseurs sont plus susceptibles d’investir un nombre rond lorsque l’incertitude est grande durant la campagne. Lorsque davantage d’investisseurs ont contribué, l’incertitude perçue est moindre, ce qui réduit l’utilisation de nombres ronds par les futurs investisseurs. L’expérience des investisseurs joue un rôle modérateur lorsque les investisseurs sont privés de toute information sur le statut de la campagne. Ceci suggère un effet d’apprentissage. Ces différents résultats sont en phase avec les théories comportementales de l’investissement.