Does intellectual capital positively affect the success of the equity crowdfunding campaigns? This paper answers this question using an original dataset of 191 equity crowdfunding campaigns, gathered from Italian platforms over the period 2014-2018; special attention is dedicated to patents effect, R&D and team's education level on funding success, as they may serve as signals of unobservable quality of equity crowdfunding campaigns. Then, following literature on success factors for crowdfunding, the paper analyzes the signaling role of equity share retained by founders and by their social network size. Results suggest that intellectual capital (i.e. patents, R&D, team's education level), amount of equity retained by projects' founders and size of their social network have a positive and significant impact on fundraising success and are perceived as quality signals of crowdfunding campaigns by external investors.
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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