Exploring Success Factors in Indonesian Equity Crowdfunding

Abstract

In Indonesia, Micro, Small, and Medium Enterprises (MSMEs) contributed to more than 60 percent of the country's total GDP. One of the prime hurdles that MSMEs commonly face is financing access. With the development of Fintech, Equity Crowdfunding (ECF) has been seen as potential alternative financing for many entrepreneurs since ECF allows them to finance their ventures by raising capital from large pools of individuals, bypassing the conventional financial intermediaries. This research examines various factors that are significant for the success of crowdfunding campaigns using data from the equity crowdfunding platforms in Indonesia. The result shows that the number of investors, the fund's targets, minimum of investment, understandability, and provision of the video have a significant and positive effect. At the same time, social media networks and projected rate of return negatively correlate with the success of Indonesian equity crowdfunding. This article sheds light on the opportunity and challenges of crowdfunding in Indonesia and proposes insights for entrepreneurs participating in the ECF system.