Exploring the viability of equity crowdfunding as a fundraising instrument: A configurational analysis of contingency factors that lead to crowdfunding success and failure

Crescenzo, Veronica De; Soriano, Domingo Ribeiro; Covin, Jeffrey G.

doi:10.1016/j.jbusres.2019.09.051

Cited by 99 publications

(76 citation statements)

References 62 publications

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“…The experience of musicians that release crowdfunding every time will increase the funding rate by 4.9 percent. These findings are consistent with the results of Hsieh et al (2019) andDe Crescenzo et al (2020).…”

Section: Social Media Account Disclosure and Funding Ratesupporting

confidence: 93%

From self‐entertainment to being appreciated: how does social media transfer talent to business?

Chen

Ding

et al. 2021

Accounting & Finance

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This study investigates the influence of social media information disclosure on crowdfunding rates. Using a sample of 1,844 projects from a music crowdfunding platform in China, we find that fundraisers who disclosed their social media accounts contributed to a greater funding rate. Social media account disclosure appears to be more significant for projects created by individuals and accompanied by videos and more images, as well as negative descriptions. Furthermore, the disclosure of social media presence information can improve the funding rate by enabling digital reputations and breaking geographical restrictions. Robust tests and 2SLS estimations support our conclusion.

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Section: Social Media Account Disclosure and Funding Ratesupporting

confidence: 93%

From self‐entertainment to being appreciated: how does social media transfer talent to business?

Chen

Ding

et al. 2021

Accounting & Finance

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“…In this paper, we focus on the projects which successfully surpass the fundraising goal stipulated by fundraisers in equity crowdfunding, that is, overfunding. The equity-based model is noted as the less-researched type of crowdfunding (De Crescenzo et al [7]). In leading equity crowdfunding platforms, empirical evidence reveals that for a large stake of successfully funded projects the raised amount only slightly exceeds the funding target.…”

Section: Introductionmentioning

confidence: 99%

Determinants of Overfunding in Equity Crowdfunding: An Empirical Study in the UK and Spain

2020

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Crowdfunding constitutes one of the financial solutions to achieve the sustainable development goals, by fostering innovation and economic growth. This paper conducts an empirical two-country analysis (the UK and Spain) of characteristics of successful offerings to assess the distribution of overfunding in equity crowdfunding. Unlike previous research, which has usually comprised campaigns posted on single-country portals, our study is based on an international leading platform operating with country-differentiated websites, Crowdcube. Such an approach allows us to identify influential factors which are dependent on country and, simultaneously, to control for those platform-related factors. To focus on the overfunding distribution, a quantile regression methodology is adopted for a total sample of 299 overfunded campaigns from 2015 to 2018. Overall, empirical results show that the effects of key campaign features (equity, voting rights and social capital) are stronger and more significant at the 75th and 90th quantiles for the overfunding level and the number of investors. Furthermore, we find significant differences across countries, which persist along the distributions of overfunding. Yet, interestingly, between-country differences in overfunding level vanish for the technological sector. Our research provides further insights into the relation between equity crowdfunding and sustainable finance.

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“…Many factors influence online investment decisions (Atmaca andKaradaş 2020;de Crescenzo et al 2020). Studies suggest that relatives are the main sources of funding support at the early stage of crowdfunding (Groza et al 2020).…”

Section: Factors Affecting Fundraising Outcomesmentioning

confidence: 99%

How much do social connections matter in fundraising outcomes?

Guo¹,

Wang²,

et al. 2021

Financ Innov

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This study examines the role of social connections and network centrality in attracting funders to crowdfunding campaigns. We classify social connections as either external (e.g., Facebook) or internal (e.g., investing in online platforms through resource exchange). Drawing from the 108,463 crowdfunding campaigns on the online platform Kickstarter from April 21, 2009, to July 24, 2019, we apply external linkages and online followers to estimate the effect of external social connections. We construct a digraph network for the internal social connections and use PageRank, HITS, and centrality to obtain the weights of the nodes. Next, we compare the performance change of several prediction algorithms by feeding social connection-related variables. This study has several findings. First, for external social connections, having more online followers improves the funding success rate of a campaign. Second, for internal social connections, only authority and degree in centrality positively affect the number of funders and the campaign’s financing progress among the weights of the nodes. Third, using social connection variables improves the prediction algorithms for funding outcomes. Fourth, external social connections exert greater funding outcomes than internal social connections. Fourth, entrepreneurs should extend their external social connections to their internal social connections, and network centrality expedites project financing. Fifth, the effect of social connections on fundraising outcomes varies among the campaign categories. Fundraisers who are online influencers should leverage their online social connections, notably for the project categories that matter.

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Exploring the viability of equity crowdfunding as a fundraising instrument: A configurational analysis of contingency factors that lead to crowdfunding success and failure

Cited by 99 publications

References 62 publications

From self‐entertainment to being appreciated: how does social media transfer talent to business?

From self‐entertainment to being appreciated: how does social media transfer talent to business?

Determinants of Overfunding in Equity Crowdfunding: An Empirical Study in the UK and Spain

How much do social connections matter in fundraising outcomes?

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