Success drivers of online equity crowdfunding campaigns

Which updates during an equity crowdfunding campaign increase crowd participation?

“…In the specific setting of crowdfunding, startups aim to collect capital from a large number of mostly anonymous investors, who contribute small amounts of money via the Internet Belleflamme et al 2014;Hemer et al 2011;Hornuf and Schwienbacher 2016). The average crowdfunding investor is not likely to have the time, capacity, and incentive to investigate firms and their business model in detail (Ahlers et al 2015;Lukkarinen et al 2016). Due to the specific characteristics of crowdfunding, establishing personal relationships to reduce information asymmetries typical for business angel or venture capital investments (Landström 1992;Sapienza and Korsgaard 1996;Kollmann and Kuckertz 2006) is not feasible in equity crowdfunding markets.…”

A research note on entrepreneurs’ financial commitment and crowdfunding success

“…This central aspect for practitioners has not yet been addressed in the emerging literature discussing how different quality signals lower the informational gap in equity crowdfunding (e.g. Ahlers et al 2015;Vismara 2016;Lukkarinen et al 2016). As impressively illustrated in the introductory quote, it is the amount of 'skin in the game' than can be understood as a reliable signal in the first place for entrepreneurial motivation, implicit engagement with business success as well as willingness to be successful.…”

“…First research papers show that educational degrees (Ahlers et al 2015), network relationships (Ahlers et al 2015;Vismara 2016), quality disclosures through external credentials, update information during the campaign (Block, Hornuf, and Moritz 2018;Moritz, Block, and Lutz 2015) and the provision of financial information (Ahlers et al 2015;Lukkarinen et al 2016) can mitigate such potential informational problems and, consequently, influence funding success positively. In particular, Vismara (2016) and Ahlers et al (2015) demonstrate that the retention of equity is an effective signal to increase later campaign success.…”

Success Factors in Title III Equity Crowdfunding in the United States

“…Several studies have explored factors that can affect the success of equity crowdfunding on the European platforms. Lukkarinen et al [25] examined an equity crowdfunding platform in Finland and found that the size of the entrepreneurs' social networks had a positive effect on the likelihood of successful fundraising, while the minimum investment amount required from each potential investor had a negative effect on the likelihood of success. Vismara [45,46] explored success factors on Crowdcube, an equity crowdfunding platform based in the United Kingdom (UK) and found that social connections, equity retention and engagement of professional investors were positively associated with successful campaigns.…”

“…Table 2 summarizes the insights of empirical studies that examined equity crowdfunding in different geographies. [25] Finland The size of the minimum investment (negative effect) and early finding from entrepreneurs' private networks are associated with successful fundraising. Vismara (2016) [45] Crowdcube, UK Equity retention and number of social connections in social networking sites are predictive of funding success.…”