Sustainable Equity Crowdfunding Projects: Are They A Driving Force to Revitalise Italy After Global Socio-Economic Consequences of The COVID-19?

Abstract

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.

The Effects of Equity Crowdfunding and Business Partnership Relationships on Business Performance: A Study on MSMEs Registered in Santara

“…In line with that, Ardiansyah (2019) stated that fintech such as equity crowdfunding really helps MSMEs in obtaining sources of capital funding to maintain and improve their business performance. Manganiello and Dragulanescu (2021) claimed that ECF services have a significant effect on improving performance, because there are other motivations such as refunds that affect investor decisions. This can help business actors who are in need of additional capital to develop their businesses and achieve optimal business performance.…”

“…Several researchers previously studied the application of equity crowdfunding services as a source of financing for MSME businesses and the effects of partnerships on MSME performance partially. Research conducted by Manganiello and Dragulanescu (2021) revealed that equity crowdfunding services have a significant effect on improving environmental performance, because there are other motivations for returning money that affect investors decisions. Ardiansyah (2019) said that fintech such as equity crowdfunding can help MSMEs in obtaining funding sources to maintain and improve business performance.…”

Promoting Community Resilience During Covid-19 Crises using Donation-Based Crowdfunding: Developing A Conceptual Model

“…Elmer et al, 2021). Moreover, donation-based crowdfunding platforms witnessed a surge in the number of COVID-19-related campaigns to support local communities, medical workers, small businesses, and personal medical and funeral expenses(Saleh et al, 2021) Manganiello and Dragulanescu (2021). highlighted the case of an Italian equity crowdfunding platform where investors are more willing to support projects with sustainable orientations after COVID-19.…”