The Due Diligence of Crowdinvestors: Thorough Evaluation or Gut Feeling only?

Peer-to-peer lending to businesses: Investors’ characteristics, investment criteria and motivation

“…For example, Ahlers et al (2015) and Mollick (2013) found that the idea and the team are crucial positive signals for the investment decision and a successful funding of start-ups in crowdfunding. Guenther et al (2015) argue that a higher degree of industry and financial expertise of equity crowdfunding investors positively affects the amount invested. Ahlers et al (2015) examine start-ups signals that may have an influence on investor's decisions to invest in equity crowdfunding and found that retaining equity and providing more detailed information about risks can be interpreted as effective signals and can therefore strongly impact the probability of investors to invest.…”

Crowdfunding Industry Development: Gaining Leading Role in Digital Economy and Future Trends

“…The authors in their work regarding the study of various forms of entrepreneurship financing, support the positioning and legitimization of crowdfunding as one of the elements of the financial and credit infrastructure (Mochkabadi and Volkmann, 2018). According to a survey conducted by Guenther et al (2014), 4% of crowdfunding investors are family members or friends of job seekers. In 2018, repeated studies were carried out indicating that 3% of crowdfunding investors are somehow connected with this company (Guenther et al, 2018).…”

Secondary Market Listings in Equity Crowdfunding: The Missing Link?

“…We include a novel control denoting whether each investment was made as a gift to another person and a control for the number of available campaigns on the platform on the day of the investment (Hornuf and Schwienbacher, 2018). We further include investor-level controls for investor gender, investor age, whether each investor invested as a legal entity or a private person (proxying for investor experience and sophistication), whether the investor had earned key investor status on the focal platform (typically earned by people who have invested over 10,000 euros; thus, this is a proxy for large investors), average income per resident in the investor's zip code area (investor income), whether the investor was located in the company city (to account for local bias), and whether the investor was located in a capital city (to account for large-city effects) (Günther et al, 2015;Günther et al, 2018;Hervé et al, 2019;Hornuf et al, 2022;Wallmeroth, 2019). All the variables are defined in Table 1.…”

“…Finally, note that most of the control variables in Table 9 are significant and consistent with prior literature. Investors who are male (Hervé et al, 2019;Wallmeroth, 2019), older (Hervé et al, 2019), more experienced or sophisticated (investing as legal entities or having earned a key investor status) (Günther et al, 2015), or from higher-income areas (Hervé et al, 2019) make larger investments than their counterparts. The results regarding the effects of investor location are less clear, which is in line with previous research finding that local bias varies by platform, investor type, and industry (Hornuf et al, 2022) and that big city effects vary by city (Günther et al, 2018).…”