Crowdfunding, Cascades and Informed Investors
11 Pages Posted: 1 Mar 2014
Do higher proportions of (a) informed investors and (b) high-quality projects increase the number of good projects that are ultimately financed via crowdfunding? A simple model and simulation reveals the answers to both questions to be: 'not necessarily'.
Keywords: crowdfunding, new ventures, entrepreneurial finance, startups
JEL Classification: L26, C63, G23
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