Crowdfunding, Cascades and Informed Investors

11 Pages Posted: 1 Mar 2014

See all articles by Simon C. Parker

Simon C. Parker

University of Western Ontario; Durham University - Department of Economics and Finance; IZA Institute of Labor Economics


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

Suggested Citation

Parker, Simon C., Crowdfunding, Cascades and Informed Investors. IZA Discussion Paper No. 7994. Available at SSRN:

Simon C. Parker (Contact Author)

University of Western Ontario ( email )

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London, Ontario N6A 5B8

Durham University - Department of Economics and Finance ( email )

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United Kingdom
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IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072

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