Internet-Based Entrepreneurial Finance: Lessons from Germany

36 Pages Posted: 18 Aug 2014 Last revised: 31 Jan 2018

See all articles by Lars Hornuf

Lars Hornuf

Technische Universität Dresden; CESifo (Center for Economic Studies and Ifo Institute)

Armin Schwienbacher

SKEMA Business School

Date Written: July 24, 2017


The Internet-based crowdinvesting market in Europe has developed significantly since its start in 2007 and has become an alternative source of finance for entrepreneurs to sell securities through the Internet to small investors. This market evidences a great variety in platform design and contract forms used by crowdinvesting platforms. By analyzing more detailed, hand-collected data on the complete set of successful and unsuccessful crowdinvesting campaigns run in Germany, this article tests whether different platform and contractual mechanisms affect crowd participation. The results show that crowd participation is largest when the minimum ticket size is small, the crowd is pooled in a financial vehicle, and the crowd is offered investments in the form of profit-participating loans. Moreover, the very same mechanisms increase the chances of achieving successful campaigns and raising a larger amount.

Keywords: entrepreneurial finance, crowdinvesting, equity crowdfunding

JEL Classification: G3, L26, M13, K22

Suggested Citation

Hornuf, Lars and Schwienbacher, Armin, Internet-Based Entrepreneurial Finance: Lessons from Germany (July 24, 2017). Available at SSRN: or

Lars Hornuf

Technische Universität Dresden ( email )

Dresden, 01307


CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679

Armin Schwienbacher (Contact Author)

SKEMA Business School ( email )

Avenue Willy Brandt
Euralille, 59777


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