Does the Possibility to Make Equity Investments in Crowdfunding Projects Crowd Out Reward‐Based Investments?

28 Pages Posted: 6 Jan 2015

See all articles by Magdalena Cholakova

Magdalena Cholakova

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Bart Clarysse

Vlerick Business School

Date Written: January 2015

Abstract

Despite crowdfunding's increasing popularity as a vehicle for financing early‐stage ventures, we still know relatively little about the mechanisms that drive individuals to pledge and invest via such online platforms. We explored the extent to which financial or nonfinancial motivations determine the decision to invest for equity or to pledge. In addition, we also looked at whether having invested for equity can crowd out individuals' motivation to keep a pledge into the same project. Our results show that nonfinancial motives play no significant role. Furthermore, we find that having invested for equity is a positive predictor of keeping a pledge.

Suggested Citation

Cholakova, Magdalena and Clarysse, Bart, Does the Possibility to Make Equity Investments in Crowdfunding Projects Crowd Out Reward‐Based Investments? (January 2015). Entrepreneurship Theory and Practice, Vol. 39, Issue 1, pp. 145-172, 2015. Available at SSRN: https://ssrn.com/abstract=2545633 or http://dx.doi.org/10.1111/etap.12139

Magdalena Cholakova (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

Burgemeester Oudlaan
T-Building
Rotterdam, Rotterdam 3062PA
Netherlands

Bart Clarysse

Vlerick Business School ( email )

Library
REEP 1
Gent, BE-9000
Belgium

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