Signaling in Equity Crowdfunding

Entrepreneurship Theory and Practice, Forthcoming

45 Pages Posted: 14 Feb 2015

See all articles by Gerrit Ahlers

Gerrit Ahlers

A.T. Kearney GmbH

Douglas J. Cumming

Florida Atlantic University; Birmingham Business School; European Corporate Governance Institute (ECGI)

Christina Guenther

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

Denis Schweizer

Concordia University

Multiple version iconThere are 2 versions of this paper

Date Written: February 12, 2015


This paper presents a first-ever empirical examination of the effectiveness of signals that entrepreneurs use to induce (small) investors to commit financial resources in an equity crowdfunding context. We examine the impact of venture quality (human capital, social (alliance) capital, and intellectual capital) and uncertainty on fundraising success. Our data highlight that retaining equity and providing more detailed information about risks can be interpreted as effective signals and can therefore strongly impact the probability of funding success. Social capital and intellectual capital, by contrast, have little or no impact on funding success. We discuss the implications of our results for theory, future research and practice.

Keywords: Equity Crowdfunding, Entrepreneurial Finance, Entrepreneurship, Signaling

JEL Classification: G24, G32, M13, K22, L26

Suggested Citation

Ahlers, Gerrit and Cumming, Douglas J. and Guenther, Christina and Schweizer, Denis, Signaling in Equity Crowdfunding (February 12, 2015). Entrepreneurship Theory and Practice, Forthcoming, Available at SSRN:

Gerrit Ahlers

A.T. Kearney GmbH ( email )

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Douglas J. Cumming

Florida Atlantic University ( email )

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Birmingham Business School ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Christina Guenther

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

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Denis Schweizer (Contact Author)

Concordia University ( email )

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+1 (514) 848-4500 (Fax)


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