11 Pages Posted: 27 Feb 2015 Last revised: 7 Dec 2015
Date Written: February 25, 2015
Syndicates cause a shift from crowdfunding startups to crowdfunding lead investors. They provide both the tools and incentives for lead investors to conduct due diligence and monitor post-investment activity and also to leverage their expertise and reputation when connecting with interested investors worldwide. By linking the online benefits of low transaction costs and global investor networks with the offline benefits of face-to-face interactions with founders, syndicates may result in a significant increase in the overall level of online investment activity. We report evidence that foreshadows a meaningful role for syndicates as a channel for allocating capital to early-stage ventures.
Keywords: equity crowdfunding, crowdfunding, angel investment, business angels, syndicates, online syndication, local bias, social networks
Suggested Citation: Suggested Citation
Agrawal, Ajay and Catalini, Christian and Goldfarb, Avi, Are Syndicates the Killer App of Equity Crowdfunding? (February 25, 2015). MIT Sloan Research Paper No. 5126-15; Rotman School of Management Working Paper No. 2569988. Available at SSRN: https://ssrn.com/abstract=2569988 or http://dx.doi.org/10.2139/ssrn.2569988