Information Cascades Among Investors in Equity Crowdfunding

49 Pages Posted: 5 Apr 2015

Date Written: April 3, 2015


A number of papers in finance study information cascades among investors, especially in the IPO setting. These studies typically differentiate between institutional vs retail investors, as this is the only information available to potential backers. Life information available in equity crowdfunding platforms includes instead also the names of individual investors, who may disclose further information about themselves by linking their profile to social networks. Using a sample of 111 equity offerings posted in 2014 on Crowdcube, we show that information cascades among individual investors are crucial for the success of crowdfunding campaigns. Public profile investors increase the appeal of the offer already among early investors, who in turn mediate the effect of public profile investors on the success of the campaign.

Keywords: Crowdfunding, Information cascades, Crowdcube, Signaling, Entrepreneurial finance.

JEL Classification: G30

Suggested Citation

Vismara, Silvio, Information Cascades Among Investors in Equity Crowdfunding (April 3, 2015). Available at SSRN: or

Silvio Vismara (Contact Author)

University of Bergamo ( email )

Via dei Caniana
Bergamo, 24127
24127 (Fax)

HOME PAGE: http://

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