Determinants of Individual Investment Decisions in Investment-Based Crowdfunding

45 Pages Posted: 11 Mar 2016 Last revised: 28 Feb 2019

See all articles by Fabrice Hervé

Fabrice Hervé

Université de Bourgogne - CREGO - UBFC

Elodie Manthé

Université de Bourgogne

Aurelie Sannajust

University of Saint Etienne

Armin Schwienbacher

SKEMA Business School

Multiple version iconThere are 2 versions of this paper

Date Written: February 7, 2018

Abstract

We investigate determinants of investment decisions in investment-based (equity and real estate) crowdfunding campaigns, using a novel investment-, investor- and campaign-level database. We find that women invest less in the riskiest investments but more in safer ones. These findings are better explained by differences in risk aversion than differences in overconfidence between men and women. Investors located in an area considered more "sociable" (socially friendly) also invest more, especially if the investor is a woman. Overall, the findings contribute to our understanding of how investment-based crowdfunding can be a viable source of entrepreneurial finance and how entrepreneurs' campaign decisions affect investor participation in this new form of entrepreneurial finance.

Keywords: crowdfunding; startup finance; entrepreneurial finance; equity; investment decision

Suggested Citation

Hervé, Fabrice and Manthé, Elodie and Sannajust, Aurelie and Schwienbacher, Armin, Determinants of Individual Investment Decisions in Investment-Based Crowdfunding (February 7, 2018). Available at SSRN: https://ssrn.com/abstract=2746398 or http://dx.doi.org/10.2139/ssrn.2746398

Fabrice Hervé

Université de Bourgogne - CREGO - UBFC ( email )

2 Bd Gabriel
21 000 DIJON
France

Elodie Manthé

Université de Bourgogne ( email )

Bourgogne

Aurelie Sannajust

University of Saint Etienne ( email )

Rue Tréfilerie
Saint-Etienne, 42000
France

Armin Schwienbacher (Contact Author)

SKEMA Business School ( email )

Avenue Willy Brandt
Euralille, 59777
France

HOME PAGE: http://sites.google.com/view/armin-schwienbacher

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