Determinants of Individual Investment Decisions in Investment-Based Crowdfunding
45 Pages Posted: 11 Mar 2016 Last revised: 28 Feb 2019
Date Written: February 7, 2018
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: Suggested Citation