Returns on Investments in Equity Crowdfunding

43 Pages Posted: 19 Apr 2016 Last revised: 2 Jun 2016

See all articles by Andrea Signori

Andrea Signori

Catholic University of Milan

Silvio Vismara

University of Bergamo

Date Written: April 10, 2016


This paper quantifies for the first time the return on investments in equity crowdfunding. Using an augmented dataset with combined information from Crowdcube, Crunchbase and the Companies House, we study the population of 212 successfully funded initial equity offerings on UK crowdfunding platform Crowdcube from inception (2011) to 2015. We find that 10% of these firms failed, while 30% pursued one or more seasoned equity offerings, either in the form of private equity injection (10%), follow-on offering on the same platform (22%), or as target in a merger or acquisition (1%). The expected annualized return for an initial crowdfunding investor is 8.8%, implying an overall annual value creation of 25 £m. Among the determinants of post-campaign outcomes, the presence of non-executives, patents and tax incentives are associated with seasoned offerings, while none of the companies initially backed by professional investors have subsequently failed.

Keywords: Crowdfunding, Equity Offerings, Security issuance, Private Equity; Public Equity; Entrepreneurial Finance

JEL Classification: G32; G33; G34; L26

Suggested Citation

Signori, Andrea and Vismara, Silvio, Returns on Investments in Equity Crowdfunding (April 10, 2016). Available at SSRN: or

Andrea Signori

Catholic University of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123

Silvio Vismara (Contact Author)

University of Bergamo ( email )

Via dei Caniana
Bergamo, 24127
24127 (Fax)

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