On Crowdfunding Success: Firm and Owner Attributes and Social Networking

40 Pages Posted: 5 Apr 2017

See all articles by Miwako Nitani

Miwako Nitani

Telfer School of Management, University of Ottawa

Allan Riding

Telfer School of Management, University of Ottawa

Date Written: April 2, 2017

Abstract

This study investigates the role of platform-mandated disclosure, firm and owner attributes and social networking activity on the success of crowdfunding campaigns. It is found that more stringent platform disclosure requirements and risk warnings are not associated with success of crowdfunding campaigns. However, owner experience and firm-specific financial statement information are correlated with crowdfunding success. Moreover, social networking, at least as measured by the frequency of social media contacts, also plays a role. Those two findings combined suggest that social media encourage crowdinvestors’ rational herding and make crowdfunding investment decisions that are informed by both the wisdom of the crowd and the quality of the opportunity.

Keywords: Crowdfunding, Herding, Social Capital, Information Disclosure, Platform Comparison

JEL Classification: M13, M48, O16, O35

Suggested Citation

Nitani, Miwako and Riding, Allan, On Crowdfunding Success: Firm and Owner Attributes and Social Networking (April 2, 2017). 2017 Emerging Trends in Entrepreneurial Finance Conference, Available at SSRN: https://ssrn.com/abstract=2945081 or http://dx.doi.org/10.2139/ssrn.2945081

Miwako Nitani (Contact Author)

Telfer School of Management, University of Ottawa ( email )

55 Laurier Avenue East
Ottawa, Ontario K1N 6N5
Canada
(613) 562-5800 4913 (Phone)

Allan Riding

Telfer School of Management, University of Ottawa ( email )

55 Laurier Avenue East
Ottawa, Ontario K1H6E7
Canada
6133142394 (Phone)

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