Drivers of Fundraising Success in Equity Crowdfunding

50 Pages Posted: 3 Apr 2019

See all articles by Sandra Isabel Correia

Sandra Isabel Correia

Universidade do Porto - Faculdade de Economia (FEP)

Miguel Sousa

School of Economics and Management, University of Porto

Elisio Brandao

Universidade do Porto - Faculdade de Economia (FEP)

Date Written: March 17, 2019

Abstract

Using an unique hand-collected database of 1,256 campaigns from the two major platforms of equity crowdfunding in the United Kingdom, between 2015 and 2018, we find that the factors that most influence the campaign success are: (i) the quality of the project, signalized by equity retention and the presence of a large investor; (ii) the information disclosure and (iii) the early investments. There is no evidence economic potential of the firm are relevant for investor decisions. Investors probably use other signals (than growth and profitability perspectives) to evaluate the economic potential of firms and project quality.

Keywords: equity crowdfunding, alternative finance, herding behavior

JEL Classification: G30

Suggested Citation

Correia, Sandra Isabel and Sousa, Miguel and Brandão, Elísio Fernando Moreira, Drivers of Fundraising Success in Equity Crowdfunding (March 17, 2019). Available at SSRN: https://ssrn.com/abstract=3354210 or http://dx.doi.org/10.2139/ssrn.3354210

Sandra Isabel Correia (Contact Author)

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

Miguel Sousa

School of Economics and Management, University of Porto ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

Elísio Fernando Moreira Brandão

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Roberto Frias
s/n
Porto, 4200-464
Portugal

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