Founder Teams: Campaign Success and Venture Failure

British Journal of Management, Vol. 0, 1–20 (2021) DOI: 10.1111/1467-8551.12494 (Open Access)

36 Pages Posted: 22 Apr 2021

See all articles by Jerry Coakley

Jerry Coakley

University of Essex - Essex Business School

Aristogenis Lazos

Audencia Business School

José Manuel Liñares-Zegarra

University of Essex - Essex Business School

Date Written: February 19, 2021

Abstract

This paper examines whether solo founders are more likely to succeed in an initial equity crowdfunding (ECF) campaign and are subsequently less likely to fail than founder teams for a large sample of initial ECF campaigns conducted on the three largest UK platforms: Crowdcube, Seedrs and SyndicateRoom. The results show that solo founders have a lower probability of conducting successful initial ECF offerings than founder teams, and are also more likely to fail thereafter. The implication that founder teams enjoy more success is due to the fact that the quality of their human capital may likely attract professional investors who can act as a certification effect. Likewise, the monitoring role of professional investors helps to minimize moral hazard concerns and thus lowers the likelihood of failure for ECF founder teams. The results also establish that founder team human capital characteristics are significant determinants of initial ECF campaign outcomes and venture failure.

Keywords: Equity crowdfunding, founder team, human capital, signalling

JEL Classification: G240, M130

Suggested Citation

Coakley, Jerry and Lazos, Aristogenis and Linares-Zegarra, Jose Manuel, Founder Teams: Campaign Success and Venture Failure (February 19, 2021). British Journal of Management, Vol. 0, 1–20 (2021) DOI: 10.1111/1467-8551.12494 (Open Access), Available at SSRN: https://ssrn.com/abstract=3831352

Jerry Coakley (Contact Author)

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom
+44 1206 872455 (Phone)
+44 1206 873429 (Fax)

HOME PAGE: http://https://www.essex.ac.uk/people/coakl35000/jerry-coakley

Aristogenis Lazos

Audencia Business School ( email )

8 Road Joneliere
BP 31222
Nantes Cedex 3, 44312
France

Jose Manuel Linares-Zegarra

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

HOME PAGE: http://www.essex.ac.uk/ebs/staff/profile.aspx?ID=4474

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