COVID-19 and Entrepreneurial Processes in U.S. Equity Crowdfunding

Journal of Small Business Management (2022)

42 Pages Posted: 8 Oct 2021 Last revised: 13 Apr 2022

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

Robert Reardon

Florida Atlantic University

Multiple version iconThere are 3 versions of this paper

Date Written: March 21, 2022

Abstract

The COVID-19 pandemic brought about a shift in entrepreneurial opportunities in the
United States. In this paper, we proxy entrepreneurial processes by examining housing prices in
different regions of the United States. Housing prices capture the movement in people, tax
dynamics, and behavioral preferences for equity ownership in different regions and over time, all
of which were drastically impacted by COVID-19. We examine all U.S. equity crowdfunding
offerings starting with the very first offerings in 2016 Q2 until 2021 Q1 based on data from the
Securities and Exchange Commission. The data indicate that regional housing prices postCOVID-19 are a strong predictor of the number of equity crowdfunding campaigns and the
amount of capital raised. Also, the impact of housing price changes on crowdfunding is more
pronounced among more prosperous regions. The housing price effect is robust to numerous
controls and consideration of outliers

Keywords: Equity Crowdfunding, COVID-19, Regional Entrepreneurship

JEL Classification: G21, G28, G51

Suggested Citation

Cumming, Douglas J. and Reardon, Robert S., COVID-19 and Entrepreneurial Processes in U.S. Equity Crowdfunding (March 21, 2022). Journal of Small Business Management (2022), Available at SSRN: https://ssrn.com/abstract=3934088 or http://dx.doi.org/10.2139/ssrn.3934088

Douglas J. Cumming (Contact Author)

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://sites.google.com/view/douglascumming/bio?authuser=0

Robert S. Reardon

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://sites.google.com/view/robertsreardon

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