 Seasoned equity crowdfunded offeringsJerry Coakley, Aristogenis Lazos and José M. Liñares-Zegarra Journal of Corporate Finance, 2022, vol. 77, issue C Abstract: This paper conjectures that, just as SEO (seasoned equity offering) firms are likely to face fewer information asymmetry problems relative to IPO firms, the same applies to SECO relative to initial ECF (equity crowdfunding) campaign firms. This is mainly due to new information at a SECO - such as pre-money valuation gains – that reduces adverse selection problems. Using a sample of 709 UK ECF firms conducting a first SECO campaign over the 2011–2018 period, the probit results suggest that annualised valuation gains between the initial and SECO campaigns increases the probability of having a successful first SECO campaign but the equity offered lowers this probability. First SECO success is also related to different platform shareholder structures. The results show that the nominee model and coinvestment model dominate the direct model in terms of the probability of conducting a successful first SECO campaign. This is likely linked to reduced adverse selection and moral hazard problems stemming from no separation between ownership and control and enhanced due diligence and monitoring capabilities. Keywords: Entrepreneurial finance; SECO; Valuation gains (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:77:y:2022:i:c:s0929119920303242 DOI: 10.1016/j.jcorpfin.2020.101880 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.