EQUITY CROWDFUNDING SUCCESS: AN EXAMINATION OF TITLE II OFFERINGS

Suzanne K. Hayes (), Bree L. Dority () and Sarah J. Borchers ()
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Suzanne K. Hayes: University of Nebraska-Kearney, 1917 W 24th Street, Kearney, NE 68849 USA
Bree L. Dority: University of Nebraska-Kearney, 1917 W 24th Street, Kearney, NE 68849 USA
Sarah J. Borchers: University of Nebraska-Kearney, 1917 W 24th Street, Kearney, NE 68849 USA

Review of Economic and Business Studies, 2020, issue 25, 9-25

Abstract: Equity crowdfunding (ECF) is a relatively new financing model in the United States (U.S). Many investors and small business owners are exploring this new avenue of capital formation; however, it is a research area that is relatively unexplored due to the limited availability of data. This paper examines factors related to campaign funding success for companies seeking capital under Title II of the JOBS Act. Using a Tobit regression we find that firms which report their equity capitalization raise a higher percentage of their campaign ask. A lower minimum target amount is identified as a second factor related to funding success. This study also shows that firms not reporting a tagline raise a larger percent of their offer, underscoring the importance of quality text descriptions. In addition, we find that economic conditions such as equity market sentiment are important to ECF success.

Keywords: equity crowdfunding; JOBS Act; Title II; ECF campaign success (search for similar items in EconPapers)
JEL-codes: G10 G11 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:aic:revebs:y:2020:j:25:hayess

DOI: 10.1515/rebs-2020-0101

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