Equity Crowdfunding: Principles and Investor Behaviour

Anna Lukkarinen ()
Additional contact information
Anna Lukkarinen: Aalto University

Chapter 5 in Advances in Crowdfunding, 2020, pp 93-118 from Springer

Abstract: Abstract The chapter provides a topical summary of the present research knowledge of equity crowdfunding. It describes the typical equity crowdfunding process, investor characteristics, and investor motivations. Recognizing the limited due diligence efforts of the crowd despite the presence of high information asymmetries, the chapter presents the role of platforms in evaluating and preselecting target ventures. Furthermore, it highlights the importance of rapidly observable campaign features and signals of venture quality in investor decision making, while also emphasizing the relevance of experienced investors and the herding tendency of crowdinvestors. The chapter offers a comparison of equity crowdfunding investors with traditional providers of early-stage equity financing including micro funders, angel investors, and venture capital funds. It concludes with a discussion of the challenges and potential of equity crowdfunding.

Keywords: Equity crowdfunding; Investment; Entrepreneurial finance; Venture capital; Angel investors; Micro funders; Due diligence; Early stage funding; Information asymmetry; Investor decision (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-46309-0_5

Ordering information: This item can be ordered from
http://www.springer.com/9783030463090

DOI: 10.1007/978-3-030-46309-0_5

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().