Equity Retention and Social Network Theory in Equity Crowdfunding

25 Pages Posted: 2 Sep 2015

Date Written: September 1, 2015

Abstract

After comparing the regulation and development of equity crowdfunding around the world, this paper investigates the signaling role played toward crowdfunders by equity retention and social capital. Using a sample of 271 projects listed on the UK platforms Crowdcube and Seedrs in the period 2011-2014, we find that campaigns launched by entrepreneurs who (1) sold a smaller fraction of their companies at listing and (2) had more social capital had higher probabilities of success. Our results combine findings in classical entrepreneurial finance settings, like venture capital and IPOs, with evidence from other, non-equity crowdfunding markets.

Keywords: Equity, Crowdfunding, Signaling, Network theory, National Systems of Entrepreneurship, Entrepreneurial finance

JEL Classification: G30

Suggested Citation

Vismara, Silvio, Equity Retention and Social Network Theory in Equity Crowdfunding (September 1, 2015). Available at SSRN: https://ssrn.com/abstract=2654325 or http://dx.doi.org/10.2139/ssrn.2654325

Silvio Vismara (Contact Author)

University of Bergamo ( email )

Via dei Caniana
2
Bergamo, 24127
Italy
24127 (Fax)

HOME PAGE: http://https://scholar.google.it/citations?user=Sa8sBkoAAAAJ&hl=en

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