Be Careful What You Ask For: Fundraising Strategies in Equity Crowdfunding

Abstract

We use equity crowdfunding data to ask how fundraising amounts can be explained by what entrepreneurs ask for, versus what investors want to invest. The analysis exploits unique features of crowdfunding where entrepreneurs not only set investment goals, but also chose when to close their campaigns. More experienced and more educated founder teams ask for more. Their campaigns succeed more often, and they raise more money. Female teams ask for less, are equally successful, yet raise significantly less. They also wait longer before closing campaigns, suggesting they want to raise more than what they originally asked for.

Keywords: Entrepreneurial finance, Equity crowdfunding, Start-ups, Fundraising, Gender

JEL Classification: G20, G24