Social Media Marketing for Equity Crowdfunding: Which Posts Trigger Investment Decisions?

Abstract

Based on 26,883 investment decisions, we examine the inŕuence of social media marketing on crowd participation in equity crowdfunding. We distinguish between different types of informative and persuasive posts on Facebook and Twitter. Informative posts provide investors with information about the crowdfunding campaign; persuasive posts do not, but rather aim to directly inŕuence an investor’s decision-making process. We find that both types of posts have a positive impact on the number of investments. Persuasive posts increase the amount of an investment if they contain a statement about the previous investment success of the campaign and signal the crowd that they are not investing alone.

Keywords: Equity crowdfunding, Entrepreneurial finance, Social media, Investor communication

JEL Classification: G11, G20, M13