The rationale for listing on equity crowdfunding: actual and expected benefits for companies

Equity crowdfunding can provide significant resources for new ventures. However, little is known about the drivers and rationale influencing entrepreneurs’ desire to approach crowd investors for financing. Drawing on a qualitative study of 38 companies that fundraised via equity crowdfunding in the...

Ausführliche Beschreibung

Gespeichert in:
Bibliographische Detailangaben
Veröffentlicht in:Economia e politica industriale 2021-12, Vol.48 (4), p.527-549
1. Verfasser: Di Pietro, Francesca
Format: Artikel
Sprache:eng
Schlagworte:
Online-Zugang:Volltext
Tags: Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
Beschreibung
Zusammenfassung:Equity crowdfunding can provide significant resources for new ventures. However, little is known about the drivers and rationale influencing entrepreneurs’ desire to approach crowd investors for financing. Drawing on a qualitative study of 38 companies that fundraised via equity crowdfunding in the UK, our evidence shows that a successful fundraising campaign reduces the uncertainty for new ventures regarding market acceptance of their product and demonstrates the potential for uninformed third parties such as professional investors. Also, we found that entrepreneurs pursue crowdfunding to minimize dilution of their equity stake and retain the maximum level of autonomy. In certain respects, crowdfunding creates a ‘diluted’ form of equity funding with less prohibitive limitations on entrepreneurial autonomy than other forms of equity funding, allowing more informal and relational partnership with investors.
ISSN:0391-2078
1972-4977
DOI:10.1007/s40812-021-00188-9