Success factors in title II equity crowdfunding in the United States

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Equity-based crowdfunding is a growing global phenomenon, however little is known about the factors that may affect venture fundraising success in equity crowdfunding platforms in the United States. We develop a novel theoretical framework for understanding equity crowdfunding success by drawing on research in traditional risk capital investments that emphasizes market, execution and agency risks as the key determinants of investment decisions. We expand the framework to include computer-mediated communication challenges that can arise in internet-based equity crowdfunding. We evaluate the framework using data from a leading equity crowdfunding platform in the United States. We find that investors appear to focus on the market and agency risks in screening the potential investments in equity crowdfunding platforms. We also find that the use of video narratives by the entrepreneurs is positively correlated with equity crowdfunding success.

Original languageEnglish
Title of host publicationAMCIS 2017 - America's Conference on Information Systems
Subtitle of host publicationA Tradition of Innovation
PublisherAmericas Conference on Information Systems
Volume2017-August
ISBN (Electronic)9780996683142
StatePublished - 1 Jan 2017
EventAmerica�s Conference on Information Systems: A Tradition of Innovation, AMCIS 2017 - Boston, United States
Duration: 10 Aug 201712 Aug 2017

Other

OtherAmerica�s Conference on Information Systems: A Tradition of Innovation, AMCIS 2017
CountryUnited States
CityBoston
Period10/08/1712/08/17

Fingerprint

Screening
Internet
Communication

Keywords

  • Crowdfunding
  • Equity crowdfunding
  • Information asymmetry
  • Risk capital

Cite this

Mamonov, S., & Malaga, R. (2017). Success factors in title II equity crowdfunding in the United States. In AMCIS 2017 - America's Conference on Information Systems: A Tradition of Innovation (Vol. 2017-August). Americas Conference on Information Systems.
Mamonov, Stanislav ; Malaga, Ross. / Success factors in title II equity crowdfunding in the United States. AMCIS 2017 - America's Conference on Information Systems: A Tradition of Innovation. Vol. 2017-August Americas Conference on Information Systems, 2017.
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Mamonov, S & Malaga, R 2017, Success factors in title II equity crowdfunding in the United States. in AMCIS 2017 - America's Conference on Information Systems: A Tradition of Innovation. vol. 2017-August, Americas Conference on Information Systems, America�s Conference on Information Systems: A Tradition of Innovation, AMCIS 2017, Boston, United States, 10/08/17.

Success factors in title II equity crowdfunding in the United States. / Mamonov, Stanislav; Malaga, Ross.

AMCIS 2017 - America's Conference on Information Systems: A Tradition of Innovation. Vol. 2017-August Americas Conference on Information Systems, 2017.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

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AB - Equity-based crowdfunding is a growing global phenomenon, however little is known about the factors that may affect venture fundraising success in equity crowdfunding platforms in the United States. We develop a novel theoretical framework for understanding equity crowdfunding success by drawing on research in traditional risk capital investments that emphasizes market, execution and agency risks as the key determinants of investment decisions. We expand the framework to include computer-mediated communication challenges that can arise in internet-based equity crowdfunding. We evaluate the framework using data from a leading equity crowdfunding platform in the United States. We find that investors appear to focus on the market and agency risks in screening the potential investments in equity crowdfunding platforms. We also find that the use of video narratives by the entrepreneurs is positively correlated with equity crowdfunding success.

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Mamonov S, Malaga R. Success factors in title II equity crowdfunding in the United States. In AMCIS 2017 - America's Conference on Information Systems: A Tradition of Innovation. Vol. 2017-August. Americas Conference on Information Systems. 2017