Unpacking entrepreneurial crowdfunding 

Entrepreneurs not only compete based on the ideas they generate, but also on their ability to attract financing that allows them to develop and commercialize their ideas. Entrepreneurs increasingly rely on the Internet to mobilize financing from the general public (the “crowd”) rather than approaching the traditional financiers of entrepreneurship (i.e., banks and private equity investors, such as venture capital investors and business angels). This technique, crowdfunding, has shown tremendous growth, yet our theoretical and empirical understanding of crowdfunding remains limited. In this project, we focus on equity crowdfunding (where entrepreneurs offer equity to the crowd in return for financial investment) and plan to address three specific research questions: (1) Which firms attract equity crowdfunding? (2) What are the real effects of attracting equity crowdfunding? and (3) how (if at all) do traditional financiers adjust their working practices to embrace crowdfunding? The proposed project will increase our theoretical understanding of equity crowdfunding, its location in the financial growth cycle, its effects on firm survival, financial performance and growth relative to traditional forms of financing, and its interaction with traditional financiers. Taken together, the proposed project is designed to answer a growing call by academics and policy-makers to increase our understanding of entrepreneurial crowdfunding.