Funding dynamics in crowdinvesting

Arbeitspapier

We use hand-collected data from four German crowdinvesting portals to analyze what determines individual investment decisions in crowdinvesting. In contrast with the crowdfunding campaigns on Kickstarter where the typical pattern of project support is U-shaped, we find crowdinvesting dynamics to be L-shaped under a first-come, first-serve mechanism and only U-shaped under a sealed-bid second-price auction. The evidence further shows that investors base their decisions on information provided by the entrepreneur in form of updates during the campaign and by the investment behavior and comments of other crowd investors. We also find evidence for herding behavior. As legislators around the world increasingly regulate crowdinvesting activities, knowing how crowd investors behave under no formal information disclosure provides important insights for issuers, portals, and lawmakers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Research Papers in Economics ; No. 9/15

Classification and Topics

• Classification: Wirtschaft ; Portfolio Choice; Investment Decisions ; Financial Institutions and Services: General ; Business and Securities Law ; New Firms; Startups
• Subject: crowdinvesting ; startups ; securities issuance ; IPO investment dynamics ; entrepreneurial finance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hornuf, Lars ; Schwienbacher, Armin
• Event: Veröffentlichung
• (who): Universität Trier, Fachbereich IV – Volkswirtschaftslehre
• (where): Trier
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/121440
• Last update: 10.03.2025, 11:42 AM CET