A research note on entrepreneurs' financial commitment and crowdfunding success

Arbeitspapier

Established early stage investors decide to invest in new ventures after evaluating the propensity of success and the risk of failure. Consequently, it is of considerable importance that the new business owners have substantial 'skin in the game' and are thus highly committed to business success. Despite its key role in practice, the entrepreneurs' own financial commitment has not yet been discussed in a crowdfunding context. Applying a signaling approach, our empirical findings show that entrepreneurs with comparatively more ex ante financial commitment in their project achieve significantly higher funding success. Moreover, our results suggest that financial commitment is the single most important variable determining funding success.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 03/18

Classification and Topics

• Classification: Wirtschaft ; Portfolio Choice; Investment Decisions ; General Financial Markets: Other ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; New Firms; Startups
• Subject: equity crowdfunding ; crowdinvesting ; campaign success ; financial commitment ; signaling ; entrepreneurial finance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Löher, Jonas ; Schneck, Stefan ; Werner, Arndt
• Event: Veröffentlichung
• (who): Institut für Mittelstandsforschung (IfM) Bonn
• (where): Bonn
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/180672
• Last update: 10.03.2025, 11:45 AM CET