This study investigates campaign success in equity crowdfunding, using campaigns listed on a leading Japanese equity crowdfunding platform with an all-or-nothing rule. We examine how campaign success depends on campaign- and firm-specific characteristics, including the campaign target amount. We find that patenting positively affects campaign success and the campaign target amount. The results indicate that innovative firms have a higher probability of campaign success, while they set a higher target amount. We also provide evidence that campaigns that have already provided services and products have a lower probability of success, although not always significant, and firms tend to set a lower target amount. Moreover, campaigns launched by venture capital-backed firms are more likely to succeed than others. Furthermore, campaigns launched by firms eligible for the Angel Tax System, introduced in Japan as a tax incentive for investment in young and small firms, have a higher tendency to succeed in equity crowdfunding. Our findings suggest that the Angel Tax System attract more crowd investors and such tax incentives help raise funds on equity crowdfunding platforms for new businesses.

This study explores the graduation of initial public offering (IPO) firms and regulatory reforms in junior stock markets. Using firms listed on the two junior stock markets of the Tokyo Stock Exchange (TSE), the Market of the high-growth and emerging stocks (MOTHERS) and JASDAQ Securities Exchange (JASDAQ), we examine the factors that affect the time to graduation to the TSE main markets. We find that young IPO firms and those with high research and development (R&D) intensity are less likely to graduate from the TSE junior markets (MOTHERS and JASDAQ). The results also reveal that listing regulations on graduation to the TSE main market, which were introduced only to the MOTHERS, but not to the JASDAQ, accelerate the graduation of IPO firms. Furthermore, we provide evidence that IPO firms that ultimately graduate to the TSE main markets exhibit better performance.