Equity Crowdfunding: The Influence of Perceived Innovativeness on Campaign Success

Pendeven, Benjamin Le; Schwienbacher, Armin

doi:10.1111/1467-8551.12585

Cited by 16 publications

(6 citation statements)

References 66 publications

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“…Most start-ups are eligible for tax relief (64%), while 9% of start-ups have nonexecutive directors on their boards. Only 6% of start-ups had patents before the launch of the initial equity crowdfunding offering (similar statistics are reported in previous studies, e.g., Le Pendeven & Schwienbacher, 2021; Rossi et al, 2021). The start-ups are on average 2.96 years old (median = 2.00) and the average total assets is £143.81K (median = 9.43).…”

Section: Resultssupporting

confidence: 86%

Unsuccessful Equity Crowdfunding Offerings and the Persistence in Equity Fundraising of Family Business Start-Ups

Rossi

Vanacker

Vismara

2022

Entrepreneurship Theory and Practice

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Little is known about what happens after an unsuccessful equity crowdfunding campaign. Taking a socioemotional wealth perspective, we hypothesize that family business start-ups are more likely to eventually still raise equity financing relative to nonfamily business start-ups. Moreover, while family business start-ups are initially less likely to provide voting rights, we hypothesize that they are more likely to offer shares with voting rights after an unsuccessful campaign. Using data on the UK equity crowdfunding market, we find support for our hypotheses. This study adds novel insights into the nexus between equity crowdfunding and family business literature.

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Section: Resultssupporting

confidence: 86%

Unsuccessful Equity Crowdfunding Offerings and the Persistence in Equity Fundraising of Family Business Start-Ups

Rossi

Vanacker

Vismara

2022

Entrepreneurship Theory and Practice

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“…This idea is corroborated by Löfsten (2014) in his study of Swedish medium-sized technology-based industrial firms with R&D. Löfsten (2014) theorised and found empirical support for the positive causal relationship between innovation and financial performance. Similarly, in Le Pendeven and Schwienbacher's (2021) study of four large equity crowdfunding platforms, it was observed that more innovative business projects have a greater capacity to attract investors and achieve success. Thus, devoting significant attention to achieving great innovation can constitute a triggering mechanism for reaching firms' financial objectives.…”

Section: Literature Review and Hypothesesmentioning

confidence: 93%

The role of equity crowdfunding campaigns in shaping firm innovativeness: evidence from Italy

Valenza

Balzano

Tani

et al. 2023

EJIM

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PurposeThis paper aims to contribute to the scientific debate concerning the impact of equity crowdfunding on the performance of crowdfunded firms after campaigning. To this aim, the purpose of this paper is to investigate the relationship between the characteristics of the campaign and the subsequent firm innovativeness.Design/methodology/approachThis study adopts a quantitative research approach to evaluate if the entrepreneurial choices affecting the characteristics of the equity crowdfunding campaigns have an impact on the post-campaign firm innovativeness.FindingsThe results of the models show that the campaign characteristics have a direct impact on the firm innovativeness, both in terms of offering and communication and the campaign performance.Originality/valueThis paper presents one of the first studies to investigate the relationship between the choice of campaign characteristics and the post-campaign firm innovativeness. As such, the study contributes to both the literature concerning start-up innovation and the literature about the impact of equity crowdfunding.

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“…From a broader perspective, it has pushed the boundaries of innovation in newly established and emerging projects. Large numbers of participants, from idea providers to users, customers, investors, and even brand or campaign sponsors, create unwanted effects on market structure and, willingly or unwillingly, create new challenges and opportunities for innovation management (Le Pendeven, and Schwienbacher, 2021).…”

Section: Practical Implicationsmentioning

confidence: 99%

Towards financing the entrepreneurial SMEs: exploring the innovation drivers of successful crowdfunding via a multi-layer decision-making approach

Mahdiraji

Hajiagha

Jafari‐Sadeghi

et al. 2023

EJIM

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PurposeIn this research, extracting the innovation drivers of successful crowdfunding from the literature review, screening them for the entrepreneurial small- and medium-sized enterprises (SMEs), analysing the cause-and-effect relationship amongst them and presenting a basic causal conceptual model and eventually determining the importance/weight of each relevant driver were the primary purposes of this research. As a result, the authors have also designed a score function to measure the future innovative crowdfunding score for SMEs.Design/methodology/approachA multi-layer multi-criteria decision-making (MCDM) approach has been designed and employed to achieve research objectives. After extracting the initial list of drivers, Fuzzy Delphi was applied to screen the relevant innovation drivers of successful crowdfunding for entrepreneurial SMEs. Decision-making trial and evaluation laboratory (DEMATEL) was used to analyse the cause-and-effect relationship amongst the drivers and illustrate a basic conceptual model. Analytical network process (ANP) and Stepwise Weight Assessment Ratio Analysis (SWARA) were applied to determine the importance of the drivers and by aggregating them to measure the innovative crowdfunding score.FindingsInitially, 28 innovation drivers of successful crowdfunding were extracted from the literature. Then by employing the first-round Delphi fuzzy method amongst 15 international entrepreneurs in SMEs, the relevant drivers, including eleven items, were screened and selected. Then by implementing the DEMATEL method, the relationship amongst these screened drivers was identified, and seven drivers were determined as causes and the rest as effects. Subsequently, a conceptual model based on the causal analysis of the drivers from the DEMATEL method was designed. Eventually, by aggregating the weight of drivers emanated from SWARA, DEMATEL and DANP, the score function for measuring the situation of an SME was designed.Practical implicationsAccording to the crowdfunding scores in this research from entrepreneurs of SMEs, influential factors in developing countries were recognised as two times more prominent in developing countries. This might be rooted in the circumstances of developing countries where many startups and SMEs are emerging in vast areas and different fields due to investment in innovation management. In these countries, the authorities and officials support these companies to empower their capabilities and innovative ideas to (1) deal with the severe competitive market and (2) benefit from them as potential economic engines. Therefore, crowdfunding platforms and public initiatives can be considered one of the most effective government supports, which may involve financial risks.Originality/valueTo the best knowledge of the authors, investigating the innovation drivers of successful crowdfunding via quantitative analysis by multi-layer decision-making approaches has not been considered previously. Moreover, the authors have designed a crowdfunding score function to determine the situation of an entrepreneurial SME in this area. A combination of different MCDM methods, including Fuzzy Delphi, SWARA, DEMATEL, ANP and DANP, to investigate the innovation drivers of successful crowdfunding in SMEs has not been considered previously.

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Equity Crowdfunding: The Influence of Perceived Innovativeness on Campaign Success

Cited by 16 publications

References 66 publications

Unsuccessful Equity Crowdfunding Offerings and the Persistence in Equity Fundraising of Family Business Start-Ups

Unsuccessful Equity Crowdfunding Offerings and the Persistence in Equity Fundraising of Family Business Start-Ups

The role of equity crowdfunding campaigns in shaping firm innovativeness: evidence from Italy

Towards financing the entrepreneurial SMEs: exploring the innovation drivers of successful crowdfunding via a multi-layer decision-making approach

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