Inclusive digital finance: the industry of equity crowdfunding

Abstract

Nowadays equity crowdfunding plays an important role in the entrepreneurial finance markets. To better understand the functioning of the industry, it is important to consider the entire equity crowdfunding process and all the actors involved. Equity crowdfunding platforms match indeed the demand of capital from entrepreneurial ventures with the supply of capital by investors. This manuscript is a first step in this direction, by (1) comparing equity crowdfunding with traditional sources of entrepreneurial finance; (2) discussing the potential and the perils of equity crowdfunding for inclusivity and democratization; (3) highlighting the role of visual information in digital finance; and (4) providing first insights on the industrial dynamics in equity crowdfunding. The paper gives researchers and practitioners orientation about recent developments in equity crowdfunding literature and provides relevant research directions.

Strategic entrepreneurial choice between competing crowdfunding platforms

“…There is a growing interest in the equity crowdfunding (ECF) literature in both corporate governance and competing platform shareholder structures. Studying them has become fundamental (Buttice & Vismara, 2021). Cumming, Vanacker and Zahra (2019c) highlight that ECF platforms embrace the three shareholder structures that are adopted by the Big 3 UK ECF platforms.…”

Microfinance towards micro-enterprises development in rural Malaysia through digital finance

“…Moreover, with lower transaction costs and faster turnaround times, digital finance has the potential to strengthen the relationship between financial services and ME sustainability [ 59 ]. Unlike traditional face-to-face transactions, digital finance allows MEs to move funds via their digital account even without risk of losing currency notes [ 22 ]. Additionally, digital finance's efficiency and electronic transparency may reduce MSEs' risk perceptions.…”

Governance and Success in U.S. Equity Crowdfunding

“…Among different forms of entrepreneurial finance, the potential costs associated with information asymmetry and agency problems are perhaps the most pronounced in the case of equity crowdfunding (Ahlers et al, 2015;Belleflamme et al, 2014;Butticè and Vismara, 2021;Coakley and Lazos, 2021;Zhang, 2020, 2021;Kleinert, Mochkabadi, 2021Vismara, 2016. And further, there are pronounced adverse selection costs with equity crowdfunding such that lower quality entrepreneurs, on average, tend to gravitate to equity crowdfunding (Walthoff-Borm et al, 2018;Blaseg et al, 2021).…”