The power of a name: Exploring the relationship between ICO name fluency and investor decision making

Xia, Feilian; Thewissen, James; Shrestha, Prabal; Yan, Shuo

doi:10.1016/j.irfa.2024.103142

International Review of Financial Analysis

2024

DOI: 10.1016/j.irfa.2024.103142

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The power of a name: Exploring the relationship between ICO name fluency and investor decision making

Feilian Xia,

James Thewissen,

Prabal Shrestha

et al.

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2024

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Cited by 2 publications

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Picturing success: The informational role of visual cues in initial coin offerings

Xia,

Thewissen,

Barrio Herrezuelo

et al. 2024

The British Accounting Review

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Picturing success: The informational role of visual cues in initial coin offerings

Xia,

Thewissen,

Barrio Herrezuelo

et al. 2024

The British Accounting Review

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Token-Based Crowdfunding: Investor Choice and the Optimal Timing of Initial Coin Offerings

Drobetz,

Hornuf,

Momtaz

et al. 2024

Entrepreneurship Theory and Practice

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This article examines the operating and financial performance of venture firms conducting initial coin offerings (ICOs) with different types of investors and at different points along a venture’s life-cycle. Relative to purely crowdfunded ICO ventures, institutional investor-backed ICO ventures exhibit weaker operating performance and fail earlier. However, conditional on survival, these ventures financially outperform their peers that do not receive institutional investor support. The diverging effects of investor backing on financial and operating performance are consistent with our theory of “certification exploitation” through a new form of a pump-and-dump scheme. Institutional investors exploit their reputation to drive up ICO valuations and quickly exit the venture post-ICO, with the difference in pre- versus post-certification token prices being their exploitation profit in liquid markets for startups. Our findings further indicate that there is an inverted U-shaped relationship between the financial success of an ICO and the timing along a venture’s life-cycle, with the product piloting phase representing the pivotal point. JEL Codes: G24, G32, K22, L26

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The power of a name: Exploring the relationship between ICO name fluency and investor decision making

Cited by 2 publications

References 57 publications

Picturing success: The informational role of visual cues in initial coin offerings

Picturing success: The informational role of visual cues in initial coin offerings

Token-Based Crowdfunding: Investor Choice and the Optimal Timing of Initial Coin Offerings

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