Wisdom and Learning: Equity Crowdfunding’s Role in Reducing Information Asymmetries

Clarke, Samuel L.

doi:10.5465/ambpp.2016.17362abstract

Cited by 2 publications

(4 citation statements)

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“…Asymmetry of information is a characteristic problem with startup ventures (Clarke, 2016;Meoli & Vismara, 2021), and most of the time entrepreneurs have greater clarity in terms of the quality of the business they are presenting than the investors do (Sood, 2003). In addition, various levels of information among those involved in the funding process can result in adverse selection, making it difficult for the entrepreneurs and the investors to evaluate the business (Amit et al, 1998).…”

Section: Literature Reviewmentioning

confidence: 99%

“…In this way, the content published by the media tends to affect asset prices and investor behavior and provokes a market reaction. Negative news about a company, product, or service can affect investment intentions regarding a given collective venture, just as a positive news item about a given investment opportunity can encourage investors to participate in a crowdfunding campaign (Clarke, 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Only a limited number of startups are able to obtain external capital from venture capital firms and angel investors (Clarke, 2016), especially when we are considering ventures that are led by entrepreneurs who do not have sufficient funds to develop their businesses. High growth potential ventures tend to resort to external financing for the development of their activities (Ahlers et al, 2015).…”

Section: Introductionmentioning

confidence: 99%

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Good News from Mass Media Induces More Investments in the Equity Crowdfunding Market

Felipe,

Mendes-da-Silva,

Ali

et al. 2023

BAR, Braz. Adm. Rev.

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The authors claim that they do not have authorization from the ECF platform to make the survey data available to the public. BAR -Brazilian Administration Review encourages data sharing but, in compliance with ethical principles, it does not demand the disclosure of any means of identifying research subjects.Plagiarism Check: BAR maintains the practice of submitting all documents received to the plagiarism check, using specific tools, e.g.: iThenticate.Peer review: is responsible for acknowledging an article's potential contribution to the frontiers of scholarly knowledge on business or public administration. The authors are the ultimate responsible for the consistency of the theoretical references, the accurate report of empirical data, the personal perspectives, and the use of copyrighted material. This content was evaluated using the double-blind peer review process. The disclosure of the reviewers' information on the first page is made only after concluding the evaluation process, and with the voluntary consent of the respective reviewers.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Good News from Mass Media Induces More Investments in the Equity Crowdfunding Market

Felipe,

Mendes-da-Silva,

Ali

et al. 2023

BAR, Braz. Adm. Rev.

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“…Micro and small businesses have faced certain difficulties in obtaining financing (Clarke, 2016), especially recently-created ones, which have no credit history or guarantees to offer as well as an insufficient cash fund to pay future debts (Berger, Espinosa-Vega, Frame, & Miller, 2005). The vast majority of these companies do not have sufficient financial resources to develop their business in the short run and resort to external financing to develop their activities (Drover et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

Determinants of the success of equity crowdfunding campaigns

Felipe

Ferreira

2020

Rev. contab. finanç.

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Given that equity crowdfunding has grown significantly in Brazil and that this market has been frequently sought by startups as an alternative to scarce credit, this study investigated the elements that determine the success of their financing campaigns. The article fills the gap related to the absence of studies analyzing the probability and time of success of startup financing. In Brazil, the research on this is still in its infancy and there has been little discussion regarding what can determine the success of this type of financing. The findings presented here provide managerial contributions for different stakeholders, ranging from platform managers and entrepreneurs to the ordinary citizen, who ultimately acts as an inducer of change in society, without the need for financial intermediaries. The discussion around the elements that influence the success of startup financing has revealed that the characteristics of the venture profile have been able to determine the success of the financing. This information applied to the dynamic of resource allocation in this market can generate more financial efficiency for private agents as an investment performance parameter and, for public agents, as an input for monitoring. The logistic regression with marginal effects and a dummy for time fixed effects were used. The time of success analysis was carried out via survival models. The sample covers 99 startup financing campaigns from 2014 to 2017. The study identified that the financial goal, the venture category, advisor participation, the campaign duration, and the type of equity offered to the investor positively affect both the probability and speed of success of the startup financing. Its contribution lies in the use of these findings to formulate strategies geared toward estimating success, which enable an appropriate allocation of financial resources.

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Wisdom and Learning: Equity Crowdfunding’s Role in Reducing Information Asymmetries

Cited by 2 publications

References 0 publications

Good News from Mass Media Induces More Investments in the Equity Crowdfunding Market

Good News from Mass Media Induces More Investments in the Equity Crowdfunding Market

Determinants of the success of equity crowdfunding campaigns

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