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Equity Crowdfunding Success: An Examination Of Title Ii Offerings

Author

Listed:
  • SUZANNE K. HAYES

    (University of Nebraska-Kearney, 1917 W 24th Street, Kearney, NE 68849 USA)

  • BREE L. DORITY

    (University of Nebraska-Kearney, 1917 W 24th Street, Kearney, NE 68849 USA)

  • SARAH J. BORCHERS

    (University of Nebraska-Kearney, 1917 W 24th Street, Kearney, NE 68849 USA)

Abstract

Equity crowdfunding (ECF) is a relatively new financing model in the United States (U.S). Many investors and small business owners are exploring this new avenue of capital formation; however, it is a research area that is relatively unexplored due to the limited availability of data. This paper examines factors related to campaign funding success for companies seeking capital under Title II of the JOBS Act. Using a Tobit regression we find that firms which report their equity capitalization raise a higher percentage of their campaign ask. A lower minimum target amount is identified as a second factor related to funding success. This study also shows that firms not reporting a tagline raise a larger percent of their offer, underscoring the importance of quality text descriptions. In addition, we find that economic conditions such as equity market sentiment are important to ECF success.

Suggested Citation

  • Suzanne K. Hayes & Bree L. Dority & Sarah J. Borchers, 2020. "Equity Crowdfunding Success: An Examination Of Title Ii Offerings," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 25, pages 9-25, June.
    • Handle: RePEc:aic:revebs:y:2020:j:25:hayess
    DOI: 10.1515/rebs-2020-0101
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    References listed on IDEAS

    as
    1. Jörn Block & Lars Hornuf & Alexandra Moritz, 2018. "Which updates during an equity crowdfunding campaign increase crowd participation?," Small Business Economics, Springer, vol. 50(1), pages 3-27, January.
    2. Stanislav Mamonov & Ross Malaga, 2019. "Success factors in Title II equity crowdfunding in the United States," Venture Capital, Taylor & Francis Journals, vol. 21(2-3), pages 223-241, July.
    3. Anna, Petrenko, 2016. "Мaркування готової продукції як складова частина інформаційного забезпечення маркетингової діяльності підприємств овочепродуктового підкомплексу," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 2(1), March.
    4. Stanislav Mamonov & Ross Malaga & Janet Rosenblum, 2017. "An exploratory analysis of Title II equity crowdfunding success," Venture Capital, Taylor & Francis Journals, vol. 19(3), pages 239-256, July.
    5. Silvio Vismara, 2016. "Equity retention and social network theory in equity crowdfunding," Small Business Economics, Springer, vol. 46(4), pages 579-590, April.
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    More about this item

    Keywords

    equity crowdfunding; JOBS Act; Title II; ECF campaign success;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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