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The role of platform stakes in equity crowdfunding success

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  • Johan, Sofia
  • Reardon, Robert S.

Abstract

This study examines the influence of platform characteristics — ownership stakes and underwriting fees — on the outcomes of equity crowdfunding campaigns and their ability to attract subsequent funding. Analyzing data from 2016 to 2022 across all U.S. equity crowdfunding platforms, our findings reveal that while platform ownership stakes positively correlate with immediate campaign success and follow-on funding, underwriting fees negatively impact success. However, these correlations weaken or reverse when analyzing the varying stakes taken within an individual platform like Wefunder and StartEngine. The findings highlight the importance of using multiple platforms in analyzing the impact of platform stakes on success.

Suggested Citation

  • Johan, Sofia & Reardon, Robert S., 2024. "The role of platform stakes in equity crowdfunding success," Finance Research Letters, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324011267
    DOI: 10.1016/j.frl.2024.106097
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    References listed on IDEAS

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    Cited by:

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    2. Farè, Luca & Meoli, Michele & Vismara, Silvio, 2024. "Sustainable crowdfunding and cultural contexts: Evidence from a longitudinal multi-country analysis," Finance Research Letters, Elsevier, vol. 70(C).

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    More about this item

    Keywords

    Equity crowdfunding; Fintech; Financial Intermediation; Platforms;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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