Contacts on LinkedIn: equity crowdfunding platforms' networks and creators' innovation performance

Purpose - The purpose of this paper is to explore whether and how the innovation performance of start-ups and small and medium-sized enterprises (SMEs) that collect funds using equity crowdfunding (EC), i.e. creators (or proponents), and the EC performance are influenced by the social media networks (SMNs) in which EC platforms' managers and firms exchange their ideas with investors and customers. Design/methodology/approach - The empirical analysis is conducted on a sample composed by all the creators that collected funds in EC platforms over the three-year period 2018–2020. For each creator, the innovation performance is computed as the percentage of sales from new or significantly improved product and services compared to total sales of firm. For each campaign, the EC performance is considered as the ratio between the total amount of funding raised at the end of the campaign and the target capital for the campaign. To investigate EC platform social media activity, LinkedIn profiles of EC platforms managers are analyzed using the social network analysis (SNA) methodology, which permits to observe the quantity and the quality of managers' interactions with other users. A regression analysis is thus performed to observe the relationship between managers' LinkedIn activities, EC performance and creators' innovation performance. Findings - Data reveal that EC platforms managers display different activities in networking, with some individuals more active than others and more oriented to interact with business profiles rather than personal ones. The variables related to managers' LinkedIn activities are shown to impact both on the EC performance and on the ability of creators to innovate, suggesting the existence of a link between creators, EC platforms and the activity of the subject who manages it. Originality/value - The present study is the first to examine the link between the ability of creators to innovate and SMNs, focusing on the social links of platforms managers and considering the LinkedIn social media; moreover, the analysis is conducted analyzing the quality of the interactions in addition to their number. The study is original also in that rather than focusing on specific EC platforms it considers all those purposefully authorized by the Italian financial market supervisory authority over a three-year time span. From a managerial point of view, the observation of the relevance of social networks by personnel with specific professional skills reveals it can be a successful driver for operators in the sector, not only to safeguard their reputation, but to stimulate the processes of co-creation of value that is essential in the crowdfunding market.