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It Is Not All About Money: Obtaining Additional Benefits Through Equity Crowdfunding

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  • Andreas Wald
  • Merete Holmesland
  • Kalanit Efrat

Abstract

Equity crowdfunding allows entrepreneurs to directly access financing from a large number of investors via Internet platforms. Recent research has started to examine additional, non-financial benefits of crowdfunding campaigns. This article connects to this emerging research stream by investigating these additional benefits while discussing their potential to contribute to the success of equity crowdfunding projects. Building on interviews with entrepreneurs and investors from Norway and Israel, we find that the benefits offered by investors to entrepreneurs can be divided into two categories: inward benefits and outward benefits. The latter are aimed at increasing public exposure and advancing the project’s success by recruiting additional investors. By contrast, inward benefits are implemented through investors’ contributions of personal experience and expertise. These benefits are aimed at the entrepreneurs and, when harnessed, can become resources that advance future success. We also find that investors receive personal gain by participating in crowdfunding, which takes the form of personal growth and the development of social capital. These benefits are based on intrinsic motives and complement the financial returns, which are more related to extrinsic motives.

Suggested Citation

  • Andreas Wald & Merete Holmesland & Kalanit Efrat, 2019. "It Is Not All About Money: Obtaining Additional Benefits Through Equity Crowdfunding," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 28(2), pages 270-294, September.
    • Handle: RePEc:sae:jouent:v:28:y:2019:i:2:p:270-294
    DOI: 10.1177/0971355719851899
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    References listed on IDEAS

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    Cited by:

    1. Semen Son Turan, 2021. "Uncovering trust signals in equity crowdfunding: A systematic literature review," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(4), pages 215-225, June.
    2. Francesca Pietro, 2021. "The rationale for listing on equity crowdfunding: actual and expected benefits for companies," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(4), pages 527-549, December.
    3. Ciro Troise & Enrico Battisti & Michael Christofi & Nina Jorien Vulpen & Shlomo Tarba, 2023. "How Can SMEs Use Crowdfunding Platforms to Internationalize? The Role of Equity and Reward Crowdfunding," Management International Review, Springer, vol. 63(1), pages 117-159, February.
    4. Swati Gupta & Sahil Raj & Sanjay Gupta & Ajay Sharma, 2023. "Prioritising crowdfunding benefits: a fuzzy-AHP approach," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(1), pages 379-403, February.
    5. Camilla Civardi & Andrea Moro & Joakim Winborg, 2024. "“All that glitters is not gold!”: The (Unexplored) Determinants of Equity Crowdfunding," Small Business Economics, Springer, vol. 63(1), pages 299-324, June.
    6. Shneor, Rotem & Zhao, Liang & Fabian Michael Goedecke, Jann, 2023. "On relationship types, their strength, and reward crowdfunding backer behavior," Journal of Business Research, Elsevier, vol. 154(C).
    7. Gallucci, Carmen & Giakoumelou, Anastasia & Santulli, Rosalia & Tipaldi, Riccardo, 2023. "How financial literacy moderates the relationship between qualitative business information and the success of an equity crowdfunding campaign: Evidence from Mediterranean and Gulf Cooperation Council ," Technology in Society, Elsevier, vol. 75(C).
    8. Serwaah, Priscilla & Shneor, Rotem & Nyarko, Samuel Anokye & Nielsen, Kristian Roed, 2024. "Explaining gender differences in crowdfunding contribution intentions," Technology in Society, Elsevier, vol. 76(C).
    9. Kalanit Efrat & Shaked Gilboa, 2020. "Relationship approach to crowdfunding: how creators and supporters interaction enhances projects’ success," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(4), pages 899-911, December.

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