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Tapping of the crowd: The effect of entrepreneur engagement on equity crowdfunding success

Author

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  • Sarah Borchers

    (University of Nebraska)

  • Lee M. Dunham

    (Creighton University)

Abstract

Using a hand collected dataset of equity crowdfunding offerings from after the passage of Title III of the JOBS Act in the United States, we examine how an entrepreneur’s engagement with the crowd impacts the overall campaign’s success. We document that entrepreneur on-platform engagement with potential investors during a crowdfunding campaign significantly and positively impacts campaign success, after controlling for a host of factors previously documented to explain campaign success.

Suggested Citation

  • Sarah Borchers & Lee M. Dunham, 2022. "Tapping of the crowd: The effect of entrepreneur engagement on equity crowdfunding success," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 46(2), pages 324-346, April.
    • Handle: RePEc:spr:jecfin:v:46:y:2022:i:2:d:10.1007_s12197-021-09567-3
    DOI: 10.1007/s12197-021-09567-3
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    References listed on IDEAS

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    1. Massimo G. Colombo & Chiara Franzoni & Cristina Rossi–Lamastra, 2015. "Internal Social Capital and the Attraction of Early Contributions in Crowdfunding," Entrepreneurship Theory and Practice, , vol. 39(1), pages 75-100, January.
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    3. 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.
    4. Jermain Kaminski & Christian Hopp & Christian Lukas, 2018. "Who benefits from the wisdom of the crowd in crowdfunding? Assessing the benefits of user-generated and mass personal electronic word of mouth in computer-mediated financing," Journal of Business Economics, Springer, vol. 88(9), pages 1133-1162, December.
    5. Thies, Ferdinand & Wessel, Michael & Benlian, Alexander, 2014. "Understanding the Dynamic Interplay of Social Buzz and Contribution Behavior within and between Online Platforms – Evidence from Crowdfunding," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 66131, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    6. 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.
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    Cited by:

    1. KURIHARA Koki & HONJO Yuji, 2022. "Determinants of Campaign Success: Empirical evidence from equity crowdfunding in Japan," Discussion papers 22057, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    Crowdfunding; Equity crowdfunding; JOBS Act; Title II; Title III;
    All these keywords.

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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