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Decoding the success of equity crowdfunding: investment decisions of professional and non-professional investors

Author

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  • Enrico Battisti

    (University of Turin)

  • Ciro Troise

    (University of Turin)

  • Antonio Salvi

    (University of Turin)

  • Michael Christofi

    (Cyprus University of Technology)

Abstract

This paper investigates the investment decisions of professional and non-professional investors and the role of three classes of factors, i.e. Corporate Social Responsibility (CSR) orientation, human capital, and composition of ownership, in influencing the performance of equity crowdfunding campaigns, measured in terms of funding collected (in %), final investors involved and the funding amount raised (in €). The quantitative study is focused on the Italian equity crowdfunding market since Italy has been the first country in Europe to regulate this specific model and professional investors are required by law, thus allowing to compare the two classes of investors. Using a sample of 232 campaigns on the two leading Italian ECF platforms, empirical estimates based on regression analyses show that all the three classes of factors determine (or not) the campaigns’ success, and the overall performance is determined by non-professional investors’ orientation. Specifically, our results highlight that CSR orientation does not play a significant role in driving the success of equity crowdfunding campaigns, unlike the human capital and the compositions of ownership.

Suggested Citation

  • Enrico Battisti & Ciro Troise & Antonio Salvi & Michael Christofi, 2024. "Decoding the success of equity crowdfunding: investment decisions of professional and non-professional investors," Review of Managerial Science, Springer, vol. 18(12), pages 3545-3573, December.
    • Handle: RePEc:spr:rvmgts:v:18:y:2024:i:12:d:10.1007_s11846-024-00725-5
    DOI: 10.1007/s11846-024-00725-5
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    More about this item

    Keywords

    Composition of ownership; CSR orientation; Equity crowdfunding; Human capital; Non-professional investor; Professional investor;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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