Crowdfunding, business angels, and venture capital: an exploratory study of the concept of the funding trajectory

The market for entrepreneurial finance has witnessed the arrival of new players (specifically, different types of crowdfunding platforms joining the more traditional forms of entrepreneurial finance such as BAs and VCs) over the last decade. Taking stock of this complexifying landscape, the present study explores the concept of a complex funding trajectory and its impact on the dynamics of nascent venture governance. Using a processual case-study design, we explore the particular funding trajectory of a young technology venture which went through different stages of a funding trajectory, successively combining different actors: reward based crowdfunding (RBC) first, then equity based crowdfunding (ECF) combined with business angels (BAs), finally followed by ECF combined with BAs and VCs. Our contribution to the literature is two-fold. The case makes an empirical contribution by deepening insights from prior quantitative studies on the determinants of follow-on funding after initial crowdfunding campaigns. The present study also makes a theoretical contribution by demonstrating that, beyond particular determinants of fundraising from various sources linked to initial venture characteristics and individual campaign attributes, the specific shape and sequencing of the overall funding trajectory plays a central role for the success of follow-on funding and the nascent governance of the young venture.