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Which information should entrepreneurs on German crowdinvesting-platforms disclose?

Author

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  • Mäschle, Oliver

Abstract

The disclosure requirements for firms issuing equity on German crowdinvestingplatforms are quite lax at the moment. This paper states that this loose requirement policy is not optimal in the presence of competition among platforms. First, a simple three-staged theoretical model is derived to demonstrate that competition among the platforms should result in a maximization of disclosure requirements. Second, characteristics about firms and entrepreneurs that should be revealed are identified because they have an empirically verified effect on the risk-return-profile of a company. Third, a recommendation for the practical implementation of improved disclosure requirements is offered.

Suggested Citation

  • Mäschle, Oliver, 2012. "Which information should entrepreneurs on German crowdinvesting-platforms disclose?," Thuenen-Series of Applied Economic Theory 127, University of Rostock, Institute of Economics.
    • Handle: RePEc:zbw:roswps:127
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    More about this item

    Keywords

    crowdinvesting; market microstructure; disclosure requirements; equity; asymmetric information; entrepreneur;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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