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Information Cascades among Investors in Equity Crowdfunding

Information Cascades among Investors in Equity Crowdfunding Finance studies on information cascades, usually in an initial public offering setting, typically differentiate between institutional and retail investors, as this is the only information available to potential backers. Information available through equity crowdfunding platforms includes details on individual investors as they may disclose information about themselves by linking their profile to social networks or websites. Using a sample of 132 equity offerings on Crowdcube in 2014, we show that information cascades among individual investors play a crucial role in crowdfunding campaigns. Investors with a public profile increase the appeal of the offer among early investors, who in turn attract late investors. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Entrepreneurship Theory and Practice SAGE

Information Cascades among Investors in Equity Crowdfunding

Entrepreneurship Theory and Practice , Volume 42 (3): 31 – May 1, 2018

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References (66)

Publisher
SAGE
Copyright
© 2016 SAGE Publications
ISSN
1042-2587
eISSN
1540-6520
DOI
10.1111/etap.12261
Publisher site
See Article on Publisher Site

Abstract

Finance studies on information cascades, usually in an initial public offering setting, typically differentiate between institutional and retail investors, as this is the only information available to potential backers. Information available through equity crowdfunding platforms includes details on individual investors as they may disclose information about themselves by linking their profile to social networks or websites. Using a sample of 132 equity offerings on Crowdcube in 2014, we show that information cascades among individual investors play a crucial role in crowdfunding campaigns. Investors with a public profile increase the appeal of the offer among early investors, who in turn attract late investors.

Journal

Entrepreneurship Theory and PracticeSAGE

Published: May 1, 2018

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