Change search
ReferencesLink to record
Permanent link

Direct link
Quality Signals in Equity-based Crowdfunding
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Entrepreneurship and innovation.
2016 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

The current thesis explores a relatively new academic topic – equity-based crowdfunding. The purpose is to examine which quality signals, used by the entrepreneurs in their fundraising process, tend to increase the probability of closing an equity-based crowdfunding campaign successfully. The findings in this thesis serve as an additional contribution to a relatively unexplored topic of signaling in equity crowdfunding. Besides a theoretical contribution, it provides practical insights that may help entrepreneurs and crowdfunding platforms to increase the probability of successful campaign closure. The data for this study was collected from an international crowdfunding platform The explanatory variables, both continuous and binary, were divided into several thematic groups, while the dependent variable was defined by either successful or unsuccessful outcome of the campaign. The effect of the explanatory variables on the outcome of the campaign was tested with the help of the logistic regression (logit) model. The results showed that crowd investors in the network of use particular quality signals to distinguish between the projects, in fact, both financial signals and more qualitative signals. Increases in the financial signals such as funding goal and price per share affect the probability of success negatively, while the presence of the qualitative signals (received awards and the indication of the non-executive board) contribute to a higher probability of success. Secondly, the results imply some similarities between the selecting mechanism in traditional funding, reward-based and the equity-based crowdfunding. As a third point, this research shows that the presence of a specific selecting mechanism in crowdfunding helps to some extent decrease the information asymmetry and adverse selection in the market of crowdfunding.

Place, publisher, year, edition, pages
2016. , 48 p.
Examensarbete INDEK, 22
Keyword [en]
Equity-based crowdfunding, crowdfunding campaign, crowdfunding platform, signaling mechanism, quality signals, information asymmetry, adverse selection
National Category
Social Sciences Economics and Business Economics
URN: urn:nbn:se:kth:diva-188690OAI: diva2:938592
Educational program
Degree of Master - Economics of Innovation and Growth
2016-05-26, 09:00 (English)
Available from: 2016-11-02 Created: 2016-06-17 Last updated: 2016-11-02Bibliographically approved

Open Access in DiVA

fulltext(1040 kB)124 downloads
File information
File name FULLTEXT01.pdfFile size 1040 kBChecksum SHA-512
Type fulltextMimetype application/pdf

By organisation
Entrepreneurship and innovation
Social SciencesEconomics and BusinessEconomics

Search outside of DiVA

GoogleGoogle Scholar
Total: 124 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 210 hits
ReferencesLink to record
Permanent link

Direct link