Exploring the Impact of Initial Herd on Overfunding in Equity Crowdfunding

Yijing Li, Albert Fei Liu, Wenjie Fan*, Eric T.K. Lim, Yong Liu

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review


Outcome of equity crowdfunding campaigns often exceeds original fundraising goals, leading to market inefficiency. This undesirable phenomenon of overfunding garnered little attention in past studies. Synthesizing extant literature on crowdfunding and herding, we identified the initial herd made visible by funding progress indicator as the main cause of overfunding. The impact of the initial herd can be quantified by three dimensions: maturity, intensity, and persistency. We then advance and validate a research model for examining how dimensions of the initial herd affect overfunding in equity crowdfunding. Findings from this study can shed light on plausible remedies for the overfunding issue.
Original languageEnglish
Article number103269
JournalInformation & Management
Issue number3
Number of pages10
Publication statusPublished - Apr 2022

Bibliographical note

Published online: 15 January 2020.


  • Crowdfunding
  • Herd
  • Herding behavior
  • Overfunding

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