Equity crowdfunding is increasing in popularity as an alternative to traditional financing for start-ups and growth companies to raise money for their business. This study discusses how equity crowdfunding is different from traditional financing, such as angel investors and venture capitalists. We argue this difference is brought further into focus when large numbers of crowd members invest small amounts, as opposed to fewer individuals making large investments. Building on existing research on Social Identity Theory, we look at why some crowdfunding campaigns are more likely to attract these contrasting types of investment (numerous small investments or fewer large investments). A model is presenting linking different characteristics of campaigns to total investment and average investment. This proposed model will be tested using public data gathered from Crowdcube, a leading UK-based equity crowdfunding platform. This study has significant implications for fundraisers who may wish to target different types of crowds according to the nature of their business, i.e. smaller numbers of passionate investors to provide informed input or larger numbers of casual investors to help create awareness and spread positive word of mouth.
|Title of host publication||ECIS 2017 Proceedings|
|Number of pages||12|
|Place of Publication||Atlanta, GA|
|Publisher||Association for Information Systems. AIS Electronic Library (AISeL)|
|Publication status||Published - 2017|
|Event||The 25th European Conference on Information Systems (ECIS) 2017 - Centro Cultural Vila Flor, Guimarães, Portugal|
Duration: 5 Jun 2017 → 10 Jun 2017
Conference number: 25
|Conference||The 25th European Conference on Information Systems (ECIS) 2017|
|Location||Centro Cultural Vila Flor|
|Period||05/06/2017 → 10/06/2017|
- Equity crowdfunding
- Social identity
Nevin, S., Gleasure, R., O'Reilly, P., Feller, J., Li, S., & Christoforo, J. (2017). Large Crowds or Large Investments? How Social Identity Influences the Commitment of the Crowd. In ECIS 2017 Proceedings (pp. 2802-2813). Atlanta, GA: Association for Information Systems. AIS Electronic Library (AISeL).