Social Identity and Social Media Activities in Equity Crowdfunding

The existence of crowdfunding platforms has helped creators to bring their innovative products to market. In recent years, equity crowdfunding has increased in popularity as an alternative form of finance, and has helped thousands of innovating entrepreneurs to raise money, and join a broader conversation with large numbers of potential investors. Early-stage startup investment is no longer restricted to venture capital firms and high net worth angel investors. Using Social Identity Theory (SIT) as a basis, we look at a sample of crowdfunding campaigns from the UK-based platform, Crowdcube. In this study we are trying to understand how groups of potential crowdfunding investors act in relation to the social media activities of those campaigns. We examine how different social media activities of can have an impact upon the funding of a crowdfunding campaign. This study has significant implications for fundraisers who want to utilize social media to increase their chances of a successful crowdfunding campaign. In our study we identify that by being more active on social media, and having a higher level of engagement with the crowd, this will have a positive impact on the overall funding of a crowdfunding campaign.