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Working Paper

Harnessing the Crowd: The Demand-Side Dynamics of Equity Crowdfunding in Nascent Entrepreneurial Ventures

Citation
Brown R, Mawson S, Rowe A & Mason C (2015) Harnessing the Crowd: The Demand-Side Dynamics of Equity Crowdfunding in Nascent Entrepreneurial Ventures. Working papers in responsible banking and finance, 15-009. http://www.st-andrews.ac.uk/business/rbf/workingpapers/RBF15_009.pdf

Abstract
Equity crowdfunding has rapidly established itself as an important part of the funding landscape for entrepreneurial ventures. However, little is known about the ‘demand’ for equity crowdfunding. This paper reports on a large-scale study of UK equity crowdfunded firms. The study found strong demand for equity crowdfunding from entrepreneurs in consumer-focused, early stage firms. Many were ‘discouraged borrowers’, attracted by the ability to obtain finance quickly with little diminution in their equity or autonomy. Crowdfunding also seems to confer important intangible benefits to investee companies, in terms of firm valuation and product validation. Implications for theory and future research are outlined.

Keywords
Entrepreneurship; Entrepreneurial Finance; Crowdfunding; Equity Funding; New Ventures; High Growth

StatusUnpublished
Author(s)Brown, Ross; Mawson, Suzanne; Rowe, Alexander; Mason, Colin
Title of seriesWorking papers in responsible banking and finance
Number in series15-009
Publication date online31/07/2015
URLhttp://hdl.handle.net/1893/23315
PublisherUniversity of St Andrews
Publisher URLhttp://www.st-andrews.ac.uk/…rs/RBF15_009.pdf
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