Access to digital finance: equity crowdfunding across countries and platforms

Estrin, Saul ORCID: 0000-0002-3447-8593, Khavul, Susanna, Kritikos, Alexander S. and Löher, Jonas (2024) Access to digital finance: equity crowdfunding across countries and platforms. PLOS ONE, 19 (1). ISSN 1932-6203

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Abstract

Financing entrepreneurship spurs innovation and economic growth. Digital financial platforms that crowdfund equity for entrepreneurs have emerged globally, yet they remain poorly understood. We model equity crowdfunding in terms of the relationship between the number of investors and the amount of money raised per pitch. We examine heterogeneity in the average amount raised per pitch that is associated with differences across three countries and seven platforms. Using a novel dataset of successful fundraising on the most prominent platforms in the UK, Germany, and the USA, we find the underlying relationship between the number of investors and the amount of money raised for entrepreneurs is loglinear, with a coefficient less than one and concave to the origin. We identify significant variation in the average amount invested in each pitch across countries and platforms. Our findings have implications for market actors as well as regulators who set competitive frameworks.

Item Type:	Article
Official URL:	https://journals.plos.org/plosone/
Additional Information:	© 2024 The Authors
Divisions:	Management
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management H Social Sciences > HG Finance
JEL classification:	D - Microeconomics > D2 - Production and Organizations > D20 - General O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O30 - General
Date Deposited:	09 Jan 2024 14:00
Last Modified:	01 Apr 2024 08:40
URI:	http://eprints.lse.ac.uk/id/eprint/121226

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