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Strategic entrepreneurial choice between competing crowdfunding platforms

Coakley, Jerry and Lazos, Aristogenis and Liñares-Zegarra, Jose (2022) 'Strategic entrepreneurial choice between competing crowdfunding platforms.' The Journal of Technology Transfer, 47 (6). pp. 1794-1824. ISSN 0892-9912

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Abstract

This paper investigates strategic entrepreneurial choice between the UK Big 3 platforms–Crowdcube, Seedrs and SyndicateRoom–that exemplify the three main equity crowdfunding (ECF) shareholder structures identified in the literature. ECF has become a strategic choice for both entrepreneurs and angel and venture capital funds as it offers mutually beneficial advantages to both, especially under the co-investment ECF model where these funds co-invest alongside the crowd. The multinomial probit results show that large founder teams are more likely to choose the co-investment model (SyndicateRoom) but are less likely to opt for the nominee ownership structure (Seedrs). Although less heterogeneous teams are more likely to choose the Seedrs and Crowdcube ownership structures, our results suggest that the probability of choosing the co-investment model (SyndicateRoom) monotonically increases as teams become more heterogeneous. The conclusion is that larger and heterogeneous teams are more likely to raise ECF funds from campaigns explicitly involving professional investors.

Item Type: Article
Uncontrolled Keywords: Equity crowdfunding; Founder team; Platforms; Shareholder structures
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 11 Nov 2021 14:09
Last Modified: 30 Nov 2022 07:24
URI: http://repository.essex.ac.uk/id/eprint/31344

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