Do Venture Capitalists Follow the Crowd? - The Relevance of Crowdfunding Campaigns for Venture Capitalists' Investment Decision

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Referenz

Thies, F., Huber, A., Bock, C., & Benlian, A. (2017). Do Venture Capitalists Follow the Crowd? - The Relevance of Crowdfunding Campaigns for Venture Capitalists' Investment Decision. Presented at the EURAM Annual Conference, Glasgow, Scotland.

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Präsentation auf wissenschaftlicher Konferenz

Abstract

By cross-referencing a proprietary dataset of 66,000 crowdfunding campaigns that ran on Kickstarter between 2009 and 2016 with 100,000 investments in the same period from the Crunchbase dataset, we assess whether and how crowdfunding campaign-specific signals that affect campaign success influence venture capitalists’ decision-making in the funding process after demanding crowdfunding. Drawing on signaling theory and the microfinance literature, our empirical findings reveal that a crowdfunding campaign that reached its funding goal has a 124% higher chance to receive follow-up venture capital financing. Further, we find statistical evidence that an endorsement by the platform provider has a likewise positive impact on the receipt of VC. Contrary to our expectations, word-of-mouth volume seems to be a negligible factor when it comes to follow-up VC financing. Our results support the view that venture capitalists partly rely on the decision of the crowd in order to evaluate the potential of the entrepreneurial initiative.

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Einrichtungen

  • Institut für Entrepreneurship
  • Lehrstuhl für Entrepreneurship und Technologie

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