Entrepreneurship and Equity Crowdfunding: Does It Matter?

Ciro Troise

doi:10.5539/ijbm.v14n10p72

Abstract

This study aims to explore how entrepreneurship, i.e. the three well-known dimensions of entrepreneurial orientation (EO) (innovativeness, risk taking and proactiveness), affects equity crowdfunding (ECF) performance. Many contributions in the entrepreneurship literature suggested that the entrepreneurial process is incomplete with the creation of a new venture. In this vein, the present paper focuses on the company&rsquo;s fundraising capability, a stage that follow the establishment of a new business. Empirical regression analyses were performed and the sample consists of 134 projects collected from seven Italian platforms. Interesting successful drivers, belonging to the EO sphere, emerge from the study. Findings show statistically significant influence of the three exploratory variables: product innovation (as expression of innovativeness) and planning (as expression of proactiveness) positively affect ECF performance, while equity offered (as expression of risk taking propensity) has a negative impact. Scholars have little knowledge about the role of entrepreneurship in the ECF context, this study sheds some light on the importance of entrepreneurial aspects. The originality of this study lies both in the entrepreneurial framework and in the factors analyzed. The insights could have interesting implications for entrepreneurs, platform managers, investors and policy makers.

Highlights

In recent decades, there has been a significant diffusion of entrepreneurship and this era is defined as the ‘entrepreneurial age’ (Bygrave, 2004)
In this new research stream of entrepreneurship, many studies supported the importance of the post-creation lives of new ventures and that the entrepreneurial process continues after establishing a new venture
The present study shows new variables perceived as quality signals and provides evidence that entrepreneurship plays a key role in the success of equity crowdfunding (ECF) campaigns

Summary

Introduction

There has been a significant diffusion of entrepreneurship and this era is defined as the ‘entrepreneurial age’ (Bygrave, 2004). Despite the strong focus on new venture creation, a growing number of scholars embrace the idea that the entrepreneurial process does not end with the establishment of the company (Brockner et al, 2004; Cardon et al, 2005; DeTienne, 2010; Shane & Venkataraman, 2000). In this new research stream of entrepreneurship, many studies supported the importance of the post-creation lives of new ventures and that the entrepreneurial process continues after establishing a new venture. A number of scholars suggested that the entrepreneurial process is not complete without considering the future phases following the creation of the new venture, such as the entrepreneurial exit (DeTienne, 2010), the opportunity identification (Shane & Venkataraman, 2000), company growth or procuring resources (Brockner et al, 2004; Cardon et al, 2005)

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Conclusion