Success Drivers of Equity Crowdfunding: A Study in the UK Market

Abstract

Crowdfunding is an innovative fundraising practice witnessing phenomenal development over the last decade. The UK is the biggest crowdfunding market in Europe in terms of market share, number of platforms and funders (Rossi, 2014). However, this phenomenon in this market is still understudied, especially equity crowdfunding. Drawing on a relative big sample data in the UK market, our research makes two main contributions to the current limited literature on equity crowdfunding. First, our study finds that investment criteria traditionally used by venture capital and business angel investors can be success predictors of equity crowdfunding campaigns. Second, our research confirms findings in prior studies that pre-determined campaign characteristics such as funding target, campaign duration, the provision of financials and the use of social networks can be success drivers of equity crowdfunding campaigns. These findings have numerous implications for actors in equity crowdfunding, including practitioners, policy makers and regulators.