The effect of lead investor’s human capital on funding performance: The moderating role of investment ambition

Abstract

We seek to determine the correlation between the human capital of lead investors and their funding performance within equity crowdfunding syndicates. We posit that the multi-faceted human capital of lead investors conveys their credibility and project quality. Using data derived from a sample of 157 individual lead investors on AngelList, we find that lead investors with higher levels of investment experience and entrepreneurial experience display improved funding performance. The research also highlights that lead investors’ investment ambitions moderate the effects of work experience and managerial experience on their funding performance. However, educational level and Ivy League education do not lead to significant effects on lead investors’ funding performance. This article contributes to the ongoing discussion on the role of human capital in crowdfunding by offering a multi-faceted view from an investor’s perspective.