The role of crowdfunding in reducing the equity gap in Poland

Michał Łukowski,Piotr Zygmanowski

doi:10.14746/rpeis.2019.81.3.12

Michał Łukowski, Piotr Zygmanowski

Open Access

https://doi.org/10.14746/rpeis.2019.81.3.12

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Abstract

The aim of the paper is to verify if equity crowdfunding has an impact on equity gap reduction among early stage companies in Poland. The analysis is based on crowdfunding campaigns organized on the three most popular platforms in Poland during the 2015–2019 period. The presented research on equity crowdfunding allowed the main goal of the paper to be accomplished, namely to characterize equity crowdfunding in Poland. The results obtained also enabled equity crowdfunding to be placed among other equity capital sources for companies in the early stages of development. The results of the study verify the hypothesis that equity crowdfunding has an impact on equity gap reduction among Polish early stage companies. Our key findings prove that equity crowdfunding in Poland is mainly used by relatively small, early stage companies that operate in various sectors. Another finding is that most of the companies raised capital that qualifies as the Macmillan gap. We also proved that there is a relatively high level of information asymmetry among equity crowdfunding campaigns and provided our own definition of equity crowdfunding.

Highlights

Technology changes the way financial intermediaries act
The presented research on equity crowdfunding allowed the main goal of the paper to be accomplished, namely to characterize equity crowdfunding in Poland
The obtained result enabled equity crowdfunding to be placed among other capital sources and confirmed the hypothesis that equity crowdfunding influences the reduction of the equity gap among Polish early stage companies

Summary

Introduction

Technology changes the way financial intermediaries act It is noticeable especially in Western European countries, both in the banking sector (for example Revolut or N26) and the capital market sector, where the use of equity crowdfunding platforms (for example Seeders and Crowdcube) by early stage companies for capital raising is becoming increasingly popular. The growing importance of equity crowdfunding has made it the subject of many studies, such as those carried out by Agrwal, Catalini and Goldfarb,[1] or Ashlers, Cumming, Guenther and Schweizer.[2] This technological revolution has reached the Polish capital market with the recent regulation from 21 April 2018, which allows public offerings up to EUR1 million to be carried out without a prospectus or memorandum.

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