Abstract
Equity crowdfunding platforms allow only a fraction of ventures to launch campaigns. This first quantitative study of how platforms evaluate the quality of applicants uses an experimental conjoint analysis. It applies signaling theory to investigate whether patents, team experience, sales alliances, and venture capital backing result in positive evaluations by platforms. All four criteria matter; team experience matters most. The authors also randomly assign platform decision makers to evaluate firms from high-tech industries with high levels of information asymmetry and from mainstream industries. The only difference that emerges is that decision makers attach significantly greater importance to sales alliances of mainstream companies than of high-tech companies.
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