This study investigates the start-up firm’s optimal decision in multi-round equity and debt portfolio crowdfunding financing and the design of risk-sharing mechanism. A crowdfunding platform serves as an intermediary between a start-up firm with limited initial capital and external investors seeking debt and equity investments. When the funding target is not met, the crowdfunding platform provides loans to bridge the start-up firm’s capital gap, which also gives chance to adjust its capital structure. Firstly, a decision-making model is established to derive optimal financing strategies for a startup firm and a crowdfunding platform, while also derived the financing ratio between equity and debt crowdfunding channels. A numerical analysis further examines how key parameters—such as fundraising rate and loan interest rate—affect the startup’s capital structure. More importantly, a novel debt-to-equity swap arrangement (DTE) is proposed for sharing debt risk between the start-up firm and the platform. The findings reveal that startup firms primarily rely on equity crowdfunding when the fundraising rate is moderate, while the low fundraising rate leads to a single equity crowdfunding approach. Similarly, the high loan interest rate drive startup firms to favor equity crowdfunding, whereas low rates may prompt platform to discontinue loans, leaving startup firms to rely solely on equity financing. Additionally, the DTE facilitates coordination among parties requires balanced adjustments from platforms (moderate commission rates), startup firm (capital structure optimization), and investors (appropriate success rates) to ensure effective risk-sharing and profit distribution.

ABSTRACT Contrary to the mainstream view that crowdinvestors make investment decisions for utilitarian motives like financial returns, this study suggests that making an investment decision in equity crowdfunding is multifaceted. Drawing on Self‐Determination Theory and incorporating insights from Prospect Theory, the research is based on 15 semi‐structured interviews with crowdinvestors from the US and Europe, representing nine equity crowdfunding portals. With the aim of exploring the psychological dimensions underpinning the motivation in their investment decisions, through a combination of thematic and framework analysis, the study found that psychological dimensions of motivation like personal agency, eudaimonic well-being and self-transcendence influence the decision to participate in equity crowdfunding fostering self-efficacy, self-actualisation and social wellness; that is, they provide a sense of self-endorsement to take on the risk associated with an investment choice. The study proves that such self-validation acts as a form of cognitive reappraisal to make decisions in uncertain contexts. It contributes to literature by extending prior applications of Self-Determination Theory to equity crowdfunding through new empirical insights on the psychological factors behind investor motivations. Also, the study for the first time combines SDT with Prospect Theory while providing actionable insights for leveraging communication tools that foster investor agency and active participation.

This study investigates the impact of equity crowdfunding on significant infrastructure projects in Indonesia, with a focus on those that fall under the regulatory framework outlined in POJK No. 37/POJK.04/2018. It addresses the following research question: How does equity crowdfunding contribute to Indonesia's infrastructure financing? Its narrow focus on the use of crowdfunding for infrastructure fills a gap in the literature, which often lacks empirical research unique to Indonesia. Using a mixed-method approach that combines qualitative insights from stakeholder interviews with quantitative analysis of crowdfunding data, the study finds that although equity crowdfunding has the potential to mobilize capital for infrastructure, obstacles include investor protection, regulatory compliance, and project scalability. The study emphasizes the crucial role of regulatory frameworks and specially designed financial products in determining the outcomes of crowdfunding. In the end, the study recommends changing policy to create an atmosphere that is favorable to crowdfunding, improving financial, and aiding Indonesia's sustainable development goals.

Investor characteristics can influence preferences for entrepreneurial investment opportunities, with gender playing a crucial role. Using webcam-based eye-tracking, this study examines the attentional mechanism underlying gender homophily, a tendency to prefer projects led by entrepreneurial teams of one’s own gender, in equity crowdfunding (EC). Results confirm gender homophily among female investors, who fixate more quickly and look longer at entrepreneurial teams’ gender composition. Such a tendency is moderated by their financial knowledge with inexperience females showing a stronger effect. These findings support a top-down attentional control process, where attention is guided by goal-oriented selection of specific information rather than a bottom-up, stimulus-driven response. Mediation analyses further reveal that increased attention towards female-led teams significantly influences female investors’ investment preferences, linking attentional biases to decision outcomes. Male investors do not exhibit comparable gender-based effects. This study advances the understanding of how selective signal processing, shaped by investors’ endogenous characteristics such as gender and financial knowledge, influences investment decisions. Our results offer new insights into gender dynamics in entrepreneurial finance, elucidating the cognitive foundations of investor behavior and offering practical implications for EC platform designs and financial literacy interventions.Supplementary InformationThe online version contains supplementary material available at 10.1038/s41598-025-25732-8.

This paper aims to evaluate the expectations of potential investors in Mudharabah-based crowdfunding. It is a qualitative study involving semi-structured interviews with potential capital providers or rabb al-mal about the possibility of implementing Mudharabah-based crowdfunding in Malaysia. The data are analyzed using thematic analysis. The results show that potential capital providers in Mudharabah-based crowdfunding are willing to invest if the investment platform is regulated. Despite the higher risk of losing the invested capital due to conditions in the Mudharabah contract, as long as both parties, mudharib and rabb al-mal, agree, Mudharabah-based crowdfunding could become a reality. Additionally, as typical investors, capital providers are believed to know and are expected to make the best investment decisions. However, even a smart investor can make mistakes due to cognitive biases, like believing the future will be as easy as the past. The study is limited because it focuses only on Malaysia, especially since Equity Crowdfunding (ECF) is still a new industry. Also, the number of interviewees is small because of convenience sampling. Nonetheless, the findings may still be valuable as this study is exploratory. Positive feedback from respondents can encourage regulators to take more serious actions to develop regulations for Mudharabah-based crowdfunding. Moreover, this funding option could be an alternative way for small and medium enterprises (SMEs) to raise the capital needed for growth. Mudharabah-based crowdfunding could potentially benefit SMEs and promote the brotherhood concept as outlined in the Shariah objectives in finance. While many studies focus on regulators, Shariah experts, and business owners, this research gathers insights from capital providers. It also highlights the challenges faced by these providers in Mudharabah-based crowdfunding.

Digital finance platforms are disrupting traditional financial entities (FEs). Yet, FEs increasingly invest in their ownership. We investigate whether FE ownership creates a “top-shelf blend” that enhances platform performance or a “sour mix” that undermines it. We integrate legitimacy theory and organizational identity theory to theorize an inverted U -shaped relationship between FE ownership and the performance of equity crowdfunding (ECF) platforms. A longitudinal analysis based on 306 ECF platforms demonstrates that FE ownership enhances performance up to a certain point, after which performance declines. The legitimacy of FEs owning ECF platforms moderates this relationship.

This study innovatively integrates signaling theory with information cue theory to examine the diagnosticity of various information cues in predicting equity crowdfunding success. Analyzing data from 144 campaigns on China's Dreammove platform (2014-2019) through five machine learning models, we find that quantitative information cues are most predictive of funding success. Narrative cues also hold diagnostic value, albeit to a lesser extent, while visual cues are limited in their predictive capacity. Employing Shapley Additive exPlanations (SHAP) interpretability, we identify larger entrepreneurial teams, ambitious funding targets, concise, accessible narratives, and modest visual elements like youthfulness and clarity enhance campaign appeal. This research advances the understanding of how investors process information in equity crowdfunding, offering new insights by moving beyond single-dimensional analyses and providing practical guidance for entrepreneurs and investors in emerging crowdfunding markets.

ABSTRACT Secondary‐market data on 1189 crowdfunding campaigns, extracted from the leading UK equity crowdfunding platform Seedrs, is used to identify the determinants of amount invested. A key feature of the dataset is that only successful campaigns are observed. For this reason, we depart from previous literature by applying the truncated regression estimator instead of ordinary least squares regression. We cluster at the company level in order to allow for multiple campaigns per company. The importance of allowing for truncation is confirmed using the Hausman test. Moreover, allowing for truncation alters the conclusions arising from previous literature concerning the effects of standard variables, including target amount, amount of equity offered, and number of team members participating in the venture. Quadratic terms are introduced in order to identify “sweet spots.” Textual dummies are included in order to identify words that enhance investor appeal. The Linktest misspecification testing procedure confirms the validity of our final model.

We study investment syndication on an equity crowdfunding platform where experts (syndicate leads) curate and invest in early-stage firms on behalf of other investors in exchange for shared profit. We provide evidence that this model outperforms direct investments, especially for non-Californian startups with less publicly available information. Additional analyses suggest the better performance comes from reduced asymmetric information and lower transaction costs through better access to quality deals and lower effort for evaluating and monitoring startups. Using a large-scale field experiment, we find that investors are more likely to explore syndicate leads’ profiles when provided information about their network size and favorable track record, suggesting that investors value these two attributes when evaluating leads. A survey of 44 active investors shows that large networks are perceived as signals of access to quality deals, reputation, and due diligence, while track record is perceived as a signal of leads’ ability and a direct measure of success. These findings suggest that the syndication model can enhance market efficiency in equity crowdfunding and that emphasizing leads’ professional networks and past performance can be an effective strategy for increasing adoption of the model. • Syndication in equity crowdfunding provides better performance than direct investments. • Experts identify “hidden gems”: high-potential startups outside California. • Investors evaluate experts on network and track record, based on a field experiment. • Market designers may consider creating a market for curation with proper incentives.

ABSTRACT This study reviews equity crowdfunding (ECF) research using sequential bibliometric (528 articles) and content analyses (59 articles) to consolidate the knowledge in the high scholarly interest ECF literature. It tracks publication growth and significant contributors to the ECF's theoretical and empirical evolution as an alternative early‐stage entrepreneurial finance funding source. Clusterwise content analysis focuses on ECF evolution, campaign and venture success factors, entrepreneurial and investor motivation, returns, evolving regulatory frameworks and challenges, the role of platforms, gender issues, and sustainability. It contributes to understanding ECF evolution in multiple contexts: strengthening startup and innovation ecosystems, information asymmetry and credible signals, ease of access to startup financing versus investor protection, and implications for conventional startup financing alternatives (i.e., angel and venture capital) and other forms of crowdfunding (e.g., reward‐based crowdfunding). This study offers clusterwise future research directions that serve as a guiding light for scholars to research further. This study benefits entrepreneurs, investors, regulators, and policymakers by understanding the nuances of the current state of the ECF ecosystem and the way forward.

This study proposes a data envelopment analysis (DEA) model to evaluate the efficiency of small and medium-sized companies (SMEs) in equity crowdfunding platforms. Three input and output variables were used to measure the efficiency of the sample companies. The results of the DEA method highlighted the companies that achieved full efficiency, representing the limits of efficiency in the BCC model with the Variable Returns to Scale (VRS) theory, which demonstrates the companies' ability to utilize resources efficiently. The model also identified companies that did not achieve efficiency and were located outside the efficiency limits, indicating that these companies have issues in utilizing their resources. It is recommended that small and medium-sized enterprises on equity crowdfunding platforms adopt the Data Envelopment Analysis method periodically for efficiency measurement and future resource utilization planning.

The paper examines accent-based discrimination against entrepreneurs during the fundraising phase. Specifically, the paper focuses on audible minorities in U.S.—naturalized citizens and permanent residents who speak with a foreign accent—who try to raise capital for their venture on equity crowdfunding platforms. The paper develops a theoretical model linking accent, stereotypes, venture quality assessments and crowdfunding performance. The model is tested using data collected through an online experiment. The findings illuminate the obstacles that nonnative speakers face as they embark on the entrepreneurial journey and reveal future research opportunities. The paper contributes to research on atypical entrepreneurship and to entrepreneurial financing.

Purpose Equity crowdfunding is an increasingly vital source of financing for startup companies. To attract early investors and take advantage of an observed herding effect in online crowdfunding, platforms have introduced the promotional strategy of “early bird” terms (EBT). Based on signaling theory, we investigate the influence EBT has on crowdfunding performance and post-investment engagement, and the moderating role of valuation. Design/methodology/approach We empirically tested a set of hypotheses by analyzing archival data from a leading equity crowdfunding platform that had implemented EBT. Findings We find EBT has significant negative impacts on fundraising performance and investors' post-investment engagement, which is detrimental to sustaining long-term investor interest in the campaign. In addition, enterprise valuation amplifies the negative relationship between EBT and fundraising performance, but does not significantly affect post-investment engagement. Practical implications To enhance equity crowdfunding outcomes, platforms should regulate EBT use, improve campaign vetting, and monitor incentive impacts. Entrepreneurs must balance EBT's appeal with valuation consistency. Investors, especially novices, should evaluate EBT critically, focusing on campaign fundamentals and long-term value to avoid being misled by short-term, superficial cues. Originality/value This study enriches existing literature on online crowdfunding and signaling theory by providing new insights into signaling effectiveness. It highlights the overlooked impact of negative signals, reveals how incentive and financial signals interact, and introduces post-investment engagement as a novel measure of investor behavior, offering a dynamic view of crowdfunding performance.

Objective: The article aims to indicate whether equity crowdfunding (ECF) in Poland is inclusive and whether the attributes of inclusivity influence the campaign’s success. Research Design & Methods: The research covers all ECF campaigns in Poland from 2012-2022. The data collection includes details on equity offers, the companies’ top management teams (TMT) structure, and crowdfunding campaign results. We implemented the ANOVA analysis to verify the hypotheses, and further, based on the data obtained, we built the regression models. Findings: Most of the surveyed entities are characterized by a lack of inclusive attributes. The dominant part of entities founded by ECF are companies located in Warsaw or the capitals of voivodships, managed by men aged between 31-59. Implications & Recommendations: The results show that there is no reason to believe that issuers who are gender inclusive will be more successful in ECF. Moreover, there is no evidence to reject the claim that the inclusiveness of the issuer measured by the age of the CEO can affect the success of the issue. However, the location of the issuer can affect the success of an ECF offer. Contribution & Value Added: Previous research on inclusivity has been conducted mainly in countries with high ethnic diversity. This research identifies the attributes of inclusiveness appropriate for ethnically homogeneous countries. Moreover, we conducted a comprehensive analysis of companies active in the ECF market in Poland.

The role of MSMEs in Indonesia is expected to improve welfare for society by contributing to Gross Domestic Product (GDP). MSMEs in Indonesia have the largest number in ASEAN countries, but the contribution of MSMEs to Gross Domestic Product (GDP) is still below other countries with fewer MSMEs. The biggest factor hindering MSMEs in their business is capital problems. Technology-based innovation by distributing profits according to the composition of capital provided is called equity crowdfunding. The level of achievement of financial well-being in a business organization is based on a person's initial goal for doing business which is referred to as business financial orientation. This research answers problems based on existing facts regarding the financial well-being of MSMEs. This type of research is research using quantitative methods, namely by testing the influence of the variables in this research. This research tests the relationship or influence by connecting and providing an explanation of the phenomena related to this research. The measurement method uses Structural Equation Modeling with the use of SmartPLS software data processing tools

Abstract While Equity Crowdfunding (ECF) platforms are a virtual space for raising funds, geography remains relevant. To determine how location matters for entrepreneurs using equity crowdfunding (ECF), we analyze the spatial distribution of successful ECF campaigns and the spatial relationship between ECF campaigns and traditional investors, such as banks and venture capitalists (VCs). Using data from the two leading German platforms – Companisto and Seedmacht – we employ spatial eigenvalue filtering and negative binomial estimations. In addition, we introduce an event study based on the implementation of the Small Investor Protection Act in Germany allowing us to obtain causal evidence. Our combined analysis reveals a significant geographic concentration of successful ECF campaigns in some, but not all, dense areas. ECF campaigns tend to cluster in dense areas with VC activity, while they are less prevalent in dense areas with high banking activity and are rarely found in rural areas. Thus, rather than closing the so-called regional funding gap, our results suggest that, from a spatial perspective, ECF fills the gap when firms in dense areas seek external financing below the minimum equity threshold offered by VCs and when there are few banks offering loans. Plain English Summary Equity crowdfunding is not closing the regional funding gap — it thrives where venture capital already flows. We study where successful equity crowdfunding campaigns happen in Germany and how their locations relate to those of traditional investors like banks and venture capitalists. Using data from the country’s two main crowdfunding platforms, we find that geography still matters, although equity is offered through digital marketplaces: crowdfunding campaigns cluster in urban areas with strong venture capital activity but are less common in rural regions or in places with many banks. Our findings imply that equity crowdfunding complements venture capital more than it replaces it — especially in cities — and is unlikely to solve funding challenges in under-served regions. This has important implications for policy, suggesting that additional measures are needed if crowdfunding is to help bridge regional finance gaps for small businesses.

Start-ups with female founders typically raise less money than their male counterparts. Prior literature explores investor demand and finds evidence of assortative matching, where investors prefer to invest in entrepreneurs of their own gender. In the context of equity crowdfunding, we examine the supply side of the gender funding gap, asking how female and male founders anticipate different investor demand. We develop an assortative matching theory that generates four benchmark predictions, namely that female founders (i) ask for less funding, (ii) have the same campaign success probability, (iii) receive less funding if successful, and (iv) have the same overfunding ratio, defined as the ratio of funding received over funding requested. Leveraging proprietary data from a UK equity crowdfunding platform that includes both successful and unsuccessful ventures, the evidence matches the first three predictions, also finding that all-female teams have larger funding gaps than mixed-gender teams. For the overfunding ratio, we find that mixed-gender (all-female) teams have higher (lower) overfunding ratios than the all-male benchmark. We also find that female investors fund mixed-gender teams relatively more, whereas male investors give disproportionately less to all-female teams. Gender gaps increase for more capital-intensive ventures. This paper was accepted by David Sraer, finance. Funding: This work was supported by Said Business School, University of Oxford [John Fell Fund] and the Coller Institute of Venture at Tel Aviv University. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.06658 .

This study explores the key factors influencing investor interest in micro, small, and medium enterprises (MSMEs) through equity crowdfunding (ECF) on the Santara platform. It examines the impact of stock price, number of outstanding shares, investment yield, dividend policy, and social media exposure. Using purposive sampling, data were collected from 36 fully funded MSMEs listed as of October 1, 2020, and analyzed using multiple linear regression. The results show that stock price, number of outstanding shares, dividend policy, and social media presence positively affect investor interest, while investment yield has no significant impact. These findings offer insights for MSMEs to better strategize their funding approaches in digital investment platforms.

Abstract This study explores how competition and macroeconomic factors affect the success of equity-based crowdfunding campaigns (ECF). Using a dataset of 247 campaigns from multiple platforms in Poland, we use logistic, Tobit and fixed-effects panel regressions to evaluate the impact of within-platform and between-platform competition, as well as market indicators such as interest rates, the number of initial public offerings (IPOs) and the NewConnect index, on funding outcomes. Our results reveal that within-platform competition significantly decreases both the likelihood of campaign success and the percentage of the funding target achieved, suggesting fragmentation of investor attention. The effects of macroeconomic variables are mixed. While interest rates do not consistently impact success, both IPO frequency and the NewConnect index are positively associated with funding outcomes. This study contributes to the crowdfunding literature by incorporating competitive and macroeconomic dimensions and provides policy insights into improving investor engagement and campaign performance.

This study explores the signaling value of equity crowdfunding compared to grants and business accelerators in attracting late-stage venture capital (VC) funding for start-ups. Using signaling theory and a probit regression model with propensity score matching, this study analyzes how equity crowdfunding functions as a signaling mechanism for start-ups. The study's findings reveal that although equity crowdfunding provides an initial signal of quality, start-ups relying on this mechanism are less likely to secure subsequent VC funding than those supported by grants or business accelerators. Notably, including human capital in equity crowdfunding ventures narrows the funding gap between crowdfunding and grants concerning VC funding probability, though the effect remains less pronounced than in business accelerator programs. This study enhances the understanding of crowdfunding's signaling efficacy and offers practical insights for researchers and entrepreneurs navigating the evolving landscape of start-up financing.