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The Role of Equity Crowdfunding in the Brazilian Entrepreneurial Ecosystem: An Empirical Analysis

Author

Listed:
  • Ronnie Figueiredo

    (Centre of Applied Research in Management and Economics (CARME), School of Technology and Management (ESTG), Polytechnic of Leiria, 2411-901 Leiria, Portugal
    Spinner Innovation Centre, 1600-237 Lisbon, Portugal)

  • Flavia Bendelá

    (Spinner Innovation Centre, 1600-237 Lisbon, Portugal
    Department of Finance and Accounting, Rennes School of Business, 35065 Rennes, France)

Abstract

This research provides the first deep and empirical look into Brazil’s increasing equity crowdfunding, or crowdinvest, market, and examines its peculiarities. It is a pioneering work dedicated to understanding which characteristics most impact the success of offers in the country, and whether there is any representative movement pointing to the inclusion of gender, firm age, and location or participation of small investors. We employ descriptive and quantitative research techniques and analyses all the offerings derived through this mechanism from 1 January 2017 to 31 December 2020—totaling 234 operations, considering successful offers (the ones that received investment) and unsuccessful offers (those that failed in raising funds), registered by 24 platforms in the country according to CVM (Comissão de Valores Mobiliários), the Brazilian SEC, under regulation Instruction 588. Furthermore, we use empirical and publicly available data from several sources. The findings reveal that mutual offers are more attractive to investors than those of equity, impacting the dependent variable of success. Besides this, firm location is the only inclusion aspect with representativeness among the independent variables tested. The main contributions of the research lie in providing the first empirical study that (1) consolidates a consistent database of the equity crowdfunding industry in Brazil, (2) reveals the role of crowdinvest in Brazil, related to bank credit to SMEs, and (3) provides recommendations to the main stakeholders that can improve the whole ecosystem.

Suggested Citation

  • Ronnie Figueiredo & Flavia Bendelá, 2024. "The Role of Equity Crowdfunding in the Brazilian Entrepreneurial Ecosystem: An Empirical Analysis," Administrative Sciences, MDPI, vol. 14(9), pages 1-28, September.
    • Handle: RePEc:gam:jadmsc:v:14:y:2024:i:9:p:213-:d:1474852
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    References listed on IDEAS

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    1. Kazem Mochkabadi & Christine K. Volkmann, 2020. "Equity crowdfunding: a systematic review of the literature," Small Business Economics, Springer, vol. 54(1), pages 75-118, January.
    2. Douglas Cumming & Sofia Johan, 2013. "Demand-driven securities regulation: evidence from crowdfunding," Venture Capital, Taylor & Francis Journals, vol. 15(4), pages 361-379, October.
    3. Christina Guenther & Sofia Johan & Denis Schweizer, 2018. "Is the crowd sensitive to distance?—how investment decisions differ by investor type," Small Business Economics, Springer, vol. 50(2), pages 289-305, February.
    4. Pierre-Benoît Joly, 2017. "Beyond the Competitiveness Framework? Models of Innovation Revisited," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 79-96.
    5. Silvio Vismara, 2016. "Equity retention and social network theory in equity crowdfunding," Small Business Economics, Springer, vol. 46(4), pages 579-590, April.
    6. Lars Hornuf & Armin Schwienbacher, 2017. "Should securities regulation promote equity crowdfunding?," Small Business Economics, Springer, vol. 49(3), pages 579-593, October.
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