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Equity-based Crowdfunding

Author

Listed:
  • Mónika Kuti

    (University of Pécs)

  • Zsolt Bedõ

    (University of Pécs)

  • Dorottya Geiszl

    (University of Pécs)

Abstract

This paper presents the latest results of international research on equity-based crowdfunding, and thus – according to the authors’ current knowledge – fills a gap in the Hungarian literature. Equity-based crowdfunding offers a fundraising opportunity through online platforms for small and medium-sized enterprises seeking alternative forms of funding for growth opportunities and innovation in this digital age. Investors interested in risk-adjusted financial return have several methods available to handle capital market friction and agent costs in the context of “crowdfunding”. Information signals on entrepreneurial quality are essential for seasoned investors when making capital allocation decisions in a crowdfunding campaign. In addition to the national legislative framework, platforms have many different rules, techniques and cultural norms that attempt to handle capital market imperfections.

Suggested Citation

  • Mónika Kuti & Zsolt Bedõ & Dorottya Geiszl, 2017. "Equity-based Crowdfunding," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(4), pages 187-200.
    • Handle: RePEc:mnb:finrev:v:16:y:2017:i:4:p:187-200
    as

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    File URL: http://english.hitelintezetiszemle.hu/letoltes/fer-16-4-e2-kuti-bedo-geiszl.pdf
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    References listed on IDEAS

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    2. Gregor Dorfleitner & Lars Hornuf & Martina Weber, 2017. "Dynamics of Investor Communication in Equity Crowdfunding," Research Papers in Economics 2017-04, University of Trier, Department of Economics.
    3. Welch, Ivo, 1992. "Sequential Sales, Learning, and Cascades," Journal of Finance, American Finance Association, vol. 47(2), pages 695-732, June.
    4. Lars Hornuf & Armin Schwienbacher, 2015. "Funding Dynamics in Crowdinvesting," Research Papers in Economics 2015-09, University of Trier, Department of Economics.
    5. Lars Hornuf & Matthias Schmitt, 2016. "Success and Failure in Equity Crowdfunding," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(2), pages 16-22, 07.
    6. Vulkan, Nir & Åstebro, Thomas & Sierra, Manuel Fernandez, 2016. "Equity crowdfunding: A new phenomena," Journal of Business Venturing Insights, Elsevier, vol. 5(C), pages 37-49.
    7. Gerrit K.C. Ahlers & Douglas Cumming & Christina Günther & Denis Schweizer, 2015. "Signaling in Equity Crowdfunding," Entrepreneurship Theory and Practice, , vol. 39(4), pages 955-980, July.
    8. Lars Hornuf & Matthias Schmitt, 2016. "Success and Failure in Equity Crowdfunding," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(02), pages 16-22, July.
    9. Lars Hornuf & Armin Schwienbacher, 2016. "Crowdinvesting: angel investing for the masses?," Chapters, in: Hans Landström & Colin Mason (ed.), Handbook of Research on Business Angels, chapter 15, pages 381-398, Edward Elgar Publishing.
    10. Silvio Vismara, 2016. "Equity retention and social network theory in equity crowdfunding," Small Business Economics, Springer, vol. 46(4), pages 579-590, April.
    11. Freear, John & Sohl, Jeffrey E. & Wetzel, William Jr., 1994. "Angels and non-angels: Are there differences?," Journal of Business Venturing, Elsevier, vol. 9(2), pages 109-123, March.
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    Cited by:

    1. Kędzierska-Szczepaniak Angelika, 2018. "The Initiatives Supported by Reward-Based Crowdfunding in Poland," Management Sciences. Nauki o Zarządzaniu, Sciendo, vol. 23(4), pages 18-27, December.

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    More about this item

    Keywords

    equity crowdfunding; financial innovation; start-up financing;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G19 - Financial Economics - - General Financial Markets - - - Other
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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