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Voting rights delivery in investment-based crowdfunding: a cross-platform analysis

Author

Listed:
  • Alice Rossi

    (University of Bergamo)

  • Silvio Vismara

    (University of Bergamo
    Ghent University)

  • Michele Meoli

    (University of Bergamo)

Abstract

This is one of the first studies to investigate corporate governance in investment-based crowdfunding. Our cross-platform analysis reveals a large variety in corporate governance mechanisms, in particular with regard to voting rights delivery. Some platforms assign voting rights to individual investors, some work under a nominee structure, and some require the involvement of accredited investors to list offerings. Using a sample of 185 investment-based crowdfunding portals based in Australia, Austria, Canada, France, Germany, Italy, New Zealand, the UK and the US, we find that the delivery of individual voting rights is associated with lower chances of success of the platforms, whereas the delivery of pooled voting rights is not significant. Fewer offerings are listed in syndicate-like platforms.

Suggested Citation

  • Alice Rossi & Silvio Vismara & Michele Meoli, 2019. "Voting rights delivery in investment-based crowdfunding: a cross-platform analysis," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 46(2), pages 251-281, June.
    • Handle: RePEc:spr:epolin:v:46:y:2019:i:2:d:10.1007_s40812-018-0109-x
    DOI: 10.1007/s40812-018-0109-x
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    Cited by:

    1. Cumming, Douglas & Meoli, Michele & Rossi, Alice & Vismara, Silvio, 2024. "ESG and crowdfunding platforms," Journal of Business Venturing, Elsevier, vol. 39(1).
    2. Coakley, Jerry & Lazos, Aristogenis & Liñares-Zegarra, José M., 2022. "Seasoned equity crowdfunded offerings," Journal of Corporate Finance, Elsevier, vol. 77(C).
    3. Agnieszka Szewczyk & Zbigniew Stempnakowski, 2021. "Social Energy as the Driving Force behind Crowdfunding—Analysis and Classification of Selected Attributes," Energies, MDPI, vol. 14(19), pages 1-32, September.
    4. Troise, Ciro & Tani, Mario & Dinsmore, John & Schiuma, Giovanni, 2021. "Understanding the implications of equity crowdfunding on sustainability-oriented innovation and changes in agri-food systems: Insights into an open innovation approach," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    5. Butticè, Vincenzo & Di Pietro, Francesca & Tenca, Francesca, 2020. "Is equity crowdfunding always good? Deal structure and the attraction of venture capital investors," Journal of Corporate Finance, Elsevier, vol. 65(C).
    6. Vincenzo Butticè & Silvio Vismara, 2022. "Inclusive digital finance: the industry of equity crowdfunding," The Journal of Technology Transfer, Springer, vol. 47(4), pages 1224-1241, August.
    7. Hans Rawhouser & Silvio Vismara & Nir Kshetri, 2024. "Blockchain and vulnerable entrepreneurial ecosystems," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 36(1-2), pages 10-35, January.
    8. Francesca Battaglia & Francesco Busato & Maria Manganiello, 2022. "A cross-platform analysis of the equity crowdfunding Italian context: the role of intellectual capital," Electronic Commerce Research, Springer, vol. 22(2), pages 649-689, June.
    9. Camilla Civardi & Andrea Moro & Joakim Winborg, 2024. "“All that glitters is not gold!”: The (Unexplored) Determinants of Equity Crowdfunding," Small Business Economics, Springer, vol. 63(1), pages 299-324, June.
    10. Alexa Böckel & Jacob Hörisch & Isabell Tenner, 2021. "A systematic literature review of crowdfunding and sustainability: highlighting what really matters," Management Review Quarterly, Springer, vol. 71(2), pages 433-453, April.
    11. Marc Goergen & Laura Rondi, 2019. "Grand challenges and new avenues for corporate governance research," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 46(2), pages 137-146, June.
    12. Di Pietro, Francesca & Butticè, Vincenzo, 2020. "Institutional characteristics and the development of crowdfunding across countries," International Review of Financial Analysis, Elsevier, vol. 71(C).
    13. Semen Son Turan, 2021. "Uncovering trust signals in equity crowdfunding: A systematic literature review," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(4), pages 215-225, June.
    14. Joern H. Block & Alexander Groh & Lars Hornuf & Tom Vanacker & Silvio Vismara, 2021. "The entrepreneurial finance markets of the future: a comparison of crowdfunding and initial coin offerings," Small Business Economics, Springer, vol. 57(2), pages 865-882, August.
    15. Hornuf, Lars & Schilling, Tobias & Schwienbacher, Armin, 2022. "The relevance of investor rights in crowdinvesting," Journal of Corporate Finance, Elsevier, vol. 77(C).
    16. Francesca Pietro, 2021. "The rationale for listing on equity crowdfunding: actual and expected benefits for companies," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(4), pages 527-549, December.
    17. Coakley, Jerry & Cumming, Douglas J. & Lazos, Aristogenis & Vismara, Silvio, 2021. "Enfranchising the crowd: Nominee account equity crowdfunding," CFS Working Paper Series 664, Center for Financial Studies (CFS).
    18. Ciro Troise & Enrico Battisti & Michael Christofi & Nina Jorien Vulpen & Shlomo Tarba, 2023. "How Can SMEs Use Crowdfunding Platforms to Internationalize? The Role of Equity and Reward Crowdfunding," Management International Review, Springer, vol. 63(1), pages 117-159, February.
    19. Enrico Battisti & Ciro Troise & Antonio Salvi & Michael Christofi, 2024. "Decoding the success of equity crowdfunding: investment decisions of professional and non-professional investors," Review of Managerial Science, Springer, vol. 18(12), pages 3545-3573, December.
    20. Andrea Caputo & Elisa Schiocchet & Ciro Troise, 2022. "Sustainable business models as successful drivers in equity crowdfunding," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3509-3522, November.
    21. Joern H. Block & Alexander Groh & Lars Hornuf & Tom Vanacker & Silvio Vismara, 0. "The entrepreneurial finance markets of the future: a comparison of crowdfunding and initial coin offerings," Small Business Economics, Springer, vol. 0, pages 1-18.
    22. Jerry Coakley & Aristogenis Lazos & Jose Liñares-Zegarra, 2022. "Strategic entrepreneurial choice between competing crowdfunding platforms," The Journal of Technology Transfer, Springer, vol. 47(6), pages 1794-1824, December.
    23. Felix Reichenbach & Martin Walther, 2021. "Signals in equity-based crowdfunding and risk of failure," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-30, December.

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    More about this item

    Keywords

    Crowdfunding; Corporate governance; Equity crowdfunding; Investment crowdfunding; Entrepreneurial finance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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