Determinants of Individual Investment Decisions in Investment-Based Crowdfunding

We investigate determinants of investment decisions in investment-based (equity and real estate) crowdfunding campaigns, using a novel investment-, investor- and campaign-level database. We find that women invest less in the riskiest investments but more in safer ones. These findings are better expl...

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Published inIDEAS Working Paper Series from RePEc
Main Authors Hervé, Fabrice, Manthé, Elodie, Sannajust, Aurélie, Schwienbacher, Armin
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2018
Subjects
Crowdfunding
Entrepreneurial finance
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Abstract We investigate determinants of investment decisions in investment-based (equity and real estate) crowdfunding campaigns, using a novel investment-, investor- and campaign-level database. We find that women invest less in the riskiest investments but more in safer ones. These findings are better explained by differences in risk aversion than differences in overconfidence between men and women. Investors located in an area considered more "sociable" (socially friendly) also invest more, especially if the investor is a woman. Overall, the findings contribute to our understanding of how investment-based crowdfunding can be a viable source of entrepreneurial finance and how entrepreneurs' campaign decisions affect investor participation in this new form of entrepreneurial finance.
AbstractList We investigate determinants of investment decisions in investment-based (equity and real estate) crowdfunding campaigns, using a novel investment-, investor- and campaign-level database. We find that women invest less in the riskiest investments but more in safer ones. These findings are better explained by differences in risk aversion than differences in overconfidence between men and women. Investors located in an area considered more "sociable" (socially friendly) also invest more, especially if the investor is a woman. Overall, the findings contribute to our understanding of how investment-based crowdfunding can be a viable source of entrepreneurial finance and how entrepreneurs' campaign decisions affect investor participation in this new form of entrepreneurial finance.
Author Manthé, Elodie
Hervé, Fabrice
Sannajust, Aurélie
Schwienbacher, Armin
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