Forecasting Success in Equity Crowdfunding

34 Pages Posted: 26 Oct 2018 Last revised: 6 Feb 2019

See all articles by Aleksandrina Ralcheva

Aleksandrina Ralcheva

Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)

Peter Roosenboom

Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)

Date Written: January 2019

Abstract

This paper analyzes a large dataset of 2,171 equity crowdfunding campaigns launched between the years 2012 and 2017 on two of the world’s largest platforms Crowdcube and Seedrs. Our data shows that the equity crowdfunding market has matured: more recent campaigns tend to be launched by larger and older companies with better access to external financing. Given the market’s dynamics, we use a rolling three-year window to forecast funding success and develop a simple model based on information that is available at the time of the campaign (e.g., retained equity, external fundraising before the campaign, accelerator attendance and information about the directors’ team). Our proposed forecasting method can be beneficial to both platforms and entrepreneurs for improving outcomes on the equity crowdfunding market.

Keywords: Equity Crowdfunding, Success, Forecasting, Entrepreneurial Finance

JEL Classification: G24, G32

Suggested Citation

Ralcheva, Aleksandrina and Roosenboom, Peter, Forecasting Success in Equity Crowdfunding (January 2019). Available at SSRN: https://ssrn.com/abstract=3260140 or http://dx.doi.org/10.2139/ssrn.3260140

Aleksandrina Ralcheva (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Peter Roosenboom

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T09-56
3000 DR Rotterdam
Netherlands
+31 10 40 82255 (Phone)

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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