Forecasting Success in Equity Crowdfunding
34 Pages Posted: 26 Oct 2018 Last revised: 6 Feb 2019
Date Written: January 2019
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: Suggested Citation