Journal / Book Title
Electronic Commerce Research and Applications
The financial industry is seeing rapid introduction of new technologies and new business models that are challenging established practices. Recent changes in financial regulation in the United States have spurred evolution of equity crowdfunding as a potential alternative to traditional sources of venture capital. To address the relative lack of knowledge about success factors, we focus on Title III equity crowdfunding platforms in the United States that are open to non-accredited investors. We draw on traditional venture finance research and we examine the effects of market, execution and agency risks in equity crowdfunding under Title III. We collect data on 133 ventures that attracted more than $11 million in funding commitments across sixteen Title III equity crowdfunding platforms. We find that all three types of risks can affect the likelihood of successful fundraising under Title III. We discuss the implications of these findings for entrepreneurs, investors, crowdfunding platforms and policy makers.
MSU Digital Commons Citation
Mamonov, Stanislav and Malaga, Ross, "Success Factors in Title III Equity Crowdfunding in the United States" (2018). Department of Information Management and Business Analytics Faculty Scholarship and Creative Works. 128.
Mamonov, S., & Malaga, R. (2018). Success factors in Title III equity crowdfunding in the United States. Electronic Commerce Research and Applications, 27, 65-73.