Title: Digital due diligence activities and goal setting in equity crowdfunding: exploring the differences between novice and experienced investors

Authors: Frederik J. Riar; Christoph Hienerth; Morten Berg Jensen

Addresses: Karlsruhe Institute of Technology, Department of Economics and Management, Institute of Management, Kaiserstraße 89, 76133 Karlsruhe, Germany ' WHU – Otto Beisheim School of Management, Chair in Entrepreneurship and New Business Development, Burgplatz 2, 56179 Vallendar, Germany ' Department of Economics and Business Economics, Aarhus University, Fuglesangs Allé 4, 8210 Aarhus V, Denmark

Abstract: Investor background can have major implications for decision-making processes in start-up financing. We investigate the differences between novice and experienced investors in equity crowdfunding. To date, empirical information about the specifics of these investor types in the crowdfunding literature is limited, as most studies do not investigate the micro level, i.e., the actions and decisions of individuals. Our empirical results, based on data from a major European equity crowdfunding platform, show similarities but also clear differences among the different types of investors with regard to information search, communication, signalling effects, and investment motives. The insights of our study contribute to the crowdfunding literature by developing a better understanding of crowd investor types active in crowdfunding. Moreover, our findings specifically contribute to research on information assembly, communication, signalling, and investment motives in equity crowdfunding.

Keywords: crowdfunding; investor types; information assembly; communication; signalling; investment motives; due diligence; decision-making; entrepreneurial finance; entrepreneurship.

DOI: 10.1504/IJEV.2021.114270

International Journal of Entrepreneurial Venturing, 2021 Vol.13 No.1, pp.1 - 26

Received: 21 Mar 2019
Accepted: 18 Mar 2020
Published online: 15 Apr 2021 *

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