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Equity crowdfunding : first resort or last resort?

(2018) JOURNAL OF BUSINESS VENTURING. 33(4). p.513-533
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Abstract
Prior research has focused on the factors that affect funding success on equity crowdfunding platforms, but a detailed understanding of the factors that drive firms to search for equity crowdfunding in the first place is lacking. Drawing on the pecking order theory, we argue that firms list on equity crowdfunding platforms as a “last resort”—that is, when they lack internal funds and additional debt capacity. In line with the pecking order theory, the empirical evidence shows that firms listed on equity crowdfunding platforms are less profitable, more often have excessive debt levels, and have more intangible assets than matched firms not listed on these platforms. We discuss the implications for theory and practice.
Keywords
Entrepreneurial finance, Equity crowdfunding, Financial decision making, Pecking order theory

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Citation

Please use this url to cite or link to this publication:

Chicago
Walthoff-Borm, Xavier, Armin Schwienbacher, and Tom Vanacker. 2018. “Equity Crowdfunding : First Resort or Last Resort?” Journal of Business Venturing 33 (4): 513–533.
APA
Walthoff-Borm, X., Schwienbacher, A., & Vanacker, T. (2018). Equity crowdfunding : first resort or last resort? JOURNAL OF BUSINESS VENTURING, 33(4), 513–533.
Vancouver
1.
Walthoff-Borm X, Schwienbacher A, Vanacker T. Equity crowdfunding : first resort or last resort? JOURNAL OF BUSINESS VENTURING. Elsevier BV; 2018;33(4):513–33.
MLA
Walthoff-Borm, Xavier, Armin Schwienbacher, and Tom Vanacker. “Equity Crowdfunding : First Resort or Last Resort?” JOURNAL OF BUSINESS VENTURING 33.4 (2018): 513–533. Print.
@article{8564855,
  abstract     = {Prior research has focused on the factors that affect funding success on equity crowdfunding platforms, but a detailed understanding of the factors that drive firms to search for equity crowdfunding in the first place is lacking. Drawing on the pecking order theory, we argue that firms list on equity crowdfunding platforms as a {\textquotedblleft}last resort{\textquotedblright}---that is, when they lack internal funds and additional debt capacity. In line with the pecking order theory, the empirical evidence shows that firms listed on equity crowdfunding platforms are less profitable, more often have excessive debt levels, and have more intangible assets than matched firms not listed on these platforms. We discuss the implications for theory and practice.},
  author       = {Walthoff-Borm, Xavier and Schwienbacher, Armin and Vanacker, Tom},
  issn         = {0883-9026},
  journal      = {JOURNAL OF BUSINESS VENTURING},
  language     = {eng},
  number       = {4},
  pages        = {513--533},
  publisher    = {Elsevier BV},
  title        = {Equity crowdfunding : first resort or last resort?},
  url          = {http://dx.doi.org/10.1016/j.jbusvent.2018.04.001},
  volume       = {33},
  year         = {2018},
}

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