A Multidimensional Approach to Equity Crowdfunding: Bridging the Equity Gap and Boosting Social Capital

Drawing inspiration from micro-finance and crowdsourcing, equity crowdfunding has become a valuable source of fundraising for entrepreneurs and small and medium size firms (SMEs). Crowdfunding facilitates access to finance for those companies that would otherwise have great difficulty in accessing it and is viewed as a potentially revolutionary application of social networking with direct consequences for supporting sustainability and innovation. During recent years the number of equity crowdfunding platforms has been on the increase and policymakers and regulators have been fuelling greater attention to this theme. Our aim is twofold: a) to explore the characteristics of equity crowdfunding campaigns launched by different European platforms; and b) to analyze the relationship between social capital created online and the number of investors sustaining the campaign. Given the web context in which it develops, the role of online social capital in the project’s success should be considered from a broad perspective that involves both the founder’s and the project’s social networks. These two levels of analysis represent different networks that mobilize different resources and frame different types of crowd. Results are relevant for the field of equity crowdfunding research, as they shed light on a flourishing tool for bridging the equity gap of startups and innovative SMEs and propose a new perspective on the online social capital framework.