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A cross-platform analysis of the equity crowdfunding Italian context: the role of intellectual capital

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Abstract

Does intellectual capital positively affect the success of the equity crowdfunding campaigns? This paper answers this question using an original dataset of 191 equity crowdfunding campaigns, gathered from Italian platforms over the period 2014–2018; special attention is dedicated to patents effect, R&D and team’s education level on funding success, as they may serve as signals of unobservable quality of equity crowdfunding campaigns. Then, following literature on success factors for crowdfunding, the paper analyzes the signaling role of equity share retained by founders and by their social network size. Results suggest that intellectual capital (i.e. patents, R&D, team’s education level), amount of equity retained by projects’ founders and size of their social network have a positive and significant impact on fundraising success and are perceived as quality signals of crowdfunding campaigns by external investors.

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Notes

  1. Literature suggests that knowledge is a necessity that can encourage firms to adopt new skill initiatives and strive to acquire competitive advantages. In detail, patents create a barrier to entry for a potential competitor that may ensure commercial success in the long term. Accordingly, researchers note that patent protection has a positive impact on investor’s decision to fund an entrepreneur and positively relates to the likelihood and the amount of external investor financing [21, 23, 26, 27, 51, 58].

  2. www.mise.gov.it/index.php/it/impresa/competitivita-e-nuove-imprese/start-up-innovative/start-up-act-normativa).

  3. see Sect. 2.

  4. Agrawal et al. [1], Ahlers et al. [2], Angerer et al. [3], Block et al. [7], Günther et al. [19], Hornuf and Schwienbacher [24], Lukkarinen et al. [34], Piva and Rossi-Lamastra [41], Ralcheva and Peter [42], Vismara [52], Vismara [53], Vulkan et al. [54].

  5. i.e. information on the project; the business plan and internal organization of the start-up; rights and duties concerning the equity securities subject to the public offer; existing provisions on the transfer limitations of such securities; information on the banks and investment companies which will take care of the payments related to each subscription; any costs to which the investors are liable; information on the professional investors already subscribed to a portion of the equity securities; information on any public offer already launched by the same start-up on other on-line portals.

  6. Social capital is defined by the OECD [39] as “networks together with shared norms, values, and understandings that facilitate co-operation within or among groups”. Since social capital is a multidimensional concept, there are several measures capturing its features. In particular, it usual focuses on its “structural” component, which is identified with social networks [4, 32, 44]. Moreover, also the existing crowdfunding literature on signaling theory [12, 36, 41] considers social network the most important dimension of social capital,accordingly, we use it as our proxy of social capital.

  7. Findings are the same using the R&D and the team’s education level as proxies of intellectual capital. Results are available from the authors upon request.

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  1. Department of Management Studies and Quantitative Methods, University of Naples Parthenope, Naples, Italy

    Francesca Battaglia

  2. Department of Economic and Legal Studies, University of Naples Parthenope, Naples, Italy

    Francesco Busato & Maria Manganiello

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  1. Francesca Battaglia
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Battaglia, F., Busato, F. & Manganiello, M. A cross-platform analysis of the equity crowdfunding Italian context: the role of intellectual capital. Electron Commer Res 22, 649–689 (2022). https://doi.org/10.1007/s10660-020-09453-w

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