An increase in the restrictions on the availability of funding for new and growing businesses in the aftermath of the global financial crisis has been accompanied by the emergence and growth of crowdfunding as an alternative method of raising capital. Crowdfunding contributes towards the disintermediation of the finance market as funders and promoters are brought together directly, democratising both fundraising by businesses and investment by individuals.
This book extends entrepreneurial finance research to the study of crowdfunding. Contributions review the history, status and future of crowdfunding, analyse the patterns of fundraising, assess the potential of crowdfunding for the financing of social ventures in particular, and discuss the regulatory implications of recent developments. What is clear from this collection is that the crowdfunding space is still evolving, institutional forms are still developing as models are refined, new institutional collaborations (e.g. between equity platforms and business angel networks) are emerging, and new challenges, particularly regulatory challenges, are being encountered. While crowdfunding is not a universal solution for SME finance in a post-crisis financial landscape, it remains too early to determine whether crowdfunding represents a large-scale transformation of the early stage risk capital market or a minor addition to it.
This book was originally published as a special issue of Venture Capital.
1. Crowdfunding and the revitalisation of the early stage risk capital market: catalyst or chimera? Richard Harrison
2. Crowdfunding social ventures: a model and research agenda Othmar M. Lehner
3. Individual crowdfunding practices Paul Belleflamme, Thomas Lambert and Armin Schwienbacher
4. A conceptualized investment model of crowdfunding Alan Tomczak and Alexander Brem
5. Exploring entrepreneurial legitimacy in reward-based crowdfunding Denis Frydrych, Adam J. Bock, Tony Kinder & Benjamin Koeck
6. Social finance and crowdfunding for social enterprises: a public–private case study providing legitimacy and leverage Othmar M. Lehner & Alex Nicholls
7. Demand-driven securities regulation: evidence from crowdfunding Douglas Cumming and Sofia Johan