News

Dissertation: Pursuing returns or supporting a cause? Investors are choosing equity crowdfunding for various reasons

The success of equity crowdfunding campaigns depends on many factors, such as campaign characteristics, the company's ability to leverage its networks and how easily understandable the products are, demonstrates a recent doctoral dissertation.
Käsi näyttämässä jotain tietokoneen näytöltä

In recent years, equity crowdfunding has become an increasingly popular financing method where a large number of people make relatively small equity investments in a company. Since these companies are usually at the growth stage, investment risks are high.

Anna Lukkarinen, who will defend her doctoral dissertation at the Aalto University School of Business, examined investors’ motivations and decision criteria with an extensive survey focused on people who had invested through the equity crowdfunding platform of financial technology company Invesdor.

According to the survey, most investors are highly educated people who already have experience in investing in public equities. However, there are clear differences between investors’ motives. Although many are specifically looking for capital gain, and some even dividend income, the motives of many investors go beyond returns. This is reflected in investors’ decision criteria and the companies they choose to invest in.

‘For example, most people who invested in Cityvarasto, a self storage chain, aimed at earning returns, whereas nearly everyone who participated in football club HIFK's equity crowdfunding campaign wanted to support the club and be a part of the phenomenon that it represents, without financial motives’, says Lukkarinen.

Investing in increasingly professional companies

The survey is part of Anna Lukkarinen's doctoral dissertation where she examines the drivers of investment activity in equity crowdfunding. According to Lukkarinen, equity crowdfunding complements other early-stage financing mechanisms.

The success of equity crowdfunding campaigns depends on many factors, such as campaign characteristics, the company's ability to leverage its networks and how easily understandable the products are.

As a relatively new industry, equity crowdfunding is constantly developing and changing. Companies using this investment model are becoming larger and more professional, and at the same time, investors’ motives are increasingly focused on returns.

‘When considering an investment, it is useful for an individual investor to be conscious of the goal of their investment. When assessing a potential company to invest in, it is also good for investors to acknowledge that entrepreneurs are often very optimistic in their plans’, says Lukkarinen.

The doctoral dissertation of Anna Lukkarinen, Lic.Sc. (Econ. & Bus. Admin.), “Drivers of investment activity in equity crowdfunding” will be reviewed at Aalto University School of Business on Friday 29 March.

Further information:
Anna Lukkarinen
tel. +358 50 431 8738
[email protected]

  • Published:
  • Updated:
Share
URL copied!

Related news

Taiteellinen kuva panssaroidusta superhydrofobisesta pinnasta, joka kestää iskuja ja hylkii nesteitä tehokkaasti. Kuva: Juha Juvonen.
Cooperation, Press releases, Research & Art Published:

New funding to commercialise high-tech liquid-repelling coatings

New funding to get damage-resistant, liquid-repelling surfaces out of the laboratory and onto solar panels, skis, and more
The computer game could help in the treatment of depression alongside therapy and drug treatment. Picture: Matias Palva’s research group, Aalto University.
Press releases Published:

Researchers developing computer game to treat depression

Playing a therapeutic action game can ease symptoms in patients with depression, and improve their cognitive performance
An electron microscope image of the device used to extract entangled electrons
Press releases Published:

Entangling electrons with heat

Entanglement is key for quantum computing and communications technology; Aalto researchers can now extract entangled electrons using heat
Ihminen tekemässä työtä laboratotiossa.
Press releases, Research & Art Published:

How to motivate people to comply voluntarily with necessary restrictions – 13 principles for effective COVID-19 related communication

Decision-makers and experts should support people's autonomy, competence and relatedness in their COVID-19 related communications with citizens.