Equity Crowdfunding and Governance: Toward an Integrative Model and Research Agenda

By Douglas J. Cumming, Tom Vanacker, Shaker A. Zahra. Academy of Management Perspectives, 2019

114 citations recorded by the source corpus.

Equity crowdfunding markets have grown exponentially over the last few years. Despite this impressive growth, significant informational asymmetry problems may plague these markets, making them susceptible to difficulties and even market failure. In this paper, we depart from current equity crowdfunding research that focuses almost exclusively on the funding success and funding dynamics on platforms to study the effective governance of equity-crowdfunded (ECF) firms and how it relates to these firms’ success. We propose a conceptual model that identifies a multitude of governance mechanisms (e.g., internal or external and formal or informal) that potentially operate in equity crowdfunding markets to reduce adverse selection and moral hazard problems. Further, building on this framework, we offer a roadmap for future research that examines how different governance mechanisms may help in the selection and development of successful ECF firms.

Subfields: Accounting, Economics and Econometrics, Management Information Systems

View Paper: https://www.semanticscholar.org/paper/e25b0b7754c1be7bd4fa728fd5c84fc184002a0a

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Citations in the corpus

The entrepreneurial finance markets of the future: a comparison of crowdfunding and initial coin offerings (2020, background): “Cumming et al. (2019d) provide an in-depth analysis of fraud in reward-based CF and conclude that “[.”