Abstract
Often equity crowdfunding is just considered as a new viable method of financing beyond the traditional financial system. However, considering equity crowdfunding only within the financial sphere and as a financial innovation is very limiting and does not represent the reality. Equity crowdfunding innovation is not only a financial innovation; it encompasses many other features that make equity crowdfunding so innovative. The financial sphere is only a part of the innovation that interacts on different levels with other relevant features, thus creating synergies and a unique model.
The purpose of this article is to analyse the most relevant aspects of equity crowdfunding beyond the obvious financial sphere.
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Notes
- 1.
Enterprise crowdfunding could be defined as an intranet venture application of crowdfunding aimed at reproducing the benefits of stimulation, participation and innovation inside the company, using unexpressed ideas, competencies and employee projects in order to improve the company’s efficiency and entrepreneurial approach of employees.
- 2.
The wisdom of the crowd (or intelligence of the crowd) is a sociological theory according to which a mass of individuals would be able to provide a more adequate response to the problems than a small number of experts may be able to.
- 3.
The dynamics of crowdfunding are often linked to the interaction of very heterogeneous motivational factors, in part not related to economic rationality.
- 4.
There is a trade-off between the number of shareholders and the commitment to promotion. The greater the dilution of ownership, the lower the commitment to promoting the product, because the direct benefit is lower. Vice versa, the lesser the dilution of ownership, the higher the commitment to promotion, which also leads to lesser exploitation of the network due to less investors. There is a mid-point at which the promotion benefit will be maximised.
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Nasrabadi, A.G. (2016). Equity Crowdfunding: Beyond Financial Innovation. In: Brüntje, D., Gajda, O. (eds) Crowdfunding in Europe. FGF Studies in Small Business and Entrepreneurship. Springer, Cham. https://doi.org/10.1007/978-3-319-18017-5_14
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