Does equity crowdfunding democratize entrepreneurial finance?

  • Douglas Cumming
  • Michele Meoli
  • Silvio VismaraEmail author


This paper investigates whether gender, age, ethnicity, and geography affect the choice of equity crowdfunding offerings vs initial public offerings (IPO) on traditional stock markets and whether these characteristics increase the likelihood of a successful offering. Using 167 equity offerings in Crowdcube and 99 equity offerings on London’s Alternative Investment Market raising between £300,000 and £5 m, we find that companies with younger top management team (TMT) members are both more likely to launch equity crowdfunding offerings than IPOs and have higher chances to successfully complete an equity crowdfunding offering. Remotely located companies are more likely to launch equity crowdfunding offerings than IPOs and have higher chances to successfully complete an equity crowdfunding offering. On the contrary, female entrepreneurs do not have higher chances to raise funds in equity crowdfunding. Minority entrepreneurs do not have higher chances of successfully raising capital but do attract a higher number of investors. Overall, our evidence provides empirical guidance for the first time to the oft-repeated policy claim that equity crowdfunding democratizes entrepreneurial finance by providing access to funding to underrepresented groups of potential entrepreneurs.


Crowdfunding Finance democratization Non-bank financial institutions Entrepreneurship 

JEL classifictions

L25 L26 G23 G24 G28 



We owe thanks to Maksim Belitski, two anonymous reviewers, and the conference participants in Berlin at the Indiana University European Gateway in Berlin and at the University of Reading.


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  • Douglas Cumming
    • 1
    • 2
  • Michele Meoli
    • 3
  • Silvio Vismara
    • 3
    • 4
    Email author
  1. 1.College of BusinessFlorida Atlantic UniversityBoca RatonUSA
  2. 2.Birmingham Business SchoolUniversity of BirminghamBirminghamUK
  3. 3.University of BergamoBergamoItaly
  4. 4.Ghent UniversityGhentBelgium

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