Investor Motivations and Decision Criteria in Equity Crowdfunding

Online equity crowdfunding is a novel form of entrepreneurial finance, through which ventures can sell shares to large numbers of small investors. We analyze the motivations and decision criteria of equity crowdfunding investors using responses to a large-scale survey. We find, first, that investors form three distinct motivation-based clusters: donation-oriented supporters, return-oriented supporters, and pure investors. Second, investors use five main investment decision criterion factors: campaign specifications, target attractiveness, familiarity, campaign scale, and personal acquaintances. Third, investors' decision criteria are related to their motivations. The results contribute to literature on entrepreneurship and new venture financing