Why startup entrepreneurs acquire capital through equity crowdfunding?
Esmaeilpourmotlagh, Hanieh (2018)
Pro gradu -tutkielma
Julkaisun pysyvä osoite on
The thesis aims to understand why startup entrepreneurs go through equity crowdfunding to acquire capital among other external equity funding sources. Theory suggests that there isn’t only financial gain in getting finance from crowdfunding but also non-financial values play an important role like testing the product or service, increasing publicity and marketing initiatives in general. This study is qualitative and the empirical findings are generated from integrative analysis of related literature as well as secondary data and case study analysis. The empirical suggestions driven from interviews support the research framework that is formed out of literature review findings. The results figured out through this thesis work suggest that for growing startups in their development stages even in early phase or growth period, equity crowdfunding could be the best option based on the intended outcomes and type of the business, it is also considered as a convenient financing method. The equity crowdfunding campaign provides much needed capital for development of startups which are continuously in need of money and benefit them through non-monetary advantages as well. This funding source from the crowd doesn’t limit entrepreneurs’ control over the business and their desired directions contrary to traditional equity sources. Empirical findings of the study and literature review reveal that running successful equity crowdfunding campaigns help startups to scale up their business by better access to follow on funds and approaching to new partners and customers besides providing new entrepreneurial learnings, visibility, customer loyalty, development of the strategy or business model and product/service optimizations. For startups, this thesis presents practical practices that can help entrepreneurs to understand how such young and innovativee firms can benefit from equity crowdfunding as an alternative financing channel both tangibly and intangibly to develop their operations.