Nir Vulkan (University of Oxford)

joint with Ilona Mostipan and Thomas Hellmann

A fundamental question in entrepreneurial finance is what determines the amount of money raised. This paper uses the context of equity crowdfunding to ask how amounts raised are determined by what the entrepreneurs ask for, versus what the investors want to give. The empirical analysis exploits unique features of equity crowdfunding campaigns, where entrepreneurs set investment goals, valuations, and determine when to close successful campaigns. We find that experienced founder teams pursue more ambitious fundraising strategies by asking for more money. Their campaigns are more likely succeed, and they raise more money. Female teams (especially all-female teams) pursue safer fundraising strategies, asking for less. Their campaigns are equally successful, yet they raise significantly less money. At the end of campaigns, all-female teams face lower investment flows but hold out longer for more money. Overall the analysis suggests that it matters what the entrepreneurs ask for -their fundraising strategies are an important determinant of the amount of money raised.