Unveiling the role of entrepreneurial teams in the equity crowdfunding journey

Abstract

Despite the rapid spread of equity crowdfunding, the role and actions played by entrepreneurial teams in this context have been neglected; the few studies in this field adopted a static view and focused primarily on their signaling role in equity crowdfunding campaigns, compared to solo founders. This study adopts a dynamic view and extends current literature by exploring the underlying dynamics and the role of entrepreneurial teams in the entire equity crowdfunding journey. Our findings reveal that entrepreneurial teams play a crucial role in three phases of equity crowdfunding, namely, the pre-campaign, during the campaign, and post-campaign phases. In the first phase, entrepreneurial teams are crucial in enhancing entrepreneurial alertness, social media use, social capital, entrepreneurial openness, and reducing the perceived uncertainty. The analysis shows that entrepreneurial teams are determinant for the success of the equity crowdfunding campaigns for human capital signals, certifications, social media use, and increased social capital and communication activities. Finally, the results highlight that entrepreneurial teams have valuable importance in the post-campaign phases in terms of crowd involvement/management, social capital and knowledge/network exploitation, improved resource mobilization, and resilience/robustness. Notably, social capital has a dynamic effect on equity crowdfunding activities over time. The results of this research have several implications for theory and for practice. We also discuss the implications of our findings for adopting a team approach, for small businesses undertaking the equity crowdfunding journey, and for other actors including platform managers and prospective investors.

Keywords: Crowdfunding; Entrepreneurial teams; Equity crowdfunding; Founders; Small businesses