Strategic entrepreneurial choice between competing crowdfunding platforms

Raising capital amid economic policy uncertainty: an empirical investigation

This paper investigates how economic policy uncertainty affects firms' frequency and their choice of financial instruments to raise capital. By applying a three-step sequential framework over a sample of 6834 publicly listed US non-financial firms, we find that during periods of high economic uncertainty, firms raise capital more frequently with a preference toward debt financing. The empirical findings suggest that firms prefer debt financing over equity financing to avoid ownership dilution and high equity premia. The rise in leverage during periods of high economic uncertainty highlights the importance of scrutinizing policy tools used to stabilize the economy during such times.

Expanding corporate finance perspectives to equity crowdfunding

In equity crowdfunding, firms raise capital online from a large pool of heterogeneous investors, thereby providing primary market opportunities similar to traditional public markets, such as initial public offerings. The development of secondary markets is instead still limited, making the post-offering perspectives of both crowdfunding investors and firms closer to private equity deals. We believe that equity crowdfunding markets provide an interesting setting where to test existing corporate finance and financial economics theories, as well as to develop new theoretical insights. Relatedly, our understanding of crowdfunding mechanisms can largely benefit from increased attention from finance scholars. This paper and special issue are an attempt in this direction.