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  Pricing Shares in Equity Crowdfunding

Hornuf, L., & Neuenkirch, M. (2017). Pricing Shares in Equity Crowdfunding. Small Business Economics, 48(4), 795-811. doi:10.1007/s11187-016-9807-9.

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 Creators:
Hornuf, Lars1, Author           
Neuenkirch, Matthias2, Author
Affiliations:
1MPI for Innovation and Competition, Max Planck Society, ou_2035292              
2External Organizations, ou_persistent22              

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Free keywords: Auctions - Equity crowdfunding - Valuation of shares
 Abstract: We analyze the pricing of cash flow rights in start-up companies using a unique data set of 44 equity crowdfunding campaigns. Our sample consists of 499 backers who invested during the period from November 6, 2011, to March 25, 2014, on the German equity crowdfunding portal Innovestment. In contrast with all other European equity crowdfunding portals, Innovestment runs a multi-unit second-price auction in which backers themselves can specify the price of an investment ticket. We exploit this unique auction mechanism to analyze backers’ willingness to pay for cash flow rights. We find that campaign characteristics, investor sophistication, progress in funding, herding, and stock market volatility influence backers’ willingness to pay in an economically meaningful manner, while geographic distance, learning effects, and sniping at the end of an auction have no effect.

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Language(s): eng - English
 Dates: 2017
 Publication Status: Issued
 Pages: -
 Publishing info: -
 Table of Contents: -
 Rev. Type: -
 Identifiers: DOI: 10.1007/s11187-016-9807-9
 Degree: -

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Title: Small Business Economics
Source Genre: Journal
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Publ. Info: New York : Springer
Pages: - Volume / Issue: 48 (4) Sequence Number: - Start / End Page: 795 - 811 Identifier: ISSN: 0921-898X
CoNE: https://pure.mpg.de/cone/journals/resource/954921410343