Frederik Riar

2019

This study aims to give first evidence on investment decision-making in the equity-crowdfunding context. Using insights from traditional venture financing theory (e.g., business angels and venture capitalists), I explore how equity-crowdfunding investors make their investment decision and which criteria they use during the process. On top of that, the role of post-investment activities has been identified. Based on empirical evidence drawn from semi-structured interviews with 12 investors from the equity-crowdfunding platform WeFunder, a decision-making process model has been developed. I find that the process consists of a sequential chain of activities including deal sourcing, screening, validation, evaluation and post-investment activities next to the external influences law and the individual investment
strategy. Another interesting finding is that criteria applied during the process vary with the specific
stage. This thesis not only contributes to providing first insights in crowdfunding decision-making, but also offers investors, entrepreneurs, and crowdfunding platforms the opportunity to understand the factors underpinning and sustaining the crowdfunding investment process.