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Communications of the Association for Information Systems

Author ORCID Identifier

Jason Cherubini: https://orcid.org/0009-0000-0840-0947

Alan Hevner: https://orcid.org/0000-0003-4953-3900

Paul E. Spector: https://orcid.org/0000-0002-6881-8496

Abstract

Equity crowdfunding is a promising approach for entrepreneurs to raise new venture financing. This funding model relies on participation from many investors with fewer resources (the “crowd”) rather than a small number of investors with considerable resources. While variations of equity crowdfunding have been studied in international environments, recent legislation in the United States provides equity-based crowdfunding opportunities that have not been as heavily researched and may be more attractive to small investors. We utilize a design science research approach to develop and evaluate a conceptual model of small investor motivations and preferred incentive structures to support participation in equity-based crowdfunding. The model is tested through a survey of 320 U.S.-based equity crowdfunding investors. We identify key motivational factors influencing investment decisions in the U.S. environment, which we compare to similar studies from other countries. Our findings provide actionable insights via a decision process artifact for crowdfunding campaign designers to optimize their strategies, enhancing the success rates of crowdfunding campaigns. This research contributes to both theoretical understanding and practical applications in the field of entrepreneurship design. It empowers practitioners to leverage investor motivations effectively and strategically, ultimately contributing to more impactful and successful crowdfunding campaigns.

DOI

10.17705/1CAIS.05760

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