Paper Number

1618

Abstract

This study explores informal alliances among crowd investors, extending recent work on social networks in (equity) crowdfunding. Beyond formal alliances (such as investment syndicates), informal coordination based on social learning has proven highly relevant to the dynamics and outcomes of financing campaigns. Using data from a leading equity crowdfunding platform, we analyze the informal network structures of investors where ties are based on joint investments over time. We benchmark these networks against random network formation processes and find overwhelming evidence for deliberate network formation. Moreover, we explore how certain investor attributes affect the network’s structure. Specifically, this paper supports the notion that homophily drives social network formation, based on personal attributes such as gender and origin, but also on profile attributes (e.g. badges and images). Within the field of crowdfunding, this is one of the first studies to examine crowd investor networks both from an investor- and a cross-campaign perspective.

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