Networking with the Crowd: Start-Ups, Networks and Equity Crowdfunding

Abstract

Equity crowdfunding is an increasingly important source of entrepreneurial finance for new ventures. However, empirical research and theoretical development have struggled to keep pace with its growth. This paper outlines findings from a large-scale interview study of start-ups who obtained equity crowdfunding in the UK. It explores the personal and business networks involved in the equity crowdfunding process, taking a processual perspective. The empirical findings show that networks and social capital play a critical role in the crowdfunding process. Start-ups leverage, build and drawn upon a complex array of network actors and “ties” as they move through the different stages of their crowdfunding journey. The paper concludes that equity crowdfunding is a highly “relational” form of entrepreneurial finance requiring holistic forms of investigation. The implications for further research are outlined.