Unsuccessful Equity Crowdfunding Offerings and the Persistence in Equity Fundraising of Family Business Startups

Abstract

Little is known about what happens after an unsuccessful equity crowdfunding campaign. Taking a socioemotional wealth perspective, we hypothesize that family business startups are more likely to eventually still raise equity financing relative to non-family business startups. Moreover, while family business startups are initially less likely to provide voting rights, we hypothesize that they are more likely to offer shares with voting rights after an unsuccessful campaign. Using data on the UK equity crowdfunding market, we find support for our hypotheses. This study adds novel insights into the nexus between equity crowdfunding and family business literature.