Equity crowdfunding plays an increasingly important role in the financing of early-stage entrepreneurial ventures. While research on equity crowdfunding is quickly developing, no study has focused on how ventures that (successfully or unsuccessfully) applied for funding through equity crowdfunding platforms differ from ventures that never applied for funding from these platforms. Thus, we lack a deep understanding of the supply and demand in the equity crowdfunding market (Bruton, Khavul, Siegel & Wright, 2014).

Existing theories differ in their predictions about which ventures attract equity crowdfunding. Theories drawing on informational asymmetries, suggest that ventures will only raise external equity financing as a last resort (Myers, 1984). Thus, ventures of low quality or “lemons” (Akerlof, 1970) are expected to dominate equity crowdfunding platforms. However, by listing on crowdfunding platforms, entrepreneurs get more than only financing. They may obtain feedback from key stakeholders (e.g., future customers) and the “wisdom of the crowd” (Schwienbacher & Larralde, 2010) may serve as a superior selection filter so that some of the most promising ventures search for equity crowdfunding and get funded.