This study seeks to gain a better understanding of equity crowdfunding. The role of gender in equity crowdfunding matters from the investor perspective, given the mutual observability and underlying social mechanisms of collective action that inform investment decisions. We show that gender cues are associated with how subsequent investors respond to past investments. Specifically, female investors seem to attract less follow-up funding relative to their male counterparts but also elicit more female participation. Based on similar to 68,000 investments covering 6.5 years of activity on Companisto (one of Europe's leading equity crowdfunding platforms), our results indicate gender bias against and homophily among women. We find that expert badges and profile photos moderate this effect, suggesting that also perceptions of gender role congruity are at play. In addition, results indicate gender differences with respect to investment preferences, financial commitment, and user representation.
Prior research suggests that venture capital (VC) markets rely on formal institutions to mitigate agency risks and transaction costs, and in their absence, informal institutions often step in to fill these institutional voids. Yet, despite similar institutional configurations across many emerging economies, thriving formal VC markets emerge in some but not in others, raising questions about the substitution hypothesis. To address this puzzle, we develop a framework that integrates human capital theory with an institutional perspective, arguing that formal and informal networking institutions are insufficient to explain VC market development in the absence of adequate market sophistication. To illustrate and validate this framework, we conducted 45 interviews across Pakistan's VC ecosystem, a context characterized by weak formal institutions and strong informal networking institutions. We find that limited sophistication among regulatory, fund management, and entrepreneurial actors constrains participation in the formal VC market, confining less sophisticated actors to informal financing channels and sustaining their reliance on them. Our framework reconciles the persistence of thriving informal financing markets alongside underdeveloped formal VC markets . We recommend targeted policy interventions to enhance inclusion in formal VC market by strengthening entrepreneurial and VC-specific capabilities.
This paper investigates the role of Venture Capital (VC) in the likelihood of delisting via mergers and acquisitions (M&A) for European companies listed in the 2004-2014 period, till 2020. Takeovers of listed companies are generally associated with underperformance, suggesting a need for a change in corporate control. In contrast, we show that VC-backed listed companies are more likely to be acquired when they exhibit higher growth rates compared to their peers. Moreover, this effect is driven by companies backed by low-reputation VCs. These VCs are known to rush their portfolio ventures to IPO and to have a limited post-IPO involvement. These conditions, combined with strong growth, may attract acquirers who perceive a need for change in corporate control. Conversely, we find no evidence of an increased likelihood of delisting by M&A in companies backed by highly reputed VCs, which tend to remain independent.
