Anchor investors and equity crowdfunding for entrepreneurs

Purpose - This empirical study uses herd behavior model to explore the role of anchor investors in ensuring fundraising success and overfunding of crowdfunded ventures. Design/methodology/approach - Qualitative comparative analysis (QCA) is applied to find the configurational patterns describing how anchor investors' information disclosure leads to successful financing and overfunding. Findings - Even when the anchor investor's resume is not detailed or the anchor investor has little experience in entrepreneurial investment, success or overfunding can be achieved, provided the anchor investor is a corporation rather than an individual. For individual anchor investors, a detailed resume matters. Overfunding can be achieved even when an individual anchor investor makes a small relative investment, if this small relative investment is compensated for by a detailed resume. Experience in entrepreneurial investment is crucial when individual anchor investors have few previous investments. Regardless of the anchor investor's identity, investment in absolute terms is crucial for crowdfunding success when experience in entrepreneurial investment is low. Such experience must be extensive if the anchor investor's resume is not detailed. Practical implications - Both entrepreneurs and crowdfunding platforms can benefit from the findings in relation to the design of campaigns that use anchor investors' informational cues to achieve success and overfunding. Originality/value - The study examines the importance of anchor investors' information disclosure in digital crowdfunding environments, differentiating between individual and corporate anchor investors.