Beauty of Crowdfunding by Ryu Sunghan;

Author:Ryu, Sunghan;
Language: eng
Format: epub
Publisher: Taylor & Francis Group
Published: 2019-12-07T00:00:00+00:00

What researchers have found so far

A strand of research supports that crowdfunding is addressing (or has potential to address) the biases of the current capital markets.

Addressing the imbalance across the industries

Stevenson et al. (2019) found that crowdfunding has the potential to address the imbalance of the capital market across different industries. They combined the investment data from both VCs and Kickstarter in the United States. They specifically divided data into two time periods, 13 quarters each before and after the launch of Kickstarter in April 2009. They assessed the shares of investment for VCs and Kickstarter at the industry level, focusing more on the period after the launch of Kickstarter. As supposed, VC investment is highly concentrated on certain sectors, like technology and healthcare. More specifically, internet, mobile, and telecom (39.40%); health care (25.11%); and environment, energy, and mining (10.78%) sectors obtained the major portion of VC investment. The industries obtaining the least investment from VCs are leisure (0.05%), retail and traditional media (0.27%), and food and beverages (0.66%). Conversely, crowdfunding, Kickstarter in their study, appears to fill the gap in those sectors. Interestingly, leisure, retail and traditional media, and food and beverages are among three of the top industries obtaining most crowdfunding investment. Overall, the results support that crowdfunding is filling the lack of investment in the industries that have been neglected by VCs.

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