Horizon CDT Research Highlights

Research Highlights

Capital Docking Dynamics on Crowdfunding Platforms for Entrepreneurs and Investors

  Jianwei Hu (2015 cohort)   www.nottingham.ac.uk/~psxjh7


Crowdfunding is a direct financing approach between relatively large number of small investors and campaign initiators of for-profit, artistic and cultural ventures excluding the participation of traditional financial intermediaries (Mollick, 2014) [1]. This research is designed to do some study on the capital docking dynamics on crowdfunding platforms from the perspective of entrepreneurs as well as investors, where big data technology will be adopted to collect and analyse the data sample from various crowdfunding platforms in China. Comparative studies among countries will also be conducted. The research on the massive dataset is supposed to shed some light on the signalling effect of the observable characteristics on the success of fundraising as well as on the success of the project.

Previous work on capital funding dynamics in crowdfunding

Although the crowdfunding industry is relatively new and limited research has been done, several literatures have done some exploratory study on its dynamics in different markets around the world grounded on small scale dataset.

  1. The U.S.: Mollick (2014) collected the campaign information of Kickstarter and claimed that personal networks, the direct project quality indicators and geography are related to the possibility of funding success. Hörisch (2015) creatively investigated into the influence of environmental orientation of crowdfunding projects on the success of financing stage grounded on Indiegogo [2].
  2. Europe: Agrawal et al. (2015) utilized Sellaband dataset and stated that local funders behave differently from distant funders and the information transfer in various social networks influences the funding process [3].
  3. Australia: Ahlers et al. (2015) included 104 efforts on ASSOB to test the impact of human capital, social capital, intellectual capital and uncertainty on fundraising success [4].
  4. China: Zheng et al. (2014) divided social capital into three dimensions including the structural capital, obligation capital and shared meaning and comments and researched into their correlation with funding success based on Demohour platform [5].

Main Research Questions

  1. How do project initiators signal their unobservable project quality by observable characteristics to get successful funding from the crowd? The tough quality indicator, the presentation style, the social capital and interaction with potential investors or other characteristics? How the dynamics varies by project industry?
  2. What characteristics available should be valued more by the small investors who cannot do due diligence in order to enhance their chance of investing in the successful project to get paid back? How the dynamics varies by project industry?
  3. How do leading investors impact the equity crowdfunding project?

Research Method

On one aspect, the qualitative research will be conducted via arranging a few interviews with questionnaires. Studies carried out with ventures capitalists, angel investors, governments and entrepreneurs are aimed at forming a full picture of their investment mechanism and giving inspiration of the project selection process of crowdfunding.

On the other aspect, quantitative approach utilizing the sufficient data pool provided by the flourishing crowdfunding market in China will be the backbone of this PhD. Grounded on the massive dataset collected by pypider, descriptive characteristics will be summarized and models along with hypotheses will be tested in a wide range.


  1. Mollick, E. (2014). The dynamics of crowdfunding: An exploratory study. Journal of Business Venturing, 29(1), 1-16.
  2. Hörisch, J. (2015). Crowdfunding for environmental ventures: an empirical analysis of the influence of environmental orientation on the success of crowdfunding initiatives. Journal of Cleaner Production, 107, 636-645.
  3. Agrawal, A., Catalini, C., and Goldfarb, A. (2015). Crowdfunding: Geography, Social Networks, and the Timing of Investment Decisions. Journal of Economics & Management Strategy, 24(2), 253-274.
  4. Ahlers, G. K., Cumming, D., Günther, C., and Schweizer, D. (2015). Signaling in equity crowdfunding. Entrepreneurship Theory and Practice, 39(4), 955-980.
  5. Zheng, H., Li, D., Wu, J., and Xu, Y. (2014). The role of multidimensional social capital in crowdfunding: A comparative study in China and US. Information & Management, 51(4), 488-496.

This work was carried out at the International Doctoral Innovation Centre (IDIC). The authors acknowledge the financial support from Ningbo Education Bureau, Ningbo Science and Technology Bureau, China's MOST, the University of Nottingham, and IDIC. The work is also partially supported by EPSRC grant no EP/L015463/1.