Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 5, 2020 erstellt
Description:
We study the information role of financing from connected individuals (e.g., family and friends) of entrepreneurs based on a crowdfunding platform and social media account login data. While financing from connected individuals is generally considered as a signal of high-quality projects, our results suggest that this might be a signal of funding performance manipulation. Entrepreneurs with moderate early funding performance strategically solicit investments from friends to encourage naïve investors to herd. Sophisticated investors discern manipulation and are less likely to invest. Manipulation exists even when sophisticated investors have significant market power and projects with manipulation deliver poorer funding performance