Why German Entrepreneurs Seek Equity via Crowdfunding?

Equity crowdfunding, financing a project or venture through many small investments of a large \ngroup of investors, has received growing attention from the media and scholars. This study \nfocuses on what motivates entrepreneurs to crowdfund in Germany. The study researched the \nmotivation of 11 entrepreneurs to use German equity crowdfunding platforms. This study uses \na research approach novel in the field of venture financing, the means-end approach. One of the \nfindings is that entrepreneurs use equity crowdfunding to successfully collect funds from rather \nemotionally investing crowdinvestors to finance their ventures’ future growth and to signal \ninvestment viability to follow-up investors. Crowdfunding also allows entrepreneurs to keep \ndecision-making power over the venture better than by using traditional sources of funding. \nThe findings indicate that crowdfunding attracts entrepreneurs who could not secure funding \nfrom other sources of capital as well as entrepreneurs who see the additional benefits it can \nprovide over other sources.