Kourosh Shafi

Gender Differences in the Contribution Patterns of Equity-Crowdfunding Investors

This paper investigates gender-differences in the behavior of investors in firms seeking equity financing. Using data from Swedish equity crowdfunding platform – Fundedbyme, we find that only 20% of investors are female. Female investors are less likely to invest in the equity of firms that are younger, high-tech, and have a higher percentage of equity offerings. This pattern seems consistent with a greater risk-aversion in female versus male investors. Furthermore, female investors are more likely to invest in projects in which the proportion of male investors is higher.

How Wise Are Crowd? A Comparative Study of Crowd and Institutions in Peer-to-Business Online Lending Markets

Funding small businesses used to be the exclusive domain of angel investors, venture capitalists, and banks. Crowd have only recently been recognized as an alternative source of financing. Whereas some have attributed great potential to the funding provided by crowd (“crowdfunding”), others have clearly been more skeptical. We join this debate by examining the performance of crowd to screen the creditworthiness of small and medium sized enterprises (SMEs) compared with institutions in the context of new online peer-to- business lending markets. Exploiting the randomized assignment of originated loans to institutions and the crowd in the online peer-to-business platform of FundingCircle, we find that crowd underperform institutions in screening SMEs, thereby failing to lend at interest rates that adjust for the likelihood of defaulting on a loan. Moreover, the underperformance gap of crowd compared with institutions widens with risky and small loans, suggesting that crowd lack the expertise to assess the risks or the incentive to expend resources to perform due diligence. Overall, our findings highlight when crowd face limitations in screening SMEs.

Initial Trust And The Collaborations Between New Ventures And Corporate Venture Capitals

Theories of initial trust formation posit two distinct perspectives, an institutional and a cognitive account. In an effort to overcome this conceptual impasse, we investigate relevant sources of institutional and cognitive trust in an integrative model and empirically assess the relative importance of each view. We use the context of new venture’s initial investment ties with corporate venture capital as these initial inter-organizational relationships are particularly fraught with great risks of misappropriation for new venture’s technological resources, and thus, the trustworthiness of corporate investors is an important consideration for new ventures. We find that institutional trust has no direct effect on initial trust in this context; however, not only cognitive processes producing expectations of trust have direct effect on initial trust, but also they moderate the relationship between institutional trust and initial trust.