Seminar by Nir Vulkan, Oxford University. He examines (joint with Thomas Hellmann, Saïd School of Business, University of Oxford, and NBER) a central trade-off in entrepreneurial finance, namely the choice between ownership and investment.
Our empirical analysis exploits a unique feature of equity crowdfunding campaigns, where the entrepreneur can determine the amount of funds raised through the choice of when to bring a campaign to closure. The marginal decision to continue or stop is thus used to estimate the choice between ownership and investment. We consider several company characteristics that may affect this choice, including the gender of the founders, their commitment to the venture, their prior experiences, and their focus on control. The empirical analysis also identifies constraints emanating from the supply of capital. Among other things, this allows for an analysis to what extent lower fundraising amounts observed in all-female teams can be explained by demand versus supply factors.