Equity Crowdfunding for Sustainability: Unpacking Investor Behavior

Abstract

Equity crowdfunding has revolutionized sustainable entrepreneurship by circumventing traditional capital market barriers, enabling ventures to attract funding from a diverse online investor base. This study examines how investors' societal impact motivations influence the success of sustainability-oriented campaigns on equity crowdfunding platforms. Using collective action theory, it analyzes data from 521 investor surveys and transaction records from OnePlanetCrowd (2013-2018). Investors are classified into cooperators, conditional cooperators, and free riders via k-means clustering based on behavior and characteristics. Mediation analysis explores how conditional cooperation mediates the relationship between investors' societal impact motivation and campaign success metrics. Results indicate that investors driven by societal impact tend to act as cooperators or conditional cooperators rather than free riders. Conditional cooperation significantly accelerates funding times and boosts funding rates compared to free riding. The study identifies a positive indirect-only mediation effect of conditional cooperation on the link between societal impact motivation and campaign success. These findings underscore the importance of aligning societal values with venture missions to foster cooperative investor behavior in sustainable equity crowdfunding. Practical implications include optimizing campaign design and regulatory frameworks to support sustainable finance initiatives. This research enhances understanding of crowdfunding dynamics and offers practical guidance for stakeholders seeking financial support aligned with environmental and social goals.