Where Does the Crowd Fund – And How Does It Matter to Regional Entrepreneurship?

Abstract

Where does crowdfunding occur and what impact does it have on new firm starts and regional entrepreneurship? We find that crowdfunding occurs more often in regions with greater population, foreign born, and college educated and attending residents, and less often in regions with higher median household income, low educational attainment, and middle-aged residents. Clustering regions by these same variables, we find an increasing disparity in per capita crowdfunding in large cities relative to smaller cities, college towns, and poor regions with weak human capital. CF appears to precede regional entrepreneurship, yet that effect comes mainly from the less urban regions with less CF. While CF occurs less in the communities that might benefit most from it, it has greater impact when it does.