Backer behaviors – changing investment dynamics in equity crowdfunding markets

PurposeThis study aims to establish the shape of investment dynamics in equity crowdfunding to better understand backer behavior.Design/methodology/approachThis study provides insights into when backers invest in successful funding campaigns. It uses t-tests to compare differences in means between observation windows during successful funding campaigns. It is based on 4,938 transactions from 61 campaigns, focusing on the first and last tail ends.FindingsIn contrast to previous findings, the current investment dynamics seem more U-shaped than L-shaped. This supports previous findings about a strong start but also suggests a late collective attention effect. The strength is higher at the first tail end. However, differences in the later tail ends are statistically significant and emphasize the presence of late investment activities, especially in crowded or less complex campaigns.Practical implicationsThese findings emphasize the importance of signaling during the entire funding window. This encourages platforms to invest in user-friendly functionalities that guide entrepreneurs and help backers when investing in successful campaigns.Originality/valueThis study improves the understanding of backer behavior and suggests changing investment dynamics in equity crowdfunding. In addition, this pattern contrasts with previous findings on dynamic collective attention effects in rich digitally informative markets, implying two attention effects when uncertainty is high.