The Effect of Online Discussion Boards on Equity Crowdfunding Dynamics

Equity crowdfunding platforms provide investors the opportunity to engage with entrepreneurs and each other through online discussion boards. However, little is known about the effects of such discussion boards on crowdfunding dynamics. Based on the analysis of 264 campaigns comprising 5,916 funding day observations, we use the instrumental variable approach and establish a robust causal effect of discussion threads on fundraising dynamics. The effect is positive and loses its significance with an increasing number of discussion threads. Unlike prior research, our results show that the overall effect does not differ by discussion topics. However, interactions exist between discussion topics and venture characteristics. Product-focused discussions appear to be more influential for early stage ventures that have yet to generate sales. We discuss the implications of our results for entrepreneurs and investors as well as crowdfunding platforms and provide suggestions for future research.