Studies On The Factors Affecting The Success Rate Of Equity-based Crowdfunding

From 2015 to 2017,Premier Li Keqiang has emphasized strategy of "Double innovation " in the government work report for three years,which means to encourage people to start their own businesses and to make innovations.Double innovation is to promote China's economic development as a new impetus,and financing is the most important issue that new start-ups faced with.Under the influence of lots of internal and external factors,start-ups can not obtain funding from the traditional financing channels.The contradiction always exists in the financing difficulties for innovation Entrepreneurs on innovative project and limited channels for social public in investment.Along with the vigorous development of Internet finance,the equity crowdfunding in China presents the trend of accelerated development,which refers to a new financing model that Shareholders use the Internet to release and display project information to the public,and then obtain the necessary funds from the public,and give investors a certain number of equity in return.And it has the characteristics of “open,small,public”.The equity crowdfunding is a beneficial supplement to the traditional financing model,which mainly serves the small and medium enterprises,and has important practical impact for broadening the small and medium enterprises' financing channels,promoting capital formation,supporting innovation and starting a business,and improving multilevel market system.However,it is not easy to finance for a small start-up that wants to raise money by equity crowdfunding.The recent "2016 China crowdfunding industry development report " issued by Renchuang consulting shows that the success rate of equity crowdfunding projects are low,only 42%.In this context,this paper is based on the equity crowdfunding project on Toubang equity crowdfunding platform for the research object analysis,and hopes to offer advice and suggestions on increasing the success rate of China's equity crowdfunding.Firstly,this paper makes a thorough analysis on the literatures about the equity crowdfunding,and deepens the understanding of the financing model of equity crowdfunding.Then,it analyzes the influencing factors of this financing modele's success rate from three dimensions of community maintenance,project characteristics and other factors,so as to provide a theoretical basis for empirical analysis of this paper.In the empirical study,we use the Logit regression model which chooses 115 crowdfunding projects' data as sample data to make a binary logistic regression of the relevant variables,and find out the significant factors that influence the financing results of the equity crowdfunding,which are the number of interviews,the ratio of Leading investor.Through the above study on the success rate of equity crowdfunding,the mainconclusions of this paper are as follows:First,the more the number of project interviews or the higher the proportion of Leading investor,the more easily can the financing success;Second,investors are not concerned about the characteristics of the project information,and they will decide to invest as long as their preferences are meted and the project is feasible to invest,the quota of financing,project stage,project location,financing shares,etc.,they have no effect on the financing results.In view of above conclusions,this paper argues that the financing side should actively interact with investors and seek professional investment institutions.The equity crowdfunding platform should assist in the communication for both parties,implement strict project review and third-party trusteeship for crowdfunding fund;and government agencies should join hands to improve relative laws and regulations,build up access and exit mechanisms of crowdfunding platform,and do well in the education work of investors.