Social media marketing for equity crowdfunding: Which posts trigger investment decisions?

Based on 26,883 investment decisions, we examine the influence of social media marketing on crowd participation in equity crowdfunding. We distinguish between different types of informative and persuasive posts on Facebook and Twitter. Informative posts provide investors with information about the crowdfunding campaign; persuasive posts do not, but rather aim to directly influence an investor's decision-making process. We find that both types of posts have a positive impact on the number of investments. However, persuasive posts also increase the amount of an investment if they contain a statement about the previous investment success of the campaign and signal to the crowd that they are not investing alone.

Automated summary

Based on a study of 26,883 investment decisions, this research examines the impact of social media marketing on crowd participation in equity crowdfunding. The study distinguishes between informative and persuasive posts on Facebook and Twitter. Informative posts provide information about the crowdfunding campaign, while persuasive posts aim to directly influence investor decision-making. The findings show that both types of posts have a positive effect on the number of investments. Additionally, persuasive posts that highlight previous investment success and signal that others are also investing contribute to higher investment amounts.