What the Evidence Shows—and Where It Stops
This chapter evaluates the evidence behind the claim that prior equity crowdfunding can change how much a later VC round contributes to a venture's growth. The focus is what the study compares, how its several designs address selection, and how its direct-versus-nominee result should be interpreted. The practical judgment is deliberately bounded: readers should be able to distinguish a credible conditional pattern from a universal claim about crowdfunding.
What the study compares
The researchers assemble a panel of ventures that received venture capital in the United Kingdom, Germany, France, or Italy. They restrict the first financing round to the 2015–2021 period, add accounting information, and verify equity-crowdfunding exposure through commercial data and screening of major platforms in the four countries. They begin with 2,514 VC-backed ventures and construct matched counterparts that did not receive VC financing. The main tables contain 16,836 venture-year observations.
The unit of outcome is important. The study measures annual asset growth as the change in the natural logarithm of total assets from one year to the next. Assets are a useful indicator of whether a company is expanding its operating base, but they are not a complete measure of entrepreneurial value. A firm can add employees, revenue, productivity, innovation, or strategic capability without those changes appearing immediately or proportionately in total assets. Conversely, asset growth can reflect investment that does not ultimately produce a durable advantage.
The researchers therefore do not ask whether an ECF campaign was popular in the abstract. They compare post-investment trajectories for VC-backed ventures with and without prior ECF, then examine whether the relationship differs according to the shareholder structure used during the campaign. The comparison is aimed at separating two questions that are easy to confuse: whether a venture can attract a later VC, and whether the VC's post-investment effect is as strong once they arrive.
That comparison has two distinct baselines. The first asks how VC-backed ventures differ from firms without VC, which establishes the study's general VC-growth association. The second asks whether the post-VC change is different when ECF came first, which is the interaction of interest. A venture can look strong in the first comparison and still show a weaker incremental response in the second. Keeping the baselines separate prevents the prior crowdfunding result from being misread as a simple ranking of one type of company against another.
To make the comparison more credible, the authors combine coarsened exact matching with one-to-one propensity-score matching. They match on observed characteristics such as firm size, age, employees, country, and financial conditions, using lagged controls for several financial variables. After matching, the treatment and control groups are close on the measured covariates. This is useful because a simple comparison could otherwise mistake differences in size, financial health, or national market for an ownership effect.
Matching has a clear limit: it balances what the researchers can observe and include. It cannot guarantee that two ventures have the same product quality, founder capability, customer momentum, financing need, or unmeasured governance history. The authors explicitly treat endogeneity as a concern. A venture that chooses ECF may have been overlooked by traditional investors, may face a particular financing constraint, or may have characteristics that affect both the choice of crowdfunding and later growth.