Title

Equity crowdfunding: a systematic literature review on unfolding the returns mechanism confronts

Submission Type

Paper Presentation

Abstract/Description

The aftermath of Equity crowdfunding (ECF) has posed various challenges to rewarding mechanisms for ECF investors. The indicative price mechanism has remained controversial for shares buyback (early exit by investors) before maturity. From an equity investors' perspective, this study aims to review systematically the challenges faced by investors while exiting equity crowdfunding. Therefore, this study probes the following research questions: 'What equity pricing challenges do investors face for an early exit?' and 'How can these challenges to ECF be overcome? This study highlights the potential issues associated with the predictability of distribution of profits, reinvestment of profits, pricing of equity instruments and mechanism of early exits. This study systematically reviews the prevailing rewarding schemes for equity crowdfunding investors and the challenges associated with the valuation and disposal platform while quitting equity crowdfunding before its maturity. This review will enable the policymakers to redress the shortcomings in existing regulations. It will enable practitioners to formulate a framework that protects the funders from losses in case of early exits from ECF and fair pricing of equity instruments.

Session Chair

Dr. Mohamed Eskandar Shah Mohd. Rasid, Associate Professor, Hamad Bin Khalifa University (HBKU)

Start Date

31-5-2022 4:15 PM

End Date

31-5-2022 4:30 PM

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May 31st, 4:15 PM May 31st, 4:30 PM

Equity crowdfunding: a systematic literature review on unfolding the returns mechanism confronts

The aftermath of Equity crowdfunding (ECF) has posed various challenges to rewarding mechanisms for ECF investors. The indicative price mechanism has remained controversial for shares buyback (early exit by investors) before maturity. From an equity investors' perspective, this study aims to review systematically the challenges faced by investors while exiting equity crowdfunding. Therefore, this study probes the following research questions: 'What equity pricing challenges do investors face for an early exit?' and 'How can these challenges to ECF be overcome? This study highlights the potential issues associated with the predictability of distribution of profits, reinvestment of profits, pricing of equity instruments and mechanism of early exits. This study systematically reviews the prevailing rewarding schemes for equity crowdfunding investors and the challenges associated with the valuation and disposal platform while quitting equity crowdfunding before its maturity. This review will enable the policymakers to redress the shortcomings in existing regulations. It will enable practitioners to formulate a framework that protects the funders from losses in case of early exits from ECF and fair pricing of equity instruments.