Title: What determines the growth expectations of early-stage entrepreneurs? Evidence from crowdfunding

Authors: Michael Beier; Kerstin Wagner

Addresses: Swiss Institute for Entrepreneurship, HTW Chur, Commercialstrasse 22, 7000 Chur, Switzerland ' Swiss Institute for Entrepreneurship, HTW Chur, Commercialstrasse 22, 7000 Chur, Switzerland

Abstract: Entrepreneurs have growth expectations when they plan and start their firms. Currently, measurements of growth expectations are mainly based on entrepreneurs' assessments of their growth path projections. However, these projections fail to consider market developments and are estimated for a long period. In our study, we use reward-based crowdfunding with a public setting on a free, accessible platform to measure (financial) growth expectations for early-stage entrepreneurial activity. Using a dataset of 740 projects published on one of the dominant crowdfunding platforms in Switzerland, we test how the growth expectations of (nascent) entrepreneurs are determined by: 1) individual characteristics; 2) the firm; 3) the intended business strategy. Our results highlight the importance of the individual, i.e., the early-stage entrepreneur, and of the intended strategy, while the venturing stage appears to have no effect on growth expectations. This paper offers new insights into how this new type of financing can be adapted to what is known in the field of nascent entrepreneurship and expected growth. Implications for research and practice are discussed.

Keywords: growth expectations; nascent entrepreneurs; startups; Switzerland; crowdfunding.

DOI: 10.1504/IJESB.2017.083839

International Journal of Entrepreneurship and Small Business, 2017 Vol.31 No.1, pp.12 - 31

Received: 12 Feb 2016
Accepted: 07 Oct 2016
Published online: 24 Apr 2017 *

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