Does success bring success? The post-offering lives of equity-crowdfunded firms

Using an augmented dataset with combined information from Crowdcube, Crunchbase, and Companies House, we study the population of 212 successfully funded initial equity offerings on the UK's largest crowdfunding platform Crowdcube from inception (2011) to 2015. We find that 18% of these firms failed, while 35% pursued one or more seasoned equity offerings in the form of either private equity injection (9%) or follow-on crowdfunding offering (25%), while three firms were acquired. Among the determinants of the post-campaign scenarios, we find that the degree of investor participation in the initial offering plays a relevant role. In particular, firms with more dispersed ownership are less likely to issue further equity, while those that reach the target capital more quickly are more likely to launch a follow-on offering. Further, none of the companies initially backed by qualified investors subsequently failed.