Asia Pacific Journal of Emerging Markets (ISSN: 2706-5634)

Announcements: Call for Papers 2021 And Call for Papers 2022

DETERMINANTS OF FUNDERS’ INVESTMENT INTENTION TOWARDS EQUITY CROWDFUNDING IN MALAYSIA

Asia Pacific Journal of Emerging Markets, Vol. 7, No. 1, 2023 ISSN: 2706-5634

Authors: Heng Xiao Qing,  Ng Hui Chen

ABSTRACT

This research aims to study the impact of several risk factors, including investment risk (IR), legal risk (LR), and technology risk (TR), as well as perceived benefits, including financial return (FR) and social value (SV) on the funders’ investment intention (II) towards equity crowdfunding (ECF) in Malaysia. 107 valid responses out of 155 questionnaires were collected from individuals with prior knowledge of equity crowdfunding. Multiple linear regression was used to test the relationships based on the data collected using the SPSS software. Investigating the factors affecting funders’ investment intention towards equity crowdfunding showed that investment risk, legal risk, and financial return are statistically significant to the willingness of funders to invest in equity crowdfunding

INTRODUCTION

Crowdfunding, a platform that allows the individual or an organisation needing money and a group of individuals or entities willing to pool their resources in exchange for rewards, has disrupted the venture capital industry. There are 4 types of crowdfunding, i.e. rewards-based, donation-based, debtbased, and equity-based. Equity crowdfunding (ECF) is an alternative for startups, early-stage companies, and small businesses to raise capital from the public through online crowdfunding platforms (CFPs).

Keywords:  Equity crowdfunding, investment risk, legal risk, technology risk, financial return, social value

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