How do backers manage investment uncertainty in equity crowdfunding?

This thesis aims to understand how investment uncertainty is managed in equitycrowdfunding (ECF). It does so by exploring backer behaviors at different stages ofthe investment decision process during funding windows, based on information andcommunication technology (ICT) and innovation. The included papers in this thesisare also linked to a conceptual model for an overall view of backer behaviors duringthis phase of the investment decision process. This expands the research on investmentdecision-making in this domain and provides insights regarding the management ofinvestment uncertainty in ECF. ECF is a result of the fintech revolution supported by ICT and innovation as keycatalysts. These catalysts have created a structural change in early-stage financing,which is burdened by investment uncertainty. Investment uncertainty arises frominformation asymmetry, and highlights the importance of information availability inmanaging uncertainty. However, the absence of face-to-face meetings withentrepreneurs and the lack of knowledge among backers are key concerns in theinvestment decision process. This reduces access to information and reduces thepossibility of making independent and accurate decisions. Hence, backers must find ways to obtain information, and ICT-driven innovations havebecome an important solution to this problem. In contrast to traditional fundingalternatives in this domain, ECF offers unique opportunities based on social capital (thewisdom of the crowd) and context (designed functionalities). These opportunities havefull potential during funding windows on digital platforms and come in the shape ofinteractions and collaborations vital for ICT-driven innovations. This thesis comprises four papers. Paper 1 analyses the conditions for ICT andinnovation that lead to structural changes. Paper 2 evaluates the characteristicsembedded in demand-driven signals from discussion boards. Paper 3 exploresinvestment dynamics based on signaling during funding windows. Finally, Paper 4examines investment strategies based on investor type and portfolio theory.Consequently, Paper 1 presents the conditions for this phenomenon to occur, whilePapers 2-4 explore how this affects backer behaviors in relation to theoretical modelsto draw conclusions about the management of investment uncertainty. Various patterns emerged from these studies. First, the drivers of ICT and innovationcan be clustered and positioned within the innovation lifecycle. Early in this lifecycle,they rely on networks based on interactions and collaboration for new knowledgeproduction. Second, backers tend to appreciate clarity in feedback loops (answers)based on demand-driven signals (questions) from discussion boards when evaluating.Third, some backers invest early, whereas others invest late and receive all availablesignals during the funding windows. Fourth, more sophisticated backers invest moreaggressively than less sophisticated ones. Hence, all patterns depend on ICT andinnovation, and enable conclusions about the management of investment uncertaintyduring funding windows in ECF.