A groundbreaking academic study provides compelling evidence supporting the core principles of Crowd 2.0
The Research That Changes Everything
Since our founding, we at the Global Equity Crowdfunding Alliance (GECA) have advocated for a borderless approach to equity crowdfunding – what we call “Crowd 2.0.” We’ve maintained that with the right regulatory framework and industry collaboration, entrepreneurs could access capital from anywhere, and investors could participate in opportunities worldwide.
Now, pioneering research published in the Strategic Entrepreneurship Journal offers empirical validation of our vision while revealing a critical factor that must be addressed: investor attention.
The 2022 study – “What Drives Cross-Border Investments in Equity Crowdfunding? The Role of International Investor Attention” by Anna Lukkarinen and Markku V.J. Maula of Aalto University—provides the first comprehensive analysis of what truly drives international investment in equity crowdfunding campaigns.
The Data Speaks: Why Cross-Border Investment Matters
The researchers analyzed 17,191 investments across 187 campaigns on Invesdor, the first European platform with a MiFID license enabling cross-border equity crowdfunding. The results were striking:
- 40% of successful campaigns would have failed without cross-border investment
- A mere tripling of international page views increased cross-border investment odds by 60%
- 1,469 investments came from investors in 64 different countries
This data confirms what GECA has long advocated: a truly global approach to equity crowdfunding isn’t just desirable – it’s essential for campaign success.
The Attention Bottleneck
The study’s most important finding aligns perfectly with GECA’s advocacy for greater global accessibility: investors can’t invest in what they don’t see.
While regulatory barriers have received significant attention (and rightly so), this research reveals another critical barrier: limited investor attention. In the researchers’ words:
“A wealth of information creates a poverty of attention.”
The data shows a clear causal chain:
- Campaigns that receive more views from foreign countries are significantly more likely to receive investment from those countries
- Marketing activities targeted at foreign investors drive attention
- This attention directly translates to investment
Beyond Distance: The Digital Revolution
Perhaps most surprising was the finding that once investor attention is captured, traditional barriers like geographic distance, cultural differences, and institutional variations have minimal impact on investment decisions.
This validates GECA’s central premise: in a digital-first funding environment, artificial geographic boundaries should not limit capital flow.
The Four Pillars of Crowd 2.0: Research-Validated
This groundbreaking study provides empirical support for each of the four pillars of GECA’s Crowd 2.0 vision:
1. Cross-Border Collaboration
The research confirms that platforms with cross-border capabilities (like Invesdor’s MiFID license) enable significant international investment. However, it also reveals that regulatory access alone isn’t enough – active cross-border visibility strategies are essential.
2. Standardized, Smarter Regulations
The study demonstrates that where regulatory frameworks enable cross-border investment (as with MiFID II in Europe), investors do take advantage of international opportunities. This validates GECA’s call for harmonized global regulations.
3. A Thriving Secondary Market
While not directly addressed in the study, the findings on investor attention suggest that increased visibility of secondary market opportunities would similarly drive liquidity – a key GECA priority.
4. Education & Investor Empowerment
The research showed that investors are more likely to back campaigns when someone on the founding team shares their nationality. This highlights the importance of targeted education that helps investors understand opportunities across diverse contexts.
Implications for the Ecosystem
This research offers clear guidance for everyone involved in equity crowdfunding:
For Platforms:
- Invest in tools that enhance international campaign visibility
- Provide analytics on cross-border attention metrics
- Facilitate multilingual campaign materials
For Entrepreneurs:
- Highlight team diversity in campaign materials
- Allocate marketing budget specifically for international investor targeting
- Consider the attention economy as carefully as the funding target
For Regulators:
- Recognize that effective cross-border frameworks must address visibility, not just legal access
- Consider how investor education might vary across national contexts
- Support standardization that makes cross-border campaigns more discoverable
For GECA and Industry Associations:
- Advocate for attention-enhancing policies alongside regulatory reform
- Develop best practices for international campaign visibility
- Share cross-border success metrics that highlight attention factors
GECA’s Path Forward
As an alliance advocating for global equity crowdfunding, this research reinforces our mission while highlighting new dimensions for our work:
- Regulatory Advocacy: Continue pushing for harmonized frameworks that facilitate cross-border investment, with added emphasis on visibility enhancement
- Industry Standards: Develop best practices for international campaign marketing and attention metrics
- Education Initiatives: Create resources to help investors discover and evaluate cross-border opportunities
- Platform Collaboration: Facilitate knowledge sharing among platforms about effective international visibility strategies
Conclusion: Attention Is the New Currency
The findings from Lukkarinen and Maula’s landmark study validate GECA’s vision for Crowd 2.0 while revealing a critical insight: in the battle for cross-border investment, attention is as important as regulation.
As we work toward our vision of a borderless investment ecosystem, we must recognize that opening regulatory doors is only half the battle. We must also ensure investors can see through those doors to the opportunities beyond.
This is why GECA exists – to advocate for a world where innovation knows no borders, where capital flows freely to the best ideas regardless of geography, and where both regulatory frameworks and visibility mechanisms enable truly global equity crowdfunding.
To join GECA in advancing global equity crowdfunding, visit thegeca.org.
Download our Crowd 2.0 Manifesto to learn more about our vision for borderless equity crowdfunding.
Reference: Lukkarinen, A., & Maula, M. V. J. (2022). What drives cross-border investments in equity crowdfunding? The role of international investor attention. Strategic Entrepreneurship Journal, 16(1), 129-159. https://doi.org/10.1002/sej.1424
