This Is AuburnElectronic Theses and Dissertations

The Effects of Founders’ Competence, Integrity, and Demographic Characteristics on Equity-based Crowdfunders’ Investment Decision




Hersel, Matt

Type of Degree

PhD Dissertation




Scholars are increasingly exploring crowdfunding, a novel and rapidly growing source of new venture financing. A key part of this research has sought to explain what factors are important to the crowdfunding investment decision. In this dissertation, I seek to contribute to research concerning investor decision-making by exploring how a founder’s communication of reasons for investors to trust them influences equity-based crowdfunders’ investment likelihood. Specifically, I consider the research question: “Do founders’ assertions about their competence and integrity persuade crowdfunders to contribute capital to their venture in exchange for equity?” I also incorporate founders’ demographic characteristics as boundary conditions that may influence whether investors develop competence- and integrity-based trust with founders. I test my ideas through the use of policy capturing, a methodology that provides an internally valid test of how investors are making decisions about the ventures in which they invest. Results provide evidence that founders’ assertions about their trustworthiness have a positive influence on investment likelihood. Additionally, under certain circumstances, shared demographic characteristics between founders and investors serve as boundary conditions that influence whether founders’ communication of their trustworthiness will affect investment decisions.