Does sustainability bring success? Sustainability in equity crowdfunding and sustainable investing

The 21st century can be characterized by increasingly loud conversation surrounding global sustainability issues and environmental concerns. The most novel form of crowdfunding, equity crowdfunding, has gained popularity and been proposed as the solution for easing the financial challenges of the sustainable ventures. This study complements the current literature by providing novel evidence on the relationship between sustainability and equity crowdfunding. The objective of this study is to examine both the impact of venture’s sustainability-orientation on its funding success in equity crowdfunding and investigate the demographic traits of the socially responsible investors. The empirical evidence is derived from one of the leading equity crowdfunding platforms in Europe, Invesdor. The unique data sample constitutes of 278 equity crowdfunding campaigns, 31396 unique investments and 24471 investors, covering a time period from May 2012 to November 2019. First, the findings of this study show that even though sustainability-orientation does not significantly increase the probability of campaign success, sustainable ventures are able to raise more capital and a higher number of investors and investments per campaign, in line with Vismara (2019). Second, investors’ demographic traits do predict their likelihood of investing in a sustainable venture. Notably, females tend to invest in sustainability-oriented equity crowdfunding campaigns. These findings complement the existing literature on sustainability in entrepreneurial finance and provide relevant implications for practitioners. Both sustainable ventures and equity crowdfunding platforms can benefit from the evidence provided at this study