The prize, endowed with 500 Euro, is granted by the German Federal Ministry of Economics and Technology together with the Leuphana Research Center for Entrepreneurship.
The paper examines the impact and signaling effects of crowdfinancing on subsequent venture capital funding rounds. Drawing on a choice experimental research design the author finds causal evidence that crowdfunding – relative to other prefunding sources – is often interpreted as a negative signal by professional venture investors, but that the “crowd” can nonetheless and under certain circumstances send positive signals increasing the likelihood of subsequent financing rounds.