Corporate governance implications of new
methods of entrepreneurial firm formation
Bergamo, Italy, June 8, 2017
www.unibg.it/cgir2017 - email@example.com
Special Issue in
Corporate Governance: an International Review
Prof. David Ahlstrom, Prof. Douglas J. Cumming
and Prof. Silvio Vismara
From May 2016, small businesses and start‐ups can sell shares to the American general public on crowdfunding portals. The US Securities and Exchange Commission has indeed finally defined the rules that make equity crowdfunding a legal means by which to raise seed capital online. The crowdfunding phenomenon is now likely to spread globally.
Though an emerging field of study, a number of papers and special issues have already been dedicated to crowdfunding from different streams of research, including entrepreneurship, marketing and information systems. As in other entrepreneurial finance markets, information asymmetries between insiders and outsiders ingenerate agency concerns. As in IPOs, for instance, the ownership base of entrepreneurial ventures raising capital in crowdfunding is opened for the first time to external shareholders. Crowdfunding platforms allow fundraising from a pool of online backers, and will need to cope with collective action problems as crowd‐investors have neither the ability nor the incentive, due to the small investments, to devote substantial resources to due diligence. While the above mentioned collective action problems limit investors' monitoring incentives, entrepreneurs can be tempted to shirk and engage in self‐dealing. The perspective of corporate governance research is needed to address these questions.
To this end, new research papers could be developed around the following themes:
- How to treat agency conflicts arising from the separation between ownership and control (principal-agent) and between controlling and minority shareholders (principal‐principal) in crowdfunding markets?
- While most of recent IPOs are offered exclusively to institutional investors, crowdfunding investors are likely to be more diverse than shareholders of newly listed companies. How does this impact on corporate governance mechanisms?
- Existing papers on crowdfunding focus on the success factors of the campaigns. The ultimate goal of crowdfunding, however, is to build an enduring business. What happens after the campaigns?
- Globalization and technological innovation interact in their effect on crowdfunding, since the reduction in communications costs due to technological innovation have made cross‐border investments easier (e.g. reduced costs of monitoring investments over long distances). Which are the implications for the governance of entrepreneurial ventures?
- Corporate governance practices in crowdfunding differ across Countries. Will recent trends and innovation in financing means reduce such differences? Why should these be persistent? How can we differentiate the role of legal institutions from that of the culture and the social capital in determining such differences?
Silvio Vismara (University of Bergamo), Gaia Bassani (University of Bergamo)
University of Bergamo, via Salvecchio 19, Bergamo (Upper Town)
Important dates and deadlines
- 15 March 2017 - Deadline for submitting full papers to CGIR Workshop
- 30 March 2017 - Notification of acceptance
- 1 August 2017 - Deadline for submitting full papers to CGIR Special Issue