Human capital, investor trust, and equity crowdfunding

In equity crowdfunding, human capital is an important signal of a venture’s quality, as early-stage companies are risky and opaque to the market, and the crowd of investors is financially unsophisticated. Using a sample of 521 funded companies between 2011 and September 2017 on the platform Crowdcube, we show that the education, professional experience, and—more mildly—gender of team members materially affect the total capital raised, as well as the number of investors backing the initiative. Other attributes of human capital (such as volunteering experience) are instead ineffective.