Equity Crowdfunding Dissertation
-
Upload
kyle-leslie-sim -
Category
Documents
-
view
89 -
download
4
description
Transcript of Equity Crowdfunding Dissertation
-
5/21/2018 Equity Crowdfunding Dissertation
1/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;
!"#$% '( )'*+%*+,
-$',,"./ '( !%.0, 11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 2
3 3*+.'456+7'* 11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 8
33 97+%."+5.% 111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 :
333 !;% 7,,%.+"+7'* 1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 :
!;% ?.7@7*, '( ).'A4(5*47*@ 111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 B
C12 )'*+%0='."./ ).'A4(5*47*@ 111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 B
C121C D%# 21EF ).'A4,'5.67*@ "*4
-
5/21/2018 Equity Crowdfunding Dissertation
2/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
6
-$',,"./ '( !%.0,
42)? +2 #=2 %32 %2)@= (7.0? =$"+('.0? 7*+%.0%47"./? ='.+"$
$.%2)A3>./2>B5& %* )2-2)2.A2 %32 6.'A4(5*47*@ %*+7+/ +;"+ ;',+, =.'X%6+,C
D2 #=2 %32 %2)@ 7,,5%.? %*+.%=.%*%5.? #5,7*%,,? =.'X%6+ 6.%"+'.%* )2-2)2.A2 +;% 7*47[745"$
'. %*+7+/ $''J7*@ +' ."7,% (5*4, *. > 6.'A4(5*47*@ =$"+('.0C
K%+"7$, 6$7%*+,F 7*[%,+'.,F #"6J%., >.,(5*4%., >)2 %3*=2+3* A*.%)$B#%2 -#.,= %*
A)*+,-#.,$./ 4)*E2A%=C
R3ZG>
)?\
-
5/21/2018 Equity Crowdfunding Dissertation
3/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
F
3 3*+.'456+7'*
()*+,-#.,$./ $= > +>& 42*452? *)/>.$=>%$*.= >., B#=$.2==2=? $.A5#,$./ B#=$.2== =%>)%G#4=?
A>. )>$=2 @*.2& %3)*#/3 *.5$.2 4*)%>5= HI.*+. >= A)*+,-#.,$./ 45>%-*)@=J %* -$.>.A2 *) )2G
-$.>.A2 %32$) >A%$K$%$2=C;
D3>% =%>)%2, >= > %)2.,& B#LL+*), 3>= 2K*5K2, $.%* @*K2@2.% %3>% 3>= %#).2, %32
%)>,$%$*.>5 -$.>.A$>5 @*,25 *. $%= 32>,C6M.A2 %32 5>=% )2=*)% -*) A>=3G=%)>442, >)%$=%= >.,
@#=$A$>.=? $% $= .*+ > -$)=% 4*)%>5 *- A>55 -*) 2.%)24)2.2#)= >., 2=%>B5$=32, B#=$.2==2= >5$I2 $.
A*.%2@45>%$*. *- -#.,)>$=$./ $.$%$>%$K2=C N. $%= O)22. 1>42) *. %32 5*./G%2)@ -$.>.A$./ *- %32
!#)*42>. !A*.*@&? %32 !#)*42>. (*@@$==$*. =$./52, *#% A)*+,-#.,$./ >= > =*#)A2 *- .*.G
%)>,$%$*.>5 -#.,$./ +*)%3 =#44*)%$./CF
1)2=$,2.% MB>@> 3>= ,2=A)$B2, %32 @*K2@2.% >= P>
4*%2.%$>5 />@2 A3>./2)Q -*) =%>)%G#4= >., =@>55 B#=$.2==2=C
=$A 4)2@$=2 *- A)*+,-#.,$./ $= 2R%)2@25& =$@452 S $- &*# 3>K2 >. $,2> -*) > 4)*,#A% *)
B#=$.2==? =I2%A3 $% *#%? 4)*%*%&42 $% >., =3>)2 %3>% $,2> *. > A)*+,-#.,$./ 45>%-*)@C T4)2>,
%32 +*), K$> =*A$>5 @2,$> >., 52% %32 42*452 ,2A$,2 -*) %32@=25K2=C O* K$)>5 >., %32)2 $= %32
4*%2.%$>5 %* )2A2$K2 -#.,$./ -)*@ 3#.,)2,= %* %32 3#.,)2,G%3*#=>.,= *- $.,$K$,#>5= +3*
2>A3 A*.%)$B#%2 > =#@ $. )2%#). -*) > %>./$B52 )2+>),CU @#=2#@ %* A*@@2@*)>%2 V$I*5> W *) $.K*I2
.*=%>5/$> %* )>$=2 %+* 3#.,)2, >., -$-%& %3*#=>., 4*#.,= -*) > XYG+$,2 %*#) *- !"##$ &"$'(
)*+ ,-'./"0C:
=% %+* &2>)= 3>= B)*#/3% =$/.$-$A>.% >A%$K$%& +$%3$. %32 $.,#=%)& =%>)%$./ +$%3 %32
$@452@2.%>%$*. *- %32 -$)=% 5>+= )2/#5>%$./ A)*+,-#.,$./ $. N%>5&? 4#B5$A A*.=#5%>%$*.= >.,
4*5$A& =%>%2@2.%= *. A)*+,-#.,$./ B& %32 X.$%2, Y$./,*@ >., !#)*42>. X.$*. >= +255 >=
%32 )>%$-$A>%$*. *- %32 Z#@4=%>)% M#) [#=$.2==2= T%>)%#4 HZM[TJ \A% $. %32 X.$%2, T%>%2=C N.
]>)A3 67;U? %32 -$)=% A)*+,-#.,$./ 4)*E2A% %* 3>K2 > .*%>B52 >., @2>.$./-#5 2R$% +>=
>..*#.A2, G %32 MA#5#= ^$-%? > K$)%#>5 )2>5$%& 32>,=2% %3>% +>= -#.,2, -*) .2>)5& %+* >., >
;_$.>.A$>5 (*.,#A% \#%3*)$%&? H67;UJ 1*+ 2345' 6+7-0")86$ "##68"/* )8 /689:;-
-
5/21/2018 Equity Crowdfunding Dissertation
4/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
U
3>5- @$55$*. +>= =*5, %* _>A2B**I -*) #4+>),= *- %+* B$55$*. ,*55>)=C8[>)25& 3*% *- %32 4)2==
>., .2+= %3>% %32 \%%*).2& O2.2)>5 *- D>=3$./%*. 3>, $.$%$>%2, 4)*A22,$./= >/>$.=% >.
2))>.% 4)*E2A% A)2>%*) %3>% ,$, .*% -#5-$5 3$= A>@4>$/. 4)*@$=2= A>@2 $. ]>& 67;U S %32 -$)=%
A>=2 2K2) -$52, >/>$.=% %32 A)2>%*)= *- > A)*+,-#.,2, 4)*E2A%C9
M. %32 +3*52? %32=2 >)2 2RA$%$./ %$@2= -*) %32 $.,#=%)&C Y.*+$./ %3>% -*) >55 %32 /)2>% =%)$,2=
$% 3>= @>,2 $% )2@>$.= $. $%= $.->.A&? > 42)$*, >+>=3 +$%3 4*%2.%$>5 >., 4)*@$=2 >+>$%$./
,$=A*K2)& $. A*@4>)$=*. %* *)%3*,*R -$.>.A$>5 @*,25=C d*+2K2) %32 *4%$@$=@ %3>%
=#))*#.,= $% @#=% B2 %2@42)2, B& %32 )2>5$=>%$*. %3>% %32)2 @#=% B2 > A*@4255$./ )2>=*.
+3& 4)$K>%2 2"#$%$2= 3>K2 .2K2) B22. =* +$,25& >., 4#B5$A5& >K>$5>B52 #.%$5 %*,>&C
33 97+%."+5.%
D3$52 A)*+,-#.,$./ 3>= B22. %32 =#BE2A% *- =*@2 >A>,2@$A )2K$2+? @#A3 *- %32 2R$=%$./
+*)I 3>= &2% %* B2 422)G)2K$2+2,C ]>.& >A>,2@$A +*)I= @>I2 )2-2)2.A2 %* > 67;7`=%#,&
B& TA3+$2.B>A32) %3>% A2.%)2, >)*#., > _)2.A3 =%>)% #4C T#B=2"#2.% +)$%$./= *. %32
=#BE2A% 3>K2 %>I2. *. > 3$/35& =42A$>5$=2, =5>.% %*+>),= #.,2)=%>.,$./ 3*+ %* =#AA2==-#55&
5>#.A3 4)*E2A%= %3)*#/3 %32 >.>5&=$= *- )25>%$*.=3$4= B2%+22. B>AI2)= >., 2.%)24)2.2#)= $.
=*@2 -*)@ *) >.*%32)C;75 -*)#@= *. %3$= %*4$A? $% 3>= B22. 52-% %* 5>+ -$)@=
>., =42A$>5$=2, $.%2)2=% /)*#4= %* 52>, %32 -*)2 +$%3 /*K2).@2.%= >., )2/#5>%*)= 45>&$./ >.
$.A)2>=$./5& >A%$K2 )*52 $. A*.=*5$,>%$./ +3>% 3>= B22. >A3$2K2, %3#= ->)C N% $= %3$= ,>%> >.,
)2=2>)A3 >5*./ +$%3 %32 >-*)2@2.%$*.2, =*#)A2= +3$A3 -*)@= %32 4)$@>)& )2=2>)A3 -*) %3$=
4>42)C
333 !;% 7,,%.+"+7'*. B2 =2/@2.%2, $.%* -*#) @>$. =2A%*)= S )2+>),=? ,*.>%$*.=?
52.,$./ >., 2"#$%&GB>=2, A)*+,-#.,$./C %$*. +$55 B2 -*A#=2, 4)$@>)$5& *. 3*+
8_>A2B**I? H67;UJC 2"/+@88F )8 4/G-.6+ H/-0-'C bM.5$.2c
9[>AI2)= 3>, .*% )2A2$K2, %32$) )2+>), *- > A#=%*@ ,2AI *- 45>&$./ A>),=C T%>%2 *- D>=3$./%*. K=C \=&5#@
We;e67;U b3%%40ee+++C>%/C+>C/*Ke#45*>,2,_$52=e\=&5#@(*@45>$.%f6767;UG7WG7;C4,-c`TA3+$2.B>A32) \ >., a>))>5,2 [? g()*+,-#.,$./ M- T@>55 !.%)24)2.2#)$>5 h2.%#)2=g b67;7c TT^V !52A%)*.$A
Z*#).>5;7
Y#44#=+>@& h >., [>= [? g()*+,-#.,$./ ()2>%$K2 N,2>=0 @$A= M- 1)*E2A%= [>AI2)= N. Y$AI=%>)%2)gb67;Fc TT^V !52A%)*.$A Z*#).>5j \E>& Y \/)>+>5? (3)$=%$>. (>%>5$.$ >., \K$ O*5,->)B? g43& M-
()*+,-#.,$./g H67;;J D*)I$./ 1>42) V*C ;:967 V>%$*.>5 [#)2># *- !A*.*@$A 2=2>)A3C
-
5/21/2018 Equity Crowdfunding Dissertation
5/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
W
)2/#5>%$*.= 42)%>$.$./ %* %32 2"#$%& @*,25 3>K2 B22. $@452@2.%2, >., $%= $@45$A>%$*.= -*)
%32 $.,#=%)&C
i2=4$%2 A*.=%$%#%$./ > @2)2 Wf *- %32 2.%$)2 A)*+,-#.,$./ $.,#=%)&;;
? $% +$55 B2 >)/#2, %3>%
2"#$%& A)*+,-#.,$./ $= B& ->) %32 @*=% )2K*5#%$*.>)& $. %2)@= *- $%= =A*42 -*) ,$=)#4%$*. %*
%32 52/>5? B#=$.2== >., -$.>.A2 5>.,=A>42=C;6
N% 3>= >5)2>,& /2.2)>%2, %32 @*=% )2/#5>%*)&
=A)#%$.& %3#= ->) >., #.5$I2 )2+>), >., ,*.>%$*. A)*+,-#.,$./ +3$A3 >)2 >% $%= 2==2.A2 E#=%
4)2G=>52= *- > 4)*,#A%? %32 =>52 *- =2A#)$%$2= >., =3>)2= 3>= >5+>&= B22. @*)2 %$/3%5&
)2/#5>%2,C ., %32 A3>552./2 -*) )2/#5>%*)=
+*#5, B2 $. ,)>-%$./ )#52= %3>% =%)$I2 > B>5>.A2 B2%+22. >,2"#>%2 4)*%2A%$*. -*)
=%>I23*5,2)= >., 4)*@*%$./ /)*+%3C 42) $= %* A)$%$"#2 %32 A#))2.%
)2/#5>%*)& )2/$@2 *. A)*+,-#.,$./ +$%3$. %32 XY >., %* *--2) >. >5%2).>%$K2 )2/#5>%*)&
)2/$@2 %3>% $= B2%%2) =#$%2, %* %32 %>=I *- 4*5$A$./ >., /)*+$./ %32 $.,#=%)&C
1>)% *.2 H;C;J +$55 B2 >. *K2)K$2+ *- %32 $.,#=%)& >., %)>AI= %32 *)$/$.= *- A)*+,-#.,$./C N%
+$55 2=%>B5$=3 +3>% %32 I2& ,)$K2)= B23$., A)*+,-#.,$./k= =3$-% -)*@ %)2., %* 432.*@2.*.?
A3>)%$./ %32 /)*+%3 *- %32 A)*+,-#.,$./ $.,#=%)& %3)*#/3 %32 &2>)= >= +255 >= 2R>@$.2 %32
K>)$*#= @*,25= *- A)*+,-#.,$./ $. 2R$=%2.A2 +$%3$. %32 A)*+,-#.,$./ $.,#=%)&C
N. 4>)% %+* H6C;J? > )2K$2+ *- %32 =%>%2 *- A)*+,-#.,$./ $. %32 X.$%2, Y$./,*@ +$55 B2
A*.,#A%2, %32. E#R%>4*=2, >/>$.=% ,2K25*4@2.%= $. N%>5& >., %32 X.$%2, T%>%2= >= +255 >=
5**I$./ $.%* %32 !#)*42>. X.$*.k= H!XJ )2=4*.=2= +$%3 )2/>),= %* 4*%2.%$>5 3>)@*.$=>%$*.
@2>=#)2=;F
C . 2R>@$.>%$*. *- %32 XY _$.>.A$>5 (*.,#A%
\#%3*)$%&k= H_(\J 1*5$A& T%>%2@2.% 1T ;UeU;U
*. A)*+,-#.,$./ )252>=2, $. ]>)A3 67;Uj
N%>5$>. )2/#5>%*) 38,,.''.8%$*. *.
;;()*+,=*#)A$./C*)/? g()*+,-#.,$./ N.,#=%)& 24*)%0 ]>)I2% %-*)@=g H]>==*5#%$*. aa( 67;6J;6
D*)5, [>.I? g()*+,-#.,$./k= 1*%2.%$>5 _*) 4#B5$A A*.=#5%>%$*. G P(*.=#5%>%$*. B& %32 !#)*42>. (*@@$==$*. *.
()*+,-#.,$./ $. %32 !X S !R45*)$./ %32 >,,2, K>5#2 *- 4*%2.%$>5 !X >A%$*.Q;U
>B*K2? . ;C ; G `WC;W@2 $= %32 N%>5$>. T2A#)$%$2= >., !RA3>./2 (*@@$==$*.C N% $= %32 /*K2).@2.%>5 >#%3*)$%& *- N%>5&
)2=4*.=$B52 -*) )2/#5>%$./ %32 N%>5$>. =2A#)$%$2= @>)I2%C
-
5/21/2018 Equity Crowdfunding Dissertation
6/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
:
A)*+,-#.,$./ %3>% +>= $@452@2.%2, $. 67;Fj %32 67;U ZM[T \A%;:
%3>% $= >+>$%$./
$@452@2.%>%$*. $. %32 XT >., %32 !Xk= 67;F A*.=#5%>%$*. 4>42) *. A)*+,-#.,$./C;8
1>)% %3)22 HFC;J =3>55 >.>5&=2 %+* A>=2 =%#,$2=j %32 -$)=% $= > )2A2.% =#AA2==-#5 A)*+,-#.,$./
4)*E2A% %3>% @$/3% 3>K2 ,2-)>#,2, B>AI2)= *- #4+>),= *- *.2 @$55$*. ,*55>)= >., %32
=2A*.,? > 4)*E2A% %3>% +>= %>I2. *--5$.2 E#=% B2-*)2 $% A*.A5#,2, -*) *.2 3#.,)2, >.,
%+2.%& %3*#=>., ,*55>)=C D2 ,)>+ 52==*.= -)*@ %3*=2 %+* 2R>@452= >., %32)2>-%2) @*K2
*. %* 4>)% -*#) HUC;J +3$A3 =%>)%= B& $,2.%$-&$./ %32 K>)$*#= =%>I23*5,2)= >., %32$) *BE2A%$K2=
B2-*)2 2R45*)$./ $,2>= -*) =25-G)2/#5>%$*.? A*@@#.$%& 4*5$A$./ >., %32 +$=,*@ *- A)*+,=C
_$.>55& HWC;J? +2 *--2) *#) %3*#/3%= *. >. >5%2).>%$K2 )2/#5>%*)& )2=4*.=2 $. *),2) %*
4)2=2)K2 %32 *BE2A%$K2= *- >55 =%>I23*5,2)= +3$52 >,K>.A$./ %32 /)*+%3 *- %32 $.,#=%)& >= >
+3*52C
;:
T42A$-$A>55& $.= %* 2"#$%& A)*+,-#.,$./C;8(*.=#5%>%$*. 4>42)0 P()*+,-#.,$./ $. %32 !X S !R45*)$./ %32 >,,2, K>5#2 *- 4*%2.%$>5 !X >A%$*.Q MA%*B2)
67;F? !#)*42>. (*@@$==$*.? g^2=4*.=2=
-
5/21/2018 Equity Crowdfunding Dissertation
7/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
8
!;% ?.7@7*, '( ).'A4(5*47*@
D3$52 %32 %2)@ A)*+,-#.,$./;9
$%=25- $= )25>%$K25& .2+? %32 #.,2)5&$./ @*,25 *- *B%>$.$./
@*.$2= -)*@ @2@B2)= *- %32 4#B5$A $. *),2) %* -#., > 4)*E2A% *) $,2> 4)$*) %* $%= >A%#>5 =>52
3>= $%= )**%= $. %32 !#)*42>. 4#B5$=3$./ $.,#=%)&k= ;9%3A2.%#)& 4)>A%$A2 *-#6", $.=4$)2, 1*42 =* @#A3 %3>% 32 +>= A*.=#@2, B& %32 $,2> *-
%)>.=5>%$./ $% -*) .>%$K2G!./5$=3 =42>I2)= %* >44)2A$>%2C \% %32 %$@2? $% +>= A*@@*. 4)>A%$A2
%* =22I >==$=%>.A2 -)*@ %32 /*K2).@2.% *) 4)$K>%2 4>%)*.>/2 %* -#., 5$%2)>)& *) A)2>%$K2
+*)I= 3*+2K2) >= > ^*@>.G(>%3*5$A $. > 1)*%2=%>.% !./5>.,? 32 +>= B>))2, -)*@ ,*$./
%3#=5&C
1*42 ,2A$,2, %3>% $.=%2>, *- 5**I$./ -*) > -2+ $.-5#2.%$>5 >., +2>5%3& B2.2->A%*)= %* B>AI
3$= 4)*E2A%? 32 +*#5, 5>#.A3 > =#B=A)$4%$*. %* %32 @>==2= S %32 4)$A2 +>= %+* /#$.2>= >., $.
2RA3>./2? %32& +*#5, B2 A)2,$%2, +$%3 B2$./ > =#B=A)$B2) *- %32 B**I >= +255 >= )2A2$K2
2>A3 A*4& >= $% +>= 4#B5$=32,C = > =#AA2== -#)%32) 5>#.A3$./ 1*42k= A>)22)C
]*)2 $@4*)%>.%5&? $. %32 A*.%2R% *- %3$= ,$==2)%>%$*.? $% $= 2K$,2.A2 *- *.2 *- %32 2>)5$2=%
$.A>).>%$*.= *- A)*+,-#.,$./ $. 4)>A%$A2C
C12 )'*+%0='."./ ).'A4(5*47*@
(*.A24%#>55&? A*.%2@4*)>)& A)*+,-#.,$./ =3>)2= =$@$5>) )**%= %* 422)G%*G422) 52.,$./ >.,
@$A)*-$.>.A$./C67
.A$./ >)2 ,$=%$./#$=32, B& %32$) ,242.,2.A2 *. =*A$>5
2.%2)4)$=26;
? >= A*@4>)2, %* *%32)= %3>% $.K*5K2 =*@2 @>..2) *- 4>==$K2 $.K2=%@2.%C66
;`\.$%> [)2AIB$55? H67;FJC ]#=$A 1#B5$=3$./ B& T#B=A)$4%$*. $. ;967= _)>.A20 \ 1)25$@$.>)& T%#,&C I8)+'? :`HFJ?
44CUWFGGU8;C67
%%2) A*.A24% 4$*.22)2, B& ]#3>@@>, l#.#=? 2A*.*@$=% >., V*B25 12>A2 1)$L2 )2A$4$2.% -)*@
[>./5>,2=3? +3* ,2K$=2, > @*,25 %* 2R%2., 5*>.= %* 2.%)24)2.2#)= +3* +2)2 %** 4**) *) 5>AI2, %32 =#--$A$2.%
A)2,$% 3$=%*)& %* "#>5$-& -*) %)>,$%$*.>5 B>.I 5*>.=C d2 4#% 3$= @*,25 %* +*)I B& A)2>%$./ O)>@22. [>.I0
B>.I$./ -*) %32 4**)C bO)>@22.G$.-*C*)/? H67;UJC D6",++< C"
-
5/21/2018 Equity Crowdfunding Dissertation
8/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
9
!>)5& #=2)= *- %3$= @*,25 3>K2 .*)@>55& B22. $.,242.,2.% >)%$=%= *) @#=$A$>.= 5**I$./ %*
%32$) ->.= %* =#44*)% >. #4A*@$./ %*#) *) >5B#@ )252>=2 +$%3 4)*E2A% B>AI2)= /2%%$./ (i=?
2RA5#=$K2 $.K$%2= %* A*.A2)%= *) >#%*/)>432, @2@*)>B$5$> *) 2K2. E#=% > =$@452 A>), $. %32
@>$5 =>&$./ %3>.I=C6F
5%2).>%$K2 A>4$%>5 =*#)A2 %* @>$.=%)2>@ -#.,$./ *4%$*. ,$, .*% 3>442.
*K2).$/3%? B#% +>= > A*.-5#2.A2 *- %3)22 =24>)>%2 ->A%*)= S %32 )$=2 *- %32 A)*+,=*#)A$./
@*K2@2.%? >,*4%$*. *- =*A$>5 @2,$> >., +2B 6C7 >., %32 -$.>.A$>5 A)$=$= *- 6779C
C121C D%# 21EF ).'A4,'5.67*@ "*4
-
5/21/2018 Equity Crowdfunding Dissertation
9/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
`
-22,B>AI $= .*% 5$@$%2, %* N.%2).2%GB>=2, B#=$.2==2= >5*.269
? >., $= 4>)% *- %32 +$,2)
@*K2@2.% *- /689:'8-6/..%2># *- PA)*+,Q >., P*#%=*#)A$./QF7
>., +>= -$)=%
$.%)*,#A2, $.%* %32 @>$.=%)2>@ 52R$A*. $. 677: B& Z2-- d*+2 $. Q.6+: ]>/>L$.2CF;
N.
D$I$42,$>? %32 ,2-$.$%$*. *- A)*+,=*#)A$./ $= =%>%2, >= B2$./j
P1*+ "/) 8; 8-)'8-6/.K*#)>B5& A*@4>)2, +$%3 %32 432.*@2.*. *- 8#+< .= 4)*42552, B& A3>./2= +$%3$. %32 )2>5@ *- A>4$%>5
-*)@>%$*. -*) 2.%)24)2.2#)= >., >)%$=%=C ,$%$*.>55&? %32 *4%$*.= >K>$5>B52 %* =%>)% > .2+
B#=$.2== *) B)$./ >. $,2> %* 5$-2 +>= 5$@$%2, %* B>.I 5*>.=? /*K2).@2.% /)>.%=? -)$2.,= >.,
->@$5&? >./25 *) =22, $.K2=%*)= >., K2.%#)2 A>4$%>5$=%=C N. %32 +>I2 *- %32 -$.>.A$>5 A)$=$= *-
69\ /**, 2R>@452 +$55 B2 %32 A*.=#5%>%$*. 4>42)= )252>=2, B& %32 K>)$*#= O*K2).@2.%>5 B*,$2=? 4#B5$A
A*.=#5%>%$*.= %>I2 $.%* A*.=$,2)>%$*. %32 K$2+= *- > ,$K2)=2 A)*+, *- 42)=*.= +3* 3>K2 > K2=%2, $.%2)2=% $.
-*)@#5>%$./ %32 B2=% 4*5$A$2=C6`
[2552-5>@@2? 1C? a>@B2)%? ., TA3+$2.B>A32)? \C H67;7JC ()*+,-#.,$./0 \. $.,#=%)$>5 *)/>.$L>%$*.
42)=42A%$K2C 44C6WGG6:CF7
!)$A TA32.I >., (5>#,2 O#$%%>),C H677`JC ()*+,=*#)A$./0 D3>% A>. B2 M#%=*#)A2, %* %32 ()*+,? >., D3&CF;
Z2-- d*+2C H677:JC
-
5/21/2018 Equity Crowdfunding Dissertation
10/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;7
6779? %32=2 =%>5+>)%= =A>52, B>AI =$/.$-$A>.%5& *. %32$) $.K2=%@2.% >., 52.,$./ >A%$K$%&CF9
[>.I= >., $.K2=%*)= +>)& *- 52.,$./ @*.2&? $.%)*,#A2, =42.,$./ A#%= >., >#=%2)$%&
@2>=#)2= +3$A3 @2>.% %3>% /)>.%= +2)2 -2+2) >., 3>),2) %* *B%>$.C a*>.= -*) =@>55 >.,
@2,$#@ 2.%2)4)$=2= 3>K2 ,2A5$.2, B& 6Ff *K2) )2A2.% &2>)=? +3$52 A*55>%2)>5 )2"#$)2@2.%=
3>K2 $.A)2>=2, B& FUf >., $.%2)2=% )>%2= B& WUfCF`
]*)2*K2)? $% $= +255 I.*+. %3>% 2>)5&G
=%>/2 B#=$.2==2= +3* >)2 4)2G)2K2.#2 *) +$%3*#% >==2%= 3>K2 >5+>&= -*#., $% ,$--$A#5% %*
=2A#)2 5*>.=? +3$A3 $)*.$A>55&? $= B&G>.,G5>)/2 %32 @*=% A*@@*. -*)@ *- A>4$%>5 -*)@>%$*.CU7
N. 4)*K$,$./ > .2+ =*#)A2 *- =22, *) 2>)5& =%>/2 A>4$%>5 4)$@>)$5& %* 4)2K$*#=5& #.,2)=2)K2,
B#=$.2==2= >., =2A%*)= *- =*A$2%& %3)*#/3 >. 2>=$5& >AA2==$B52 @2,$#@? A)*+,-#.,$./
4)*@$=2= %* ,2@*A)>%$=2 >., 2R4>., %32 >AA2== %* A>4$%>5 B& >55*+$./ %32 A)*+, %*
,2%2)@$.2 +3$A3 $,2> +>= +*)%3 -#.,$./ *) >= d*+2 =%>%2=j
[Q*8 @+))+6 )8 :+/.:+ "K2 &2%
%* B2 -$.>5$=2,C
F9[>.I *- !./5>.,? H67;FJC Q86F.. ()*+,-#.,$./ V2%+*)I? H67;FJC b+=.+9 8; 3689:;-5=* %32 4#B5$=32)= *- %32 ]>==*5#%$*. ()*+,-#.,$./ N.,#=%)& 24*)%? > 52>,$./ )2=2>)A3
4#B5$A>%$*. *. %32 $.,#=%)&CUF()*+,=*#)A$./C*)/? H67;UJC &.6+/)86$ 8; K.)+'C b*.5$.2c
UU$B$,C
-
5/21/2018 Equity Crowdfunding Dissertation
11/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;;
N. 67;6? V2=%>UW
A*.,#A%2, )2=2>)A3 *. %32 >5%2).>%$K2 -$.>.A2 @>)I2% >., -*#., %3>%
A)*+,-#.,$./ 3>, /)*+. B& `;f -)*@ -*#) 3#.,)2, >., .$.2%&G%+* @$55$*. 4*#.,= $. 67;6
%* .$.2 3#.,)2, >., %3$)%&G.$.2 @$55$*. 4*#.,= $. 67;FCU:
N.K2=%@2.%GB>=2, A)*+,-#.,2,
45>%-*)@= )>$=2, %+2.%& 2$/3% @$55$*. 4*#.,= $. %32 XY 5>=% &2>)U8
+3$A3 )24)2=2.%= > :;9f
$.A)2>=2 -)*@ 67;6 %* 67;FCU9
N. A*@4>)$=*. %32 p;WC8 B$55$*. )>$=2, B& A*@4>.$2= E*$.$./
%32 a*.,*. T%*AI !RA3>./2 K$> A*.K2.%$*.>5 =3>)2 *--2)$./=U`
,+>)-= %32 2"#$%&
A)*+,-#.,$./ @>)I2%? +3$A3 /*2= %* %32 4*$.% %3>% %3$= $= >. $.,#=%)& *. >. #4+>),
%)>E2A%*)&C
C18 I'A ).'A4(5*47*@ A'.J,
a$I2 A)*+,=*#)A$./? A)*+,-#.,$./ $= 4)2,$A>%2, *. %32 $,2> *- #=2)= *- *.5$.2 =*A$>5
.2%+*)I= *) A*@@#.$%$2= B>.,$./ %*/2%32)? $% $= ,$=%$./#$=32, >= P-#.,$./Q B2A>#=2 #=2)=
452,/2 -#.,= $.=%2>, *- A*.%2.% *) 2--*)%C
\% $%= 2==2.A2? A)*+,-#.,$./ 2.%>$5= %32 4#B5$A =*5$A$%>%$*. *- -#.,= *K2) %32 N.%2).2% -*) >
=42A$-$A 4)*E2A%? $,2> *) B#=$.2== S $. @*=% $.=%>.A2=? %32)2 $= > %>./$B52 )2+>), *--2)2, $.
2RA3>./2 -*) %32 @*.$2=C %2, *. %32 $,2> *- @>.& $.,$K$,#>5=
A*.%)$B#%$./ =@>55 >@*#.%= %* =22 %32 4)*E2A% A*@2 %* -)#$%$*. >., *B%>$. > )2+>), -*) %32$)
452,/2C
)/2=% A)*+,-#.,2, 4)*E2A%? -*) .*+? $= %32 12BB52 =@>)%+>%A3 +3$A3 )>$=2,
*K2) %2. @$55$*. ,*55>)= -)*@ .2>)5& 8777 $.,$K$,#>5 B>AI2)= *. %32 Y$AI=%>)%2) 45>%-*)@CW7
= > +>%2)=32, @*@2.% $. %32 =3*)% 3$=%*)& *- A)*+,-#.,$./? *.2 %3>% 32)>5,2, $%=
)$=2 >= > -*)A2 %* B2 )2AI*.2, +$%3C [>.I2)= .*%$A2,? K2.%#)2 A>4$%>5$=%= .*%$A2,? >., @*=% *-
>55? > /2.2)>%$*. *- >)%$=%= >., 2.%)24)2.2#)= .*%$A2,C Y$AI=%>)%2) B25*./= %* %32 A>%2/*)& *-
UW\ [)$%$=3 .*.G/*K2).@2.%>5 *)/>.$L>%$*. >., $. A*55>B*)>%$*. +$%3 X.$K2)=$%& *- (>@B)$,/2 >., X.$K2)=$%& *-
[2)I52&U:
V2=%>? H67;FJC 1*+ b.'+ H; 2-)-6+ 2.
-
5/21/2018 Equity Crowdfunding Dissertation
12/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;6
A)*+,-#.,$./ I.*+. >= )2+>), *) 4)2G-$.>.A$./ A)*+,-#.,$./CW;
@$.2 2>A3 *- %32 -*#) -#.,$./ @*,25= $. %#).C
C181C !;% >'*"+7'* G'4%$
5 2.%)24)2.2#)= +3* #%$5$=2 A)*+,-#.,$./ 45>%-*)@= -*) A3>)$%>B52
2.,2>K*#)=C [>AI2)= >)2 @*%$K>%2, %* A*.%)$B#%2 B>=2, *. %32$) *+. >5%)#$=@ >., .*)@>55&?
.* %>./$B52 )2+>), $= *--2)2, $. 2RA3>./2C ]>.& .*.G4)*-$%= >., .*.G/*K2).@2.%>5
*)/>.$=>%$*.= )25& *. %3$= @*,25 %* )>$=2 -#.,= -*) %32$) 4)*E2A%=C
\ /**, 2R>@452 *- ,*.>%$*. A)*+,-#.,$./ $. >A%$*. +*#5, B2 [>)>AI MB>@>k= 67;6
1)2=$,2.%$>5 (>@4>$/. S *#% *- %32 =2K2. 3#.,)2, >., -$-%& @$55$*. ,*5>5)= 32 )>$=2, -)*@
$.,$K$,#>5 ,*.*)=j =$R 3#.,)2, @$55$*. ,*55>)= A>@2 -)*@ F @$55$*. ,*.*)= %3)*#/3 3$=
+2B=$%2 B>)>AI*B>@>CA*@? %32 /)2>% @>E*)$%& .2K2) 2R42A%$./ >.& =*)% *- )2+>),CW6
C1812 !;% K%A".4 G'4%$
), A)*+,-#.,$./ 3>= B22.
>=%#%25& A*@4>)2, +$%3 P4)2G=255$./Q B& #=$./ B>AI2)= >= 2>)5& A#=%*@2)= +$%3$. %32
B#=$.2== ,2K25*4@2.% =%)#A%#)2CWF
N.,$K$,#>5= *) *)/>.$=>%$*.= *--2) > %$2)2, =2)$2= *-
$.A2.%$K2= -*) ,*.>%$*.=C [>AI2)= +3* ,*.>%2 > =@>552) >@*#.% >)2 )2+>),2, +$%3 > A>), *-
%3>.I= *) @2.%$*. K$> =*A$>5 @2,$>? +32)2>= ,*.*)= 452,/$./ 3$/32) >@*#.%= @$/3% B2
)2+>),2, +$%3 > 4)*,#A%? A#=%*@$=>%$*. *- > 4)*,#A% *) =*@2 -*)@ *- 42)=*.>5$=2,
)2A*/.$%$*.CWU
V*%>B5&? Y$AI=%>)%2) $= %32 :+ ;"/)8 52>,2) >A)*== %32 A)*+,-#.,$./ $.,#=%)&
+$%3 *K2) *.2 B$55$*. ,*55>)= $. 452,/2= -)*@ WC8 @$55$*. B>AI2)=CWW
D$%3$. %3$= @*,25 $%=25- >)2 %+* %&42= *- *--2)$./= %3>% >)2 #.$"#2 %* %32 45>%-*)@ S -$)=%5&?
Y$AI=%>)%2) *42)>%2= >. >55G*)G.*%3$./ %&42 *- 4)*E2A% +32)2 #.52== %32 @*.2%>)& /*>5 =2% B&%32 4)*E2A% A)2>%*) $= )2>A3? >55 @*.$2= +$55 B2 )2-#.,2, %* B>AI2)=C -52R$B52
W; 2A>40 )& @*,25= $. 2R$=%2.A2 >)2 ,*.>%$*.? 52.,$./ *) 5*>. >., 2"#$%&e$.K2=%$./C
)2 B2&*., %32 =A*42 *- ,$=A#==$*.C D*)%3 @2.%$*.$./ >)2 *%32) .$A32 @*,25=
=#A3 >= N.K*$A2 ,2)= H@>)I2%$.K*$A2CA*@J >., =42A$>5$=% 52.,2)= =#A3 >= % *42)>%2 $. %32
)2.2+>B52 2.2)/& @>)I2%=CW6
Y2K$. a>+%*. >., i>. ]>)*@C 1*+ 3689:;-%*)& T%#,& H67;UJ 6` Z*#).>5 *- [#=$.2==
h2.%#)$./ 4/ FCWUN% $= )252K>.% %* .*%2 %3>% %32 )2+>), ,2)$K2, B& %32 B>AI2) $= .2K2) @*.2%>)& $. .>%#)2C
WWY$AI=%>)%2)CA*@? H67;UJ H
-
5/21/2018 Equity Crowdfunding Dissertation
13/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;F
-#.,$./ *4%$*. +32)2#4*. >55 @*.$2= 452,/2, >)2 I24% B& %32 4)*E2A% A)2>%*)= +32%32) *)
.*% %32 @*.2%>)& %>)/2% $= )2>A32,C
C1818 !;% 9%*47*@ G'4%$
a*>.GB>=2, A)*+,-#.,$./ 3>= > 5*./ 3$=%*)& +$%3$. %32 $.,#=%)& %3*#/3 $% $= #=#>55&
A>%2/*)$=2, >= 422) %* 422) H464J *) 422) %* B#=$.2== H46BJ 5*>.=CW: d*+2K2)? %32)2 3>=
B22. > /)>,#>5 =3$-% %*+>),= 45>A$./ 52.,$./ #.,2) %32 >@B$% *- %32 A)*+,-#.,$./ ->@$5&C
.A$./ $= #=2, +32)2 $.,$K$,#>5 52.,2)= H)2%>$5 $.K2=%*)=J /$K2 *#% 5*>.= %*
*%32) $.,$K$,#>5= *) B#=$.2==2= 2R42A%$./ %* 2>). >. $.%2)2=% *-- %32 5*>. >= +255 >=
)24>&@2.% *- %32 A>4$%>5 *K2) %$@2C N. A*@4>)$=*. %* 2"#$%&GA)*+,-#.,$./? )2/#5>%*)= 3>K2
-*#., $% %* B2 52== )$=I& >., 3>K2 2$%32) %>I2. > 5$/3%G%*#A3 >44)*>A3 *) A3*=2. %* .*%
$@4*=2 )2/#5>%$*.= *. %32 $.,#=%)& >% >55CW8
C181: !;% LM57+/ G'4%$
X.,2) %3$= @*,25? B#=$.2==2= >., 2.%)24)2.2#)= 5**I$./ %* )>$=2 A>4$%>5 %* =%>)% > B#=$.2==
*) /)*+ >)2 >B52 %* 5$=% %32$) $,2> *. A)*+,-#.,$./ 45>%-*)@= >., $.%2)@2,$>)$2= >-%2)
=#B@$%%$./ B>=$A ,$=A5*=#)2 )2"#$)2@2.%= >., > B#=$.2== 45>.C N.K2=%*)= >)2 %32. >B52 %*
4#)A3>=2 >. 2"#$%>B52 =%>I2 $. #.5$=%2, >., 4)$K>%2 A*@4>.$2=C
N.K2=%@2.%= >)2 )2+>),2, +$%3 %32 A*))25>%$./ 2"#$%>B52 =%>I2 2$%32) 325, B& %32 $.,$K$,#>5
$.K2=%*) %32@=25K2= *) %3)*#/3 > .*@$.22 H#=#>55& %32 A)*+,-#.,$./ $.%2)@2,$>)&JC N.
2RA3>./2 %32 $.%2)@2,$>)$2= %>I2 > 42)A2.%>/2 *- %32 >@*#.% )>$=2, >= +255 >= -22= -*) ,#2
,$5$/2.A2 >., >.& 4)*-$%= )2>5$=2, -)*@ ,$K$,2.,= *) 2R$%= $. %32 -#%#)2CW9
.A$>5 (*.,#A% \#%3*)$%& A5>==$-$2= =2A#)$%$2= >., =3>)2= -)*@ 2"#$%& A)*+,-#.,$./ >=
m.*.G)2>,$5& )2>5$=>B52 ,2B% =2A#)$%$2=kW` $. 5$.2 +$%3 %32 3$/35& $55$"#$, >., 3>), %* 4)$A2
.>%#)2 *- %3*=2 =2A#)$%$2= %3>% >)2 B2$./ 4)*@*%2,C
W:_#.,$./A$)A52CA*@ >., q*4> B2$./ %32 52>,$./ 45>%-*)@ *- ,2B% B>=2, A)*+,-#.,$./ >., 161 52.,$./ $. %32
XY +$%3 *K2) p:W7 @$55$*. +*)%3 *- 5*>.= $. B*%3 %32 161 >., 16[ >)2.>=C b1)*==2)? iC H67;UJC ^] C6.).'* 3689:?
2-
-
5/21/2018 Equity Crowdfunding Dissertation
14/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;U
C1: >%(7*7+7'* '( ).'A4(5*47*@
4%2) 3>= ,$=A#==2, >% 52./%3 %32 *)$/$.= *- A)*+,-#.,$./? $%= *42)>%$*. >., $%=
K>)$*#= =#B=2%= >., K>)$>%$*.=C )2=% >)%$A#5>%$*. *- B& [2552-5>@@2 +) "0? %3>% B2$./j
P()*+,-#.,$./ $.K*5K2= >. *42. A>55? @*=%5& %3)*#/3 %32 N.%2).2%? -*) %32 4)*K$=$*.
*- -$.>.A$>5 )2=*#)A2= 2$%32) $. -*)@ *- ,*.>%$*. *) $. 2RA3>./2 -*) =*@2 -*)@ *-
)2+>), >.,e*) K*%$./ )$/3%=CQ:7
:7\B*K2? . 6;C 1/ 8C
-
5/21/2018 Equity Crowdfunding Dissertation
15/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;W
21C K%@5$"+'., "*4 K%@5$"+7'*,
N. >. *42. 52%%2) %* %32 T2A#)$%$2= >., !RA3>./2 (*@@$==$*. HT!(J *. %32 ZM[T \A%? D$55$>@
O>5K$.? T2A)2%>)& *- %32 (*@@*.+2>5%3 -*) ]>==>A3#=2%%= A*@@2.%2, %3>% 32 B25$2K2,
)252>=$./ 4)$K>%2 2"#$%$2= -*) =>52 %* %32 4#B5$A 2K2. $- /*K2).2, B& %32 +$=,*@ *- %32 A)*+,
>., A*552A%$K2 ,2A$=$*. @>I$./? +$55 =%$55 >55*+ #.=A)#4#5*#= $.,$K$,#>5= B2.% *.
@$=)24)2=2.%>%$*. >., -)>#, %* -522A2 $.K2=%*)= *- %32$) @*.2&C:;
% )$=I *- -)>#, $= -#)%32) A*@4*#.,2, B& %32 _$.>.A$>5 (*.,#A% \#%3*)$%&k= +>).$./ *.
%32 )$=I *- A)*+,-#.,$./ *. %32$) +2B4>/2j
PN% $= K2)& 5$I25& %3>% &*# +$55 5*=2 >55 &*#) @*.2&C ]*=% $.K2=%@2.%= >)2 $. =3>)2= *) ,2B%
=2A#)$%$2= $. =%>)%G#4 A*@4>.$2= >., +$55 )2=#5% $. > ;77f 5*== *- A>4$%>5 >= @*=% =%>)%G#4
B#=$.2==2= ->$5CQ:6
% >)2 $.32)2.% $. 2"#$%& A)*+,-#.,$./ $= 45>$.5& *BK$*#= >., %32 %>=I *-
)2/#5>%$./ %3$= =2A%*) $= >. #.2.K$>B52 *.2 S %32 T!(? _(\ >., (MVTM[ 3>K2 2>A3 %>I2. >
,$--2)2.% >44)*>A3 %* )2/#5>%$*.C
N. %3$= A3>4%2) +2 2R>@$.2 %32 K>)$*#= )2/#5>%*)& )2=4*.=2= %* %32 A)*+,-#.,$./
@*K2@2.%C A2)%>$. 2R%2.%? 2K2)& $.,$K$,#>5 A*#.%)& 3>= >%%2@4%2, %* >==$@$5>%2
A)*+,-#.,$./ +$%3$. %32$) 2R$=%$./ )2/#5>%*)& -)>@2+*)IC
2121C O*7+%4 P7*@4'0
.A$>5 (*.,#A% \#%3*)$%&k= ]>)A3 67;U 1*5$A& T%>%2@2.% ;UeU:F
$. ]>)A3 67;U =2%=
-*)%3 %32$) )2=4*.=2 %* %32 A*.=#5%>%$*. 4>42) (1;Fe;F *. A)*+,-#.,$./C %2 %32 5*>. >., 2"#$%& B>=2, @*,25= *- A)*+,-#.,$./ +$%3 %32 *K2)>)A3$./ *BE2A%$K2
*- =2A#)$./ >. >44)*4)$>%2 ,2/)22 *- 4)*%2A%$*. -*) A*.=#@2)= >., 4)*@*%$./ 2--2A%$K2
A*@42%$%$*. $. %32$) B2=% $.%2)2=%=C:U
:;d2 #=2= %32 2R>@452 *- 42..& =%*AI= >., 4#@4 >., ,#@4 =A32@2= %3>% 3>K2 52-% @>.& $.K2=%*)= +$%3 32>K&
5*==2=C O>5K$.? DC H67;6JC 38,,+
-
5/21/2018 Equity Crowdfunding Dissertation
16/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;:
%*)& )#52= 4)*4*#.,2, B& %32 _(\ >)2 %32 )2"#$)2@2.% -*) %32 $.%2)@2,$>)&
%* B2 )2/$=%2)2, >., >#%3*)$=2,:W
? +$%3 %32 @>R$@#@ %3)2=3*5, 42) $==#2) 2K2)& ;6 @*.%3=
B2$./ .* @*)2 %3>. !X^ -$K2 @$55$*.C = .*% =%$4#5>%2, >.& 4)*=42A%#=
)2"#$)2@2.%= -*) $==#2)= B#% 45>%-*)@= 3>K2 %32 ,#%& %* 2.=#)2 %3>% >55 $.-*)@>%$*.
4)2=2.%2, %* )2%>$5 A5$2.%= %>I2. >= > +3*52? $= n->$)? A52>) >., .*% @$=52>,$./Cn::
%*)& 4#=3 +>= %* )2/#5>%2 %32 %&42 *- 42)=*. +3* +*#5, B2 2R4*=2, %*
4)*@*%$*.= *- .*.G)2>,$5& )2>5$=>B52 =2A#)$%$2= HV^^TJ:8
C M.5& $.K2=%*)= +3* >)20
4)*-2==$*.>5 A5$2.%=j )2%>$5 A5$2.%= +3* A*.-$)@ %3>%? $. )25>%$*. %* %32 $.K2=%@2.% 4)*@*%2,?
%32& +$55 )2A2$K2 )2/#5>%2, $.K2=%@2.% >,K$A2 *) $.K2=%@2.% @>.>/2@2.% =2)K$A2= -)*@ >.
>#%3*)$=2, 42)=*.j )2%>$5 A5$2.%= +3* >)2 K2.%#)2 A>4$%>5 A*.%)>A%*)= *) A*)4*)>%2 -$.>.A2
A*.%)>A%*)=j )2%>$5 A5$2.%= +3* >)2 A2)%$-$2, *) =25-GA2)%$-$2, >= =*43$=%$A>%2, $.K2=%*)j )2%>$5
A5$2.%= +3* >)2 A2)%$-$2, >= 3$/3 .2% +*)%3 $.K2=%*)=j >., )2%>$5 A5$2.%= +3* A2)%$-& %3>% %32&
+$55 .*% $.K2=% @*)2 %3>. ;7f *- %32$) .2% $.K2=%>B52 -$.>.A$>5 >==2%= $. #.5$=%2, 2"#$%& >.,
,2B% =2A#)$%$2= H$.K2=%@2.%= @>& .*% >--2A% %32$) 4)$@>)& )2=$,2.A2? 42.=$*. *) 5$-2
$.=#)>.A2J? +$55 B2 >B52 %* )2A2$K2 A*@@#.$A>%$*. *. V^^TC:9
N- =#A3 >,K$A2 $= .*% 4)*K$,2, B& %32 $.%2)@2,$>)&? %32 A)*+,-#.,$./ 45>%-*)@ =3*#5, >445&
>. >44)*4)$>%2.2== %2=% $. 5$.2 +$%3 %32 )#52= $. %32 (*.,#A% *- [#=$.2== T*#)A2B**I
H(M[TJ:`
T2A%$*. ;7 B2-*)2 =2.,$./ *#% -$.>.A$>5 4)*@*%$*.= *- >.& V^^TC87
15>%-*)@= >5=*
3>K2 > ,#%& %* 2.=#)2 %3>% >55 $.-*)@>%$*. 4)2=2.%2, %* )2%>$5 A5$2.%= %>I2. >= > +3*52? $=
n->$)? A52>) >., .*% @$=52>,$./Cn8;
\,,$%$*.>55&? A)*+,-#.,$./ $.%2)@2,$>)$2= @>& B2 )2"#$)2, %* >,32)2 %* )#52= #.,2) %32
1>&@2.% T2)K$A2= ^2/#5>%$*.= 67;6 >., >445& -*) =24>)>%2 >#%3*)$=>%$*. -)*@ %32 _(\C86
15>%-*)@= @>& >5=* B2 =#BE2A% %* )#52= #.,2) %32 ]$_Ni )2/$@2C8F
:W\5=* > )2"#$)2@2.% #.,2) %32 _$.>.A$>5 T2)K$A2= >., ]>)I2%= \A% H_]T\J 6777 $. )25>%$*. %* )2/#5>%2,
>A%$K$%$2=C::
\B*K2? . W8C 1/ ;; =C6C9C:8
\= ,2-$.2, B& %32 _(\ $. %32$) 1*5$A& T%>%2@2.%:9
\B*K2? . W8C 1/ FW =CUC8C:`
_$.>.A$>5 (*.,#A% \#%3*)$%&? H6778JC 38
-
5/21/2018 Equity Crowdfunding Dissertation
17/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;8
21212 O*7+%4 % $.A5#,2 I2& ,2%>$5= *- %32 $==#2)= ,$)2A%*)=? *--$A2)= >., 42)=*.= +3* 3*5,
@*)2 %3>. 67f *- %32 $==#2)= =3>)2= >= +255 >= %32 B#=$.2== 45>.? A>4$%>5 =%)#A%#)2 >., %2)@=
*- %32 =2A#)$%& B2$./ *--2)2,C \5=* )252K>.% $= %32 @>..2) $. +3$A3 %32 $==#2) )2>A32, %32$)
K>5#>%$*. *- %32 A*@4>.&? > )$=I ,$=A5*=#)2 4*)%$*. )25>%$./ %* @$.*)$%& *+.2)=3$4 4*=$%$*.=?
%32 )$=I= >==*A$>%2, +$%3 A*)4*)>%2 >A%$*.=? $.A5#,$./ >,,$%$*.>5 $==#>.A2= *- =3>)2=? > =>52
*- %32 $==#2) *) *- >==2%= *- %32 $==#2)? *) %)>.=>A%$*.= +$%3 )25>%2, 4>)%$2=C
%2= %32 )2"#$)2@2.% -*) ,$=A5*=#)2 *- -$.>.A$>5 =%>%2@2.%= B& $==#2)=
B>=2, *. %32 -*55*+$./ %3)2=3*5,=0 *--2)$./= *- #4 %* *.2 3#.,)2, %3*#=>., ,*55>)= >)2
)2"#$)2, %* =#))2.,2) $%= @*=% )2A2.%5& -$52, $.A*@2 %>R )2%#).= >., -$.>.A$>5 =%>%2@2.%=
A2)%$-$2, B& %32 $==#2)= 4)$.A$4>5 2R2A#%$K2 *--$A2)j *--2)$./= %3>% 2RA22, *.2 3#.,)2,
%3*#=>., ,*55>)= B#% >)2 52== %3>. -$K2 3#.,)2, %3*#=>., ,*55>)=? %32 $==#2) @#=% 4)*K$,2
-$.>.A$>5 =%>%2@2.%= )2K$2+2, B& >. $.,242.,2.% 4#B5$A >AA*#.%>.% >., -*) *--2)$./= %3>%
8U!=%$@>%2, >% *K2) F77 b()*+,=*#)A$./C*)/? H67;UJC &.6+/)86$ 8; K.)+'C b*.5$.2cc
8WN@-C*)/? H67;UJC b+#86) ;86 K+0+/)+: 38-).2==$./ %32 4*+2)r>., @*.2&r*- %32
@>==2=C C-'.
-
5/21/2018 Equity Crowdfunding Dissertation
18/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;9
*. >//)2/>%2 =#)4>== -$K2 3#.,)2, %3*#=>., ,*55>)=? %32 $==#2) @#=% 4)*K$,2 >#,$%2,
-$.>.A$>5 =%>%2@2.%=C
()*+,-#.,$./ $.%2)@2,$>)$2= *) -#.,$./ 4*)%>5=e45>%-*)@= 3>K2 %* 2.=#)2 %3>% 2>A3 $.K2=%*)
)2K$2+= >., >AA24%= %32 )$=I $.K*5K2, $. %32$) $.K2=%@2.% >., >.=+2) "#2=%$*.= %3>% %2=%
%32$) #.,2)=%>.,$./ *- =#A3 )$=I +$%3 $.K2=%@2.%= $. 2>)5&G=%>/2 A*@4>.$2= >., %32 5>AI *-
5$"#$,$%&C N.%2)@2,$>)$2= >5=* 3>K2 %* A*.,#A% B>AI/)*#., A32AI= *. $==#2)= >., 2.=#)2
$.K2=%*)= @>& A>.A25 %32$) A*@@$%@2.% %* $.K2=%C
^2%>$5 A5$2.%= *) $.K2=%*)= >)2 )2=%)$A%2, B& =2, *. %32$)
$.A*@2 *) .2% +*)%3C _*) $.,$K$,#>5= +$%3 >. >..#>5 $.A*@2 *) .2% +*)%3 *- 52== %3>. *.2
3#.,)2, %3*#=>., ,*55>)=? %32& +$55 *.5& B2 >55*+2, %* $.K2=% %32 /)2>%2) *- %+* %3*#=>., *)
Wf *- %32$) >..#>5 $.A*@2 $. > ;6 @*.%3 42)$*,C N.K2=%*)= +$%3 >..#>5 $.A*@2 *) .2% +*)%3
*- @*)2 %3>. *.2 3#.,)2, %3*#=>., ,*55>)= +$55 B2 >55*+2, %* $.K2=% %32 /)2>%2) *- #4 %*
*.2 3#.,)2, %3*#=>., ,*55>)= *) ;7f *- %32$) $.A*@2 $. > ;6 @*.%3 42)$*,C 5=*
.*% B2 >55*+2, %* %)>.=-2) %32$) =2A#)$%$2= -*) *.2 &2>)C8`
21218 3+"$/
N. ]>)A3 *- 67;F? 2"#$%& A)*+,-#.,$./ +>= -*)@>55& $.%)*,#A2, $.%* %32 N%>5$>. _$.>.A$>5
T2)K$A2= \A% H16"))")8 Z+ .C 66; ;8
i2A2@B2) 67;6 Ha>+ 66;e67;6J >., (MVTM[ ^2/#5>%$*. .C ;9W`6 6: Z#.2 67;FC
= %32 -$)=% %$@2 2"#$%& A)*+,-#.,$./ +>= -*)@>55& )2A*/.$=2, >= B2$./ > )2/#5>%2,
$.,#=%)& >.&+32)2 $. %32 +*)5,C 5$>. %3)2=3*5, -*) $==#2)= $= =2% >% !X^ -$K2 @$55$*. $.
>.& ;6 @*.%3 42)$*,C (MVTM[ 3>= .*% =%$4#5>%2, >.& 4)*=42A%#= )2"#$)2@2.%= -*) $==#2)=C
X.$"#2 %* %32 N%>5$>. 52/$=5>%$*. $= %32 )2"#$)2@2.% %3>% =%>)%G#4= B2 m$..*K>%$K2kC %$K2Q? %32 A*@4>.& @#=% B2 $.K*5K2, $. %32 ,2K25*4@2.%? 4)*,#A%$*. *)
=>52 *- $..*K>%$K2 4)*,#A%= *) =2)K$A2= 3>K$./ > 3$/3 %2A3.*5*/$A>5 K>5#2j $% =3*#5, .*% 3>K2
B22. *42)>%$*.>5 -*) @*)2 %3>. U9 @*.%3=j %32 4)$.A$4>5 45>A2 *- B#=$.2== @#=% B2 +$%3$.
N%>5&j %32 %*%>5 K>5#2 *- >..#>5 4)*,#A%$*. -)*@ %32 =2A*., &2>) *- *42)>%$*. @#=% .*%
2RA22, !X^ -$K2 @$55$*.j ,$=%)$B#%$*. *- 4)*-$%= $= 4)*3$B$%2, >= 5*./ >= %32 A*@4>.& $=
A5>==$-$2, >= >. $..*K>%$K2 =%>)%G#4 H-*) > @>R$@#@ 42)$*, *- -*#) &2>)= -)*@ %32 ,>%2 *-
8`T#BE2A% %* A2)%>$. 2RA24%$*.= $.A5#,$./j %)>.=-2) %* %32 $==#2)? >. >AA)2,$%2, $.K2=%*)C
-
5/21/2018 Equity Crowdfunding Dissertation
19/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
;`
$.A*)4*)>%$*.J >., %32 A*@4>.& @>& .*% B2 %32 )2=#5% *- @2)/2)= *) ,2@2)/2)= *- *%32)
A*@4>.$2=C 5=* =>%$=-& *.2 *- %32 -*55*+$./ A)$%2)$> S >% 52>=% ;Wf *- %32
A*=%= *) =>52= @#=% /* %*+>),= )2=2>)A3 >., ,2K25*4@2.% *)? *.2G%3$), *- %32 2@45*&22=
@#=% 3>K2 2$%32) 13i= *) /)>,#>%2, +$%3 4)$*) )2=2>)A3 2R42)$2.A2 *) %+*G%3$),= @#=% B2
/)>,#>%2=? >.,e*) %32 $==#2) @#=% 3*5, 2$%32) *.2 4>%2.% *) @$A)*A3$4 *) .2+
K2/2%>B52e45>.% *) )2/$=%2)2, =*-%+>)2C
!@43>=$= 3>= B22. 45>A2, B& (MVTM[ *. %32 )2"#$)2@2.% %3>% 4*=%G-#.,$./? > =%>)%G#4
@#=% 42)=#>,2 > 4)*-2==$*.>5 $.K2=%*) HB>.I? -$.>.A$>5 $.=%$%#%$*.? K2.%#)2 A>4$%>5 -$)@?
A2)%$-$2, =%>)% #4 $.A#B>%*)J %* =#B=A)$B2 %* >% 52>=% Wf *- %32$) *--2)$./ >A%$./ >= > 52>,
$.K2=%*)C V*%2+*)%3& >)2 %32 5>AI *- 5$@$%= *. 3*+ @#A3 2>A3 $.,$K$,#>5 $.K2=%*) @>& $.K2=%
%3)*#/3 A)*+,-#.,$./ >., (MVTM[k= A5>==$-$A>%$*. *- =@>55 $.K2=%@2.%=97
>= 2R2@4% -)*@
%32 ]$_Ni9;
)2/$@2C
2121: L5.'=%"* O*7'*
4#B5$A A*.=#5%>%$*. $. 67;F *. %32 4)*=42A% *- $.%)*,#A$./ 3>)@*.$=$./
52/$=5>%$*. *. A)*+,-#.,$./ -*) @2@B2) =%>%2=C N. $%= ]>)A3 67;U 4*=%GA*.=#5%>%$*.96
A*@@#.$A>%$*.? %32& 2.#@2)>%2, %32$) 45>. %* %>I2 > +>$%G>.,G=22 >44)*>A3 $. 4>)% B>=2,
*. %32$) -22,B>AI +32)2 E#=% #.,2) 3>5- *- %32 )2=4*.,2.%= B25$2K2, %3>% @$.$@#@
3>)@*.$=>%$*. @2>=#)2= $= >44)*4)$>%2C9F
5=* $.K$%2, )24)2=2.%>%$K2= *- %32 K>)$*#=
=%>I23*5,2)= +$%3$. %32 A)*+,-#.,$./ 2A*G=&=%2@ %* =3>42 52/$=5>%$*. >$@2, >% )2/#5>%$*.
>., 3>)@*.$=>%$*. *- %32 $.,#=%)& >A)*== %32 !XC
N% $= 5$I25& %3>% +2 +$55 =22 3>)@*.$=>%$*. @2>=#)2= B2$./ $@452@2.%2, >A)*== %32 !X $. %32
-#%#)2? 2$%32) >= @$.$@#@ 3>)@*.$=$./ @2>=#)2=? %32 m6`%3
)2/$@2k *) %*%>5 3>)@*.$=>%$*.C
N. >,,$%$*.? %32 ]>)I2%= $. _$.>.A$>5 N.=%)#@2.%= i$)2A%$K29U
>., %32 \5%2).>%$K2 N.K2=%@2.%
_#., ]>.>/2)= i$)2A%$K29W
H\N_]iJ +$55 3>K2 %* B2 A*.=$,2)2, $. )25>%$*. %* >.& .>%$*.>5
975= >., !X^ W777 S !X^ ;7?777 -*) A*@4>.$2= *) 52/>5
2.%$%$2=C9;
677UeF`e!(C96
!#)*42>. (*@@$==$*.? H67;UJC Z. (*@@$==$*.C H67;UJ b+'#8
-
5/21/2018 Equity Crowdfunding Dissertation
20/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
67
52/$=5>%$*. *. A)*+,-#.,$./ +32)2 >. $.K2=%@2.% 4)*4*=$%$*. $.K*5K2=j > A*552A%$K2
$.K2=%@2.% #.,2)%>I$./? +3$A3 )>$=2= A>4$%>5 -)*@ > .#@B2) *- $.K2=%*)=j >., +3$A3 $.K2=%=
$. >AA*),>.A2 +$%3 > ,2-$.2, $.K2=%@2.% 4*5$A& -*) %32 B2.2-$% *- $%= $.K2=%*)=C9:
218 R*"$/,7, '( K%@5$"+'./ K%,='*,%,
\55 %3)22 E#)$=,$A%$*.= A*.=$,2)2, 3>K2 )25>%$K25& 3$/3 $.K2=%@2.% %3)2=3*5,= -*) $==#2)=C \%
!X^ W @$55$*. -*) B*%3 %32 XY >., N%>5& >., XTi ; @$55$*. -*) %32 XT? %3$= $= =$/.$-$A>.%5&
3$/32) %3>. %32 4)2=A)$4%$K2 >@*#.% =2% B& *%32) !#)*42>. .>%$*.= =#A3 >= O2)@>.& >.,
_)>.A2 +3* A>4 %32 5$@$% >% > @2)2 !X^ ; 3#.,)2, %3*#=>.,C98 N% $= =#//2=%2, %3>% %32
3$/32) %3)2=3*5, $= >$@2, >% >%%)>A%$./ 5>)/2) >., 5>%2) =%>/2 =%>)%G#4= >., B#=$.2==2= %* 5$=%
%32$) 4)*E2A%=C
= 32,/2, $%= )2/#5>%*)& )2/$@2 *. %32 B>=$= *- $.K2=%*) 4)*%2A%$*. %3)*#/3
)2=%)$A%$*.= *- %32 A5>== >., %&42 *- 42)=*. +3* @>& )2A2$K2 A*@@#.$A>%$*. 42)%>$.$./ %*
2"#$%& A)*+,-#.,$./C %2/& B25$2= %32 $,2> %3>% +3$52 %32 )2/#5>%$*. *- %32 $.,#=%)& $=
.2A2==>)&? > 5$/3%2)G%*#A3 )2/$@2 $. %2)@= *- )2/#5>%*)& B#),2.= *. 2>)5& =%>/2 B#=$.2==2=
H-*) B*%3 $==#2)= >., $.%2)@2,$>)$2=J +$55 >55*+ )**@ -*) /)*+%3 B2-*)2 @*)2 =%)$./2.% )#52=
>)2 2.-*)A2,C
d*+2K2)? %3$= )2/$@2 ,$=%*)%= %32 $,2> *- A)*+,-#.,$./ %3)*#/3 $%= >)%$-$A$>5 5$@$%>%$*. *.
+3* @>& 4>)%$A$4>%2 $. 2"#$%& A)*+,-#.,$./ >., @>& 2., #4 3#)%$./ %32 *K2)>55 /)*+%3 *-
%32 $.,#=%)& >= %32 4*%2.%$>5 4**5 *- 25$/$B52 4>)%$A$4>.%= @$/3% .*% B2 >B52 %* =#=%>$. %32
$.,#=%)&C ]*)2*K2)? +32)2 *%32) E#)$=,$A%$*.= 3>K2 5*+2) )2/#5>%*)& =%>.,>),= $. %2)@= *-
5$@$%>%$*.= *. $.K2=%*)=? %32 XY @>& +255 -$., %3>% %32$) 3*@2 $.,#=%)& +$55 B2 4)2E#,$A2, B&
%32 )2/#5>%*)& B#),2. B2$./ $@4*=2,C _#)%32)@*)2? %32 _(\ 3>= $. 45>A2 > 4)2G
4)*@*%$*.e=*5$A$%>%$*. B>. *. 42)=*.= +3* ,* .*% "#>5$-& %* 4>)%$A$4>%2 $. 2"#$%&
A)*+,-#.,$./? @2>.$./ %3>% ,"6F+). K2)& =@>55 4#B5$AC N.
9:%2, B& > 5$/3% %*#A3 A*@45$>.A2 )2/$@2 -*) @>.>/2)= +$%3 %*%>5 >==2%= #.,2) !X^
;77 @$55$*.? +3$A3 -*) %32 -*)2=22>B52 -#%#)2? =3*#5, 2.A*@4>== %32 @>E*)$%& *- A)*+,-#.,$./ 4*)%>5= >.,
45>%-*)@=C b\)%$A52 U G (*@@$==$*. i252/>%2, ^2/#5>%$*. H!XJ V* 6F;e67;Fc98
)2 2R2@4%$*.= %* %3*=2 )2/$@2= +32)2 $==#2)= H$. _)>.A2J @>& *--2) #4 %* !X^ W @$55$*. $- %)>,2, *. >
@#5%$5>%2)>5 %)>,2 ->A$5$%& H])A3s= -$.>.A$2)=? H67;UJC DZM&X &Z 2MI4I3XEXI1_4b1M3M_41M2 R3bHQ&2ZI&MIDS 4 &XK1MI41MHI &Z Db4I& _ZCAM3C 1>)$=0 \#%*)$%s ,2= @>)A3s= -$.>.A$2)=?
44C;G 6C
-
5/21/2018 Equity Crowdfunding Dissertation
21/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
6;
%2)@= *- %32 )2"#$)2@2.% -*) $.%2)@2,$>)$2= %* 2.=#)2 %3>% 4)*E2A%= >)2 P->$)? A52>) >., .*%
@$=52>,$./Q? 3>K$./ .* >A%#>5 =A)$4% %* -*55*+ $= @2)2 5$4G=2)K$A2C
N. ->A%? %32 \,K$=*)& (*@@$%%22 *. T@>552) 1#B5$A (*@4>.$2= %3>% +>= 2=%>B5$=32, B& %32
T!(? $. %32$) -$.>5 )24*)%99
? 3$/35$/3%2, %3>% %32 B>. *. /2.2)>5 =*5$A$%>%$*.9`
$@4*=2, B& %32
=2A#)$%$2= >A% H5$-%2, B& %2 *--2)$./=Q )2=#5%2, $. 2RA2==$K2
A*.A2). >B*#% %32 *--2)22 %3>% @>& .2K2) >A%#>55& 4#)A3>=2 =2A#)$%$2=? )>%32) %3>. *.
4)*%2A%$*. *- %32 >A%#>5 $.K2=%*)=CQ`7
D32. "#2)$2, *. %3$=? %32.GT!( (3>$)42)=*. ]>)&
TA3>4$)* )2A*/.$=2, %3>% P%3*=2 +3* K$2+2, B>. >= > =$/.$-$A>.% B#),2. *. A>4$%>5 )>$=$./
>., @>& B2 #..2A2==>)& >= *--2)22= +3* @$/3% B2 5*A>%2, %3)*#/3 /2.2)>5 =*5$A$%>%$*. >.,
+3* @$/3% .*% 4#)A3>=2 %32 =2A#)$%$2= +*#5, .*% B2 3>)@2,CQ`;
D32)2 N%>5$>. )2/#5>%$*. 3>= .* =42A$-$A 4)*K$=$*.= *) @*.2%>)& 5$@$%= %3>% )2=%)$A% %32 %&42
*- $.K2=%*) %3>% @>& 4#)A3>=2 =3>)2= >., =2A#)$%$2= -)*@ $==#2)= *. A)*+,-#.,$./
45>%-*)@=? (MVTM[ 3>= 45>A2, %32 B#),2. *. %32 =%>)%G#4e$==#2) $%=25-? +$%3 %32
)2"#$)2@2.% %3>% Wf *- 2"#$%& >K>$5>B52 @#=% =#B=A)$B2, %* B& > 4)*-2==$*.>5 $.K2=%*)C`6
B52 )2>=*.$./ B23$., %3$= $= %3>% 3>K$./ >% 52>=% *.2 4)*-2==$*.>5 *) $.=%$%#%$*.>5
$.K2=%*) %* 2K>5#>%2 %32 $.K2=%@2.% +$55 4)*%2A% %32 A)*+, -)*@ B2$./ ,2-)>#,2, *)
@$=52,C`F)A3 *) %3>% > 4>%2.% @#=% B2 325,? ->$5$./ +3$A3 >
A2)%>$. .#@B2) *- 42)=*.= +$%3 )252K>.% >A>,2@$A "#>5$-$A>%$*.= =3*#5, B2 2@45*&2,C N% $=
K2.%#)2, %3>% +3$52 %32 $.%2.%$*. B23$., %32=2 %3)22 >,,$%$*.>5 )#52= $= /**,? %32 ;Wf
$.K2=%@2.% $. )2=2>)A3 =22@= 5$I2 %32 2>=$2=% +>& %* A$)A#@K2.% %3$= )2"#$)2@2.% >., +$55
2--2A%$K25& .*% >@*#.% %* @#A3 2K2.%#>55&C 1)*%2A%$*. -*) $.K2=%*)= A*@2= -)*@ +$%3$. %32
99T2A#)$%$2= >., !RA3>./2 (*@@$==$*.? g_$.>5 24*)% M- 552) 1#B5$A (*@4>.$2=
) %* %32 )#52= *. 4)*@*%$*. +$%3$. %32 1TUe;UC`7
\B*K2 . 99C 1/ 89C`;
Z*=243 ]Aa>#/35$.? gd*+ + .C 66;e;6 >., (MVTM[ 2/#5>%$*. .C ;9W`6 H6: Z#.2 67;FJC _*) 2R>@452 G B>.I=? -$.>.A$>5$.=%$%#%$*.= *) =%>)%#4 $.A#B>%*)=C`F
\B*K2 . F`C 1/ ;;9C
-
5/21/2018 Equity Crowdfunding Dissertation
22/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
66
=%>%#2= *) $.=%)#@2.%= *- $.A*)4*)>%$*.? +32)2 $==#2)= @#=% 4)*K$,2 -*) > %>/ >5*./ )$/3% -*)
> 42)$*, *- %3)22 &2>)= %* $.K2=%*)=C
I2= > ,$--2)2.% =%)>%2/& %* %32$) )2/$@2 *. A)*+,-#.,$./C N% >%%2@4%= %* 5$@$%
%32 @>R$@#@ >@*#.% %3>% >. $.,$K$,#>5 @>& $.K2=% +$%3 %3)2=3*5,= K>)&$./ >AA*),$./ %*
$.A*@2 52K25 >., .2% +*)%3C = A3*=2. %* =4)2>, *#% %32 )2/#5>%*)& B#),2.
B2%+22. $==#2)= >., $.%2)@2,$>)$2=j N==#2)= 3>K2 > .#@B2) *- )2"#$)2@2.%= %* >,32)2 %*
=%>)%$./ +$%3 ,$=A5*=#)2 )2"#$)2@2.%= B>=2, *. >@*#.% B2$./ )>$=2,? =3>)2 A>4$%>5 *+.2, B&
K>)$*#= =3>)23*5,2)= >= +255 >= B2$./ =#BE2A% %* > B>AI/)*#., A32AI B& %32 45>%-*)@=C M.2
4*==$B52 3$AA#4 +*#5, B2 %32 )2"#$)2@2.% -*) $.K2=%*)= %3>% %32& >,32)2 %* %32 )2=%)$A%$*.=
$. -*)A2 B>=2, *. $.A*@2 52K25 >.,e*) .2% +*)%3? %32)2 B2$./ .* A2.%)>5$=2, )2/$=%2) *)
A52>)$./ 3*#=2 B#% )>%32) @#5%$452 A)*+,-#.,$./ 45>%-*)@=? $% +*#5, B2 .2>)5& $@4*==$B52
-*) %32=2 45>%-*)@= %* %)>AI >., @*.$%*) 3*+ @#A3 2>A3 $.K2=%*) 3>= A*@@$%%2, $. %32
-$.>.A$>5 &2>)C
X5%$@>%25&? 2>A3 )2/#5>%*) 3>= %32 =>@2 *K2)>)A3$./ *BE2A%$K2 *- 4)*%2A%$*. *- $.K2=%*)= >.,
4)*@*%$*. *- A*@42%$%$*. +$%3$. %32 $.,#=%)& &2% %32& 3>K2 /*.2 >B*#% %* >A3$2K2 $% K$>
,$--2)2.% @2%3*,= $. %2)@= *- +32)2 >., +3*@ %* 45>A2 %32 B#),2. *- 4)*%2A%$*. >.,
4)2K2.%$*.C
81C S%#)2 %+* 4)*E2A%= %3>% +2)2 3*=%2, *. )2+>),
A)*+,-#.,$./ 45>%-*)@= >., )>$=2, .*% *.5& > 5>)/2 >@*#.% *- @*.2&? B#% )2, -5>/= >= +255C
#,#52.% >., >= *- %*,>& %32& B*%3 3>K2
.*% B22. A*.A5#=$K25& -*#., %* B2 >A%#>5 $.=%>.A2= *- -)>#,C = A>=2 =%#,$2= $=
%* 3$/35$/3% %32 4*+2) *- %32 A)*+, $. %2)@= *- %32$) >B$5$%& %* A*.,#A% ,$5$/2.A2? ->A% A32AI?
A*))*B*)>%2 42*452 %* 45>A2= >., /2.2)>55& I224 %32 A*@@#.$%&G>%G5>)/2 =>-2C
-
5/21/2018 Equity Crowdfunding Dissertation
23/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
6F
81C1C )",%
`WD$,25& B25$2K2, %* B2 %32 =2A*., 5>)/2=% )2+>), A)*+,-#.,$./ 45>%-*)@ $. %32 +*)5,C
`:\B*K2 . `UC
`8 Z>@2=^*B$.=*.C H67;UJC H< M " ,.6"/0+ *+"0)* :+=./+ /689:;-.,*i>$5&C`9
N.,$2/*/* *42)>%2= > =%)$A% .*G)2-#., 4*5$A& *. %32$) -52R$B52 -#.,$./ 4)*E2A%=C N.,$2/*/*CA*@? H67;UJC 1+6,'
8; Z'+ N M= >B52 %* @22% +$%3 %32 (!M *- d2>5[2 +3* ,2@*.=%)>%2, %32 4)*,#A% %* %32 E*#).>5$=%CT22 [>#%$=%>? (C H67;UJC XY/0-'.=+( 1*+ !+"0@+ D8C+ /"086.+?/8-
-
5/21/2018 Equity Crowdfunding Dissertation
24/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
6U
81C12 )",% =2, $. a*= \./252=C D$%3 > )25>%$K25& 5*+ -#.,$./ /*>5 *- o6?F8U? %32$)
2.%$A$./ @$R *- 4)$@2 Y*B2 B22- +$%3 >. \@2)$A>. %+$=% "#$AI5& =>+ B>AI2)= 4#=3$./ %32
-#.,$./ %* *K2) o;67?777C d*+2K2) > %2>@ *- ,*A#@2.%>)& -$5@@>I2)= +3* +2)2 4)*,#A$./
> -$5@ *. A)*+,-#.,$./ %**I .*%$A2 *- %32 4)*E2A%? >., #4*. ,2242) $.=42A%$*. -*#., =*@2
/5>)$./ $.A*.=$=%2.A$2=C;7;
%$*. #.A*K2)2, %3>% B>AI2)= +3* 4*=%2, )>K2 )2K$2+= >55 3>, )25>%$K25& .2+
>AA*#.%= >., 3>, B>AI2, ->$52, 4)*E2A%= H%3$= @2>.% %3>% +3$52 %32$) mB>AI2)k =A*)2 +2.% #4?
.* >A%#>5 @*.2& +>= =42.% =$.A2 %32 4)*E2A%= %32& B>AI2, ,$, .*% )2>A3 %32$) /*>5JC
T2A*.,5&? +32. =*@2 #=2)= )>$=2, A*.A2).= K$> %32 A*@@2.%= 4>/2 *. Y$AI=%>)%2)? ]>/.#=
_#. @>,2 .* >%%2@4% %* ,2-2., %32@=25K2=C (*.A2).2, #=2)= =#B=2"#2.%5& %)>+52, %32
+2B -*) 4*=%= >B*#% Y*B2 ^2, >., ,2=4$%2 %32 A5>$@= *- )>K2 )2K$2+=? .*.2 +2)2 %* B2
-*#., >=$,2 -)*@ %3*=2 *. %32 Y$AI=%>)%2) 4>/2 $%=25-C \,,$./ %* %32 =>/>? *.2 B>AI2)
,2,#A2, %3>% %32 .>@2 *- %32 #=2)GA)2>%*) *- %32 Y*B2 ^2, _>A2B**I 4>/2 S a*#$= _)$2., S
$= >. >.>/)>@ -*) N)*. T#5-$,2;76
? A*@@*.5& I.*+. >= -**5k= /*5,C 5 .>$5 $. %32 A*--$.
A>@2 +32. $% +>= A*.-$)@2, %3>% .* )2/$=%2)2, A*@4>.& B& %32 .>@2 *- ]>/.#= _#. N.A
2R$=%2,C
\5%*/2%32)? $% +>= > A*.A2)%2, 2--*)% B& %32 A*@@#.$%$2= B*%3 *. Y$AI=%>)%2) >., ^2,,$%;7F
H> +255GI.*+. >5%)#$=%$A /)*#4 *- $.%2).2% #=2)=J? %3>% =%>AI2, #4 %32 ,>@.$./ 2K$,2.A2
>/>$.=% Y*B2 ^2, >., %* +>). 4*%2.%$>5 B>AI2)= >/>$.=% =#44*)%$./ %32 4)*E2A%C X4 %$55 %+*
3*#)= B2-*)2 %32 A5*=#)2 *- %32 *.5$.2 -#.,$./ 42)$*,? @2@B2)= *- %32=2 A*@@#.$%$2=
@>$.%>$.2, > =#=%>$.2, *.5$.2 4)2=2.A2 A>#%$*.$./ B>AI2)=? >., B#$5,$./ %32 #.A2)%>$.%&C
;77Y$AI=%>)%2)? gYM[! ^!i G ;77f Z\1\V!T! [!!^ _!i YM[! [!!_ Z!^Ylg H67;UJ b*.5$.2cC
;7;Z#5$>..2 124$%*.2? gY*B2 [22- Z2)I& Y$AI=%>)%2) _)>#, V2>)5& TA>@@2, [>AI2)= M#% M- o;67?777g
H3IIE8A2B**ICA*@? ga*#$= _)$2., u _>A2B**Ig H67;UJC b*.5$.2cC
;7F^2,,$%CA*@? ga$I25& ]\ZM^ Y$AI=%>)%2) _^\Xi X.A*K2)2,0 Y*B2 ^2, 0 Y$AI=%>)%2)g H67;FJ b*.5$.2cC
-
5/21/2018 Equity Crowdfunding Dissertation
25/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
6W
D$%3 %3)22 @$.#%2= 52-% *. %32 A5*AI? Y$AI=%>)%2) -$.>55& ,2A$,2, %* 4#552, %32 45#/ *. %32
A>@4>$/. >., 4*%2.%$>55& =>K2, B>AI2)= *K2) *.2 3#.,)2, >., %+2.%& %3*#=>., ,*55>)=C
81C18 9%,,'*, 9%".*+
D2 =22 3*+ %32 A)*+, *42)>%2, $. %32 >B*K2 A>=2= %* %)& >., 4)2K2.% +3>% %32& B25$2K2,
%* B2 -)>#,#52.% >A%$K$%&C \.*%32) 52==*. %3>% +2 A>. ,)>+ $= %3>% %32 5>AI *- )2/#5>%*)&
4)*%2A%$*. +$%3$. A)*+,-#.,$./ @2>.= %3>% 2K2. %3*#/3 @*=% B>AI2)= >)2 $. >A%#>5 ->A% E#=%
4)2G4>&$./ -*) > 4)*,#A%? B2A>#=2 45>%-*)@= =#A3 >= N.,$2/*/* >., Y$AI=%>)%2) 3>K2 =A#54%2,
%32$) %2)@= $. > +>& %3>% 5$@$%= %32$) *+.? >., %32 4)*E2A% A)2>%*)=k 5$>B$5$%& $. %32 2K2.% %3>%
4)*E2A%= >)2 .*% -#5-$552,? %32)2 $= > K*$, +3$A3 3>, %* B2 -$552, B& %32 A)*+,C N. %32 N.,$2/*/*
A>=2? *.2 %3$./ %3>% A*#5, 3>K2 B22. ,*.2 +>= $.=%2>, *- >55*+$./ -#.,= %* B2 =2.% ,$)2A%5&%* %32 4)*E2A% A)2>%*)= >= >., +32. B>AI2)= 452,/2,? %32 -#.,= A*#5, B2 I24% $. 2=A)*+
;7U
#.%$5 %32 4)*E2A% 3>, )#. $%= A*#)=2C A$5$%>%2= %32 A>=2 +32)2 3>5- +>&
%3)*#/3? -)>#,=%2)= A*#5, =$@45& %>I2 +3>%2K2) @*.2& $= >K>$5>B52 >., ,$=>442>)C
N.=%>.A2= *- -)>#, >)2 )>)2? *#% *- %32 *K2) 3#.,)2, %3*#=>., Y$AI=%>)%2) 4)*E2A%=? )24*)%2,
A>=2= *- -)>#, >)2 > .2/5$/$B52 .#@B2);7W
C (*.A2$K>B5& $% $= B2A>#=2 $% $= ,$--$A#5% %* =+$.,52
3#.,)2,= *- 42*452 *. 4#B5$A @2,$#@ *. > /)>., =A>52C ()2,2.%$>5= >., B*.> -$,2= A>. B2
K2)$-$2, +$%3 > "#$AI =2>)A3 *. %32 +2B? >., %32 -)22 -5*+ *- $.-*)@>%$*. -)*@ %32 ,$K2)=2
A)*+, +$55 B#$5, #4 > 4$A%#)2 H)25>%$K25& "#$AI5&J *- *. %32 %)#2 ->A%= *- %32 @>%%2)C
D3>% $= @*)2 A)$%$A>5 $= > 67;F =%#,& *- A)*+,-#.,$./ A*.,#A%2, B& D3>)%*. [#=$.2==
TA3**5C %> =3*+= %3>% -)*@ > =>@452 =$L2 *- .2>)5& W7?777 =#AA2==-#5 A)*+,-#.,$./
4)*E2A%=? 8Wf ,* .*% @22% %32$) %>)/2%2, =3$44$./ 2=%$@>%2C;7:N- %3$= =%>%$=%$A $= 2R%)>4*5>%2,
%* 2"#$%& A)*+,-#.,$./? +2 @$/3% B2 >B52 %* $.-2) %32 -*55*+$./0 %3>% 8Wf *- =%>)% #4= +$55
.*% B2 =#=%>$.>B52 >., +$55 3>K2 %* B2 =3#% ,*+. >., 5$"#$,>%2,? *) 8Wf *- =%>)% #4= +$55 ->$5
%* >A3$2K2 %32 2R$% 4)*@$=2, %* $.K2=%*)=C 1*%2.%$>55&? %32 >.=+2) A*#5, 5$2 =*@2+32)2 $.
B2%+22. %32 %+*C ,= #= %* "#2)& %32 K$>B$5$%& *- A)*+,-#.,$./ =%>)%G#4=j >=
$- $. %32 2R2A#%$*. *- > 4)*,#A%? =%>)%G#4= >)2 >5)2>,& -$.,$./ $% ,$--$A#5% %* @22% > %>)/2%?
;7U(3>)52= a#L>)? g N= ]$==$./ @4>$/.n G
()*+,-#., N.=$,2)g H3689:;-
-
5/21/2018 Equity Crowdfunding Dissertation
26/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
6:
+3>% @*)2 /)*+$./ > B#=$.2== %* B2$./ A>=3G-5*+ 4*=$%$K2 >., )2%#).$./ > @2>.$./-#5
,$K$,2., *) 2R$% %* $.K2=%*)=v
N% $= %32)2-*)2 =#B@$%%2, %3>% )2/#5>%$*.= %* A*@B>% -)>#, >= A)$%$A>5 >= )2/#5>%$*.= +3$A3
3>K2 %32 #5%$@>%2 >$@ *- 5*+2)$./ %32 )$=I *- 5*==2= =%2@@$./ -)*@ B>, @>.>/2@2.%? 4**)
45>..$./ *) 2R2A#%$*. *) >.& *%32) .#@B2) *- #.-*)%#.>%2 =A2.>)$*= %3>% >--5$A% B#=$.2==2=C
.= %3>% %32 $@42)>%$K2 @#=% =3$-% -)*@ )2=%)$A%$./ $.K2=%*)= %* %32 *%32)
4>)%$A$4>.%= $. %32 A)*+,-#.,$./ -)>@2+*)IC D2 2R45*)2 %32=2 $==#2= -#)%32) $. %32 .2R%
A3>4%2)C
:1C W5++7*@ +;% ).'A4 7*+' ).'A4(5*47*@\% %32 2., *- (3>4%2) 6? +2 >.>5&=2, %32 K>)$*#= )2/#5>%*)& )2/$@2=j +$%3$. %32 _(\=
/*K2).$./ @2%3*,*5*/& $= %3>% %32 %>)/2% /)*#4 *- 2"#$%& A)*+,-#.,$./ =3*#5, B2
$.,$K$,#>5= +$%3 2R42)$2.A2 $. $.K2=%$./ *) +3* >)2 >B52 %* >--*), >.& 5*==2= %3>% @>& )2=#5%C
)2 .*% >= A*@@2)A$>55&
=*43$=%$A>%2, 3*+2K2) ,*2= .*% >5$/. +$%3 %32 A*.A24% *- A)*+,-#.,$./ $%=25-C
_)*@ 4>)% F? +2 -$., %3>% %32 A)*+, 45>&= >. >A%$K2 )*52 +$%3$. %32 A)*+,-#.,$./ 4>)>,$/@?.*% *.5& ,* %32& 4)*K$,2 %32 -#.,= %* )2>5$=2 4)*E2A%=? %32& >5=* K>5$,>%2 A*.A24%= >., $,2>=
>., @*)2 $@4*)%>.%5&? 4*5$A2 %32 #.+$25,& A)*+,-#.,$./ $.,#=%)&C
$@2, >% K>5$,>%$./ %32 A*.A24% *- 3*+ )2=%)$A%$./ >AA2== %*
%32 A)*+, +$55 >A%#>55& 3#)% %32 2"#$%& A)*+,-#.,$./ $.,#=%)& $. %32 XY? +2 =%>)% B&
$,2.%$-&$./ %32 K>)$*#= =%>I23*5,2)= >., %32)2>-%2) @>I2 %32 A>=2 -*) >. $.A5#=$K2
4>)%$A$4>%*)& =%)>%2/& A2.%2)2, >)*#., %32 $,2> *- %32 +$=,*@ *- %32 A)*+,C
N. %32 4>=%? )2/#5>%$*.= >., 5>+= +2)2 =%)$A%5& @>,2 $. %*4G,*+. =&=%2@0 -$)=% > D3$%2 1>42)?
%32. ,2B>%2, B& > =42A$>5 A*@@$%%22? > B$55 4)*4*=2, $. 1>)5$>@2.%? B>AIGB2.A32)= +3$442,
$.%* 5$.2 >., -$.>55& 4>==2, B& %32 (*@@*.=? %32 a*),= >., %32. *--2)2, %* %32 =$%%$./
@*.>)A3 -*) ^*&>5 \==2.%C
& +2 3>K2 4#B5$A A*.=#5%>%$*.= >., -22,B>AI @2A3>.$=@= +32)2 %32 *4$.$*.= *- >55
=%>I23*5,2)= >)2 %>I2. $.%* >AA*#.% S %3$= $= %32 ,8:+6< 78=+6
-
5/21/2018 Equity Crowdfunding Dissertation
27/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
68
*)/>.$=>%$*.;78
? %3$= $= $.A)2>=$./5& B2A*@$./ %32 @*,25 %3>% *)/>.$=>%$*.= 3>K2 %* >,*4% $.
%3$= A*..2A%2, +2B >., =*A$>5 +*)5, %3>% +2 5$K2 $. %*,>&C T* ->) +2 3>K2 2R45*)2, %32 $,2>
*- > ]Td =%)>%2/& >., -*#., %3>% ,#2 %* %32 .>%#)2 *- 2"#$%$2= >., =3>)2= %32)2 3>= %* B2
=#--$A$2.% =A)#%$.& $. 45>A2 B& > /*K2).@2.% )2/#5>%*)C
)%$A$4>.%= $. A)*+,-#.,$./ >)2 %32 -$.>.A$>5 >#%3*)$%&? %32 /*K2).@2.%?
A)*+,-#.,$./ 45>%-*)@? B#=$.2==H$==#2)J >., %32 $.K2=%*)C B52 B25*+ ,2@*.=%)>%2=
+3>% 2>A3 4>)%$A$4>.%k= *BE2A%$K2 $= $. )25>%$*. %* *.2 >.*%32)C
-'[%.*0%*+ K%@5$"+'.
1)*@*%2
2.%)24)2.2#)=3$4
T%$@#5>%2
2A*.*@& >.,
/)*+%3
1)*%2A%$*. *- $.K2=%*)= >/>$.=% -)>#, >., @$=52>,$./
4)*@*%$*.;79
1)*@*%$./ 2--2A%$K2 A*@42%$%$*. $. %32 $.%2)2=% *-
A*.=#@2)=;7`
\==$@$5>%$*. *- A)*+,-#.,$./ 4*5$A$2= #.,2) 2R$=%$./
-$.>.A$>5 )2/#5>%$*.=
).'A4(5*47*@ =$"+('.0 V5,7*%,,
!=%>B5$=3 2"#$%& A)*+,-#.,$./ >=
K$>B52 =*#)A2 *- A>4$%>5
-*)@>%$*.C
]>$.%>$. =>-2%& *- $.K2=%*)= >.,
$.%2/)$%& *- $.,#=%)&C
\5%2).>%$K2 @2%3*, *-
A>4$%>5 -*)@>%$*.
h>5$,>%$*. *- $,2> *)
B#=$.2== B& %>)/2%
,2@*/)>43$A 4)$*) %*
2R2A#%$*.
3*[%,+'.
_$.>.A$>5 N.A2.%$K2=
T#44*)% 2.%)24)2.2#)=3$4;;7
_$/#)2 ;C7
;78_*) > ,2%>$52, ,$=A#==$*. *. ]Td =%)>%2/$2= G D>L? ZC >., D2$=2)? 1C H67;6JC N.%2).2% /*K2).>.A20 I23*5,2) *)/>.$L>%$*.=COT 8< 1+0+/8,,T h !.7* 1+/*T AT? ;7? 4CFF;C;79
_$.>.A$>5 (*.,#A% \#%3*)$%&? H67;UJC 1*+ 2345' 6+7-0")86$ "##68"/* )8 /689:;-
-
5/21/2018 Equity Crowdfunding Dissertation
28/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
69
B52 A52>)5& $55#=%)>%2= %32 A)*+,-#.,$./ 4>)>,$/@C O*K2).@2.% 3>= .* )2>5
$.K*5K2@2.% $. %32 $.,#=%)& B#% =%>.,= %* />$. -)*@ $%= /)*+%3C %*) $= %>=I2, +$%3
2.=#)$./ %3>% >44)*4)$>%2 4)*%2A%$*. $= A*.-2))2, *. $.K2=%*)= +3* >)2 )$/3% B25*+?
4)*44$./ #4 %32 45>%-*)@= >., B#=$.2==2=C N% $= A52>) %3>% %32 2.%$)2 A)*+,-#.,$./ $.,#=%)&
)2=%= #4*. %32 4>)%$A$4>%$*. *- $.K2=%*)=? B#% $- )2/#5>%*)= >)2 >,>@>.% %3>% *.5& > A2)%>$.
/)*#4 =3*#5, B2 >55*+2, %* 4>)%$A$4>%2? %32. $% +$55 .*% *.5& =%&@$2 /)*+%3? B#% >5=*
-#.,>@2.%>55& ,$=%*)% %32 4)2@$=2 *- A)*+,-#.,$./C
:1C1C D7,4'0 '( ).'A4,
= A)&=%>55$=2, B& T#)*+2$AI$ $. 3$= B**I *- %32
=>@2 .>@2
;;;
C d2 A$%2= > .#@B2) *- 2R>@452= *- 3*+ > A)*+, *- $.-*)@2, $.,$K$,#>5= %3>%=>%$=-& > A2)%>$. =2% *- A)$%2)$> +$55 >5+>&= A*@2 #4 +$%3 > B2%%2) *K2)>55 >.=+2) *) ,2A$=$*.
%3>. >.& 2R42)% *) 2K2. @2)25& %32 =@>)%2=% @2@B2) *- %3>% /)*#4C \@*./ %32 2R>@452= $=
%32 (3>552./2) =3#%%52 ,$=>=%2)C ^25&$./ *. ,>%> >.>5&=2, B& ]>5*.2&;;6
$% =3*+= %3>% +$%3$.
@$.#%2= *- %32 ,$=>=%2) B2$./ B)*>,A>=% 5$K2 *. %252K$=$*.? $.K2=%*)= *. %32 =%*AI @>)I2% 3>,
@>,2 $% A52>) +3* %32& B25$2K2, %* B2 )2=4*.=$B52 -*) %32 >AA$,2.%? A*))2A%5& $,2.%$-&$./
]*)%*. B52 -*) > 4**)5& B#$5% MG)$./ =2>5C;;F
_)*@ %3$= 32 @>I2= %32 A>=2 %3>% A)*+,= >., /)*#4= 3>K2 %32 >B$5$%& %* B2 +$=2) %3>. .*%
*.5& %32$) =@>)%2=% @2@B2) B#% *. %32 +3*52? >A% $. >. $.A)2,$B5& $.%255$/2.% @>..2) =* 5*./
>= %3)22 A*.,$%$*.= *- $.,242.,2.A2? ,$K2)=$%& >., ,2A2.%)>5$=>%$*. >)2 =>%$=-$2,C
N.,242.,2.A2 >., ,$K2)=$%& >)2 .2A2==>)& %* %3$= %32*)& *- > +$=2 A)*+, B2A>#=2 %32$) K$2+=
*) *4$.$*.= >)2 .*% $.-5#2.A2, B& *%32) @2@B2)= +$%3$. %32 /)*#4j @2@B2)= @#=% B2 @>,2
#4 *- $.,$K$,#>5= +3* 3>$5 -)*@ > K>)$2%& *- B>AI/)*#.,= %3>% 2>A3 52., > ,$--2)2.%
$.%2)4)2%>%$*. *- $.-*)@>%$*. >K>$5>B52 >., >K*$, %32 42)$5= *- m/)*#4%3$.Ik;;U+3$A3 *AA#)=
+32. ,2A$=$*. @>I2)= >)2 %** >5$I2 B*%3 $. %2)@= *- +*)5,K$2+ >., 2R42)$2.A2C
d*@*/2.2*#= /)*#4= B2A*@2 A*32=$K2 @*)2 2>=$5& %3>. ,$K2)=2 /)*#4=? >., =#--2) -)*@ >
,2%2)$*)>%$*. $. @2.%>5 2--$A$2.A&? )2>5$%& %2=%$./ >., @*)>5 E#,/@2.%C ;;W
@2= T#)*+$2AI$? 1*+ Q.':8, H; 3689:'H;=% 2,.? a$%%52? [)*+. 677UJC
;;6]$A3>25 ]>5*.2& >., Z ]#532)$.? gA%$*. =30 N.-*)@>%$*. i$=A5*=#)2
N. \. !--$A$2.% ]>)I2%g b;``9c \K>$5>B52 >% TT^V ;U;`8;C;;F
\ )2=#5% %3>% %**I > 1)2=$,2.%$>5 A*@@$%%22 *K2) =$R @*.%3= %* A*@2 %* %32 =>@2 A*.A5#=$*.C;;U\ %2)@ A*$.2, B& l>52 4=&A3*5*/$=% N)K$./ Z>.$=C N)K$./ a Z>.$=? gO)*#4%3$.Ig H;`8;J WC
;;WNB$,C 1=&A3*5*/& %*,>&C
-
5/21/2018 Equity Crowdfunding Dissertation
29/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
6`
/)*#4=? =3>)2 >. $55#=$*. *- $.K#5.2)>B$5$%&? > +$55$./.2== %* )>%$*.>5$L2 >+>& 4*==$B52
A*#.%2)>)/#@2.%= %* %32 /)*#4k= 4*=$%$*.? >., > A*.K$A%$*. %3>% ,$==2.% $= .*% #=2-#5C;;:
i2A2.%)>5$=>%$*. $= =$@45& +3>% $% @2>.=? > ,$=%)$B#%2, /)*#4 %3>% 3>= .* =42A$-$A
,2@*/)>43$A *) /2*/)>43$A 3*@*/2.2$%&j +3$A3 >55*+= -*) +3>% %32 2A*.*@$=% _)$2,)$A3
d>&2I ,2=A)$B2, >= %>A$% I.*+52,/2 %* B2 ,2@*.=%)>%2, B& %32 A)*+,C A$% I.*+52,/2 $=
I.*+52,/2 %3>% A>.k% B2 2>=$5& =#@@>)$L2, *) A*.K2&2, %* *%32)=? B2A>#=2 $% $= =42A$-$A %* >
4>)%$A#5>) 45>A2 *) E*B *) 2R42)$2.A2C;;8
a$.I2, %* %32 $,2> *- ,2A2.%)>5$=>%$*. $= %3>% *-
>//)2/>%$*.? %3>% %32)2 @#=% B2 =*@2 @2>.= *- A2.%)>5$=$./ %32 A*55>%$./ %32 ,2A$=$*. *- %32
,2A2.%)>5$=2, /)*#4C
:1C12 G"4*%,, '( ).'A4,CCH
A*@4>.& *- %32 ;877= $= %32 %2R%B**I 2R>@452 *- > B#BB52 ,)$K2. B& $.K2=%*)
2R#B2)>.A2 >., /)22,C N% +>= >5=* > A*@452R 2K2.%? %32 4)*,#A% *- $.%2)=2A%$./ -$.>.A$>5?
52/>5? 4*5$%$A>5? >., A#5%#)>5 ->A%*)=C;;`
= %32 32$/3% *- %32 [)$%$=3 2@4$)2? /)2>% K*&>/2= +2)2 @>,2 %* %32 _>) !>=% %* B)$./
B>AI K>5#>B52 /**,= B#% %32=2 +2)2 ,>./2)*#= >., )$=I& %)$4= >., $% +>= A*@@*. >% %32
%$@2 -*) =3$4 *+.2)= %* =22I $.K2=%*)= %* 4#% #4 -#.,= -*) 2>A3 K*&>/2 +$%3 > A#% *- %32
4)*-$%= +32. %32 =3$4 )2%#).2,C N.K2=%*)= *-%2. =4)2>, %32$) B2%= *#% >., ,$K2)=$-$2, %32$)
3*5,$./= $. =2K2)>5 A*.A#))2.% K*&>/2=C;67
=% N.,$> (*@4>.& >., %32$) =3>)2 =%)#A%#)2 ,$=)#4%2, %3>% $.,#=%)& >., 4>$, *#% >
,$K$,2., *. "00 K*&>/2= %3>% %32 A*@4>.& #.,2)%**I S > /)*#., B)2>I$./ .2+ +>& *-
$.K2=%$./C T42A#5>%*)= >., =3&=%2)= =%>)%2, ,2K$=$./ >55 @>..2) *- $.K2=%@2.%=;6;
>., %32
B)$2- 42)$*, *- 4)*=42)$%& =**. 2.,2,C
;;:\B*K2? . ;;;C
;;8\B*K2 . ;;;C
;;9 (3>)52= ]>AI>&? XY)6"86:.
-
5/21/2018 Equity Crowdfunding Dissertation
30/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
F7
T$) N=>>A V2+%*.? +3* A*$.2, %32 43)>=2 mD3>% /*2= #4? @#=% A*@2 ,*+.k >5=* -255 K$A%$@ %*
%32 3&42 *- %32 T*#%3 T2> B#BB52? 3$= ,+" /-0#"j nN A>. A>5A#5>%2 %32 @*%$*.= *- %32
32>K2.5& B*,$2=? B#% .*% %32 @>,.2== *- 42*452Cn;66
_*) > @*)2 )2A2.% 2R>@452 *- %3$= @>,.2==? +2 .22, *.5& 5**I B>AI %* 6779 >., %32 B#BB52
A)2>%2, B& %32 =2A#)$%$=>%$*. >., )24>AI>/$./ *- %*R$A >==2%= -*) =>52 *) +3>% +>= @*)2
4*4#5>)5& I.*+. >= %32 m=#BG4)$@2k @*)%/>/2 A)$=$=C;6F
D>))2. [#--2% $= +$,25& )2/>),2, >=
%32 =@>)%2=% $.K2=%*) >5$K2? B#% 2K2. 32 %*5, %32 (*@@$==$*. %3>% PK2)&? K2)& -2+ 42*452
A*#5, >44)2A$>%2 %32 B#BB52?Q +3$A3 32 A>552, > P@>== ,25#=$*.Q =3>)2, B& PF77 @$55$*.
\@2)$A>.=CQ;6U
N% +>= > =*B2)$./ 42)$*, -*) 2K2)&*.2 >., %*,>&? @*)2 %3>. -$K2 &2>)= >-%2) %32 A)>=3? %32
2A*.*@& 3>= &2% %* )2A*K2)C .,>B52 +3& )2/#5>%*)= ,* .*%
.2A2==>)$5& =3>)2 %32 2R#B2)>.A2 *- 2.%)24)2.2#)= >., $.K2=%*)=C
()*+,= >)2 =#=A24%$B52 %* m/)*#4%3$.Ik %* %32 m32), @2.%>5$%&k? %* $.-*)@>%$*. A>=A>,2= >.,
%* @>== ,25#=$*.= *- $.=%>.% +2>5%3 >., )$A32=C N% $= >. #.-*)%#.>%2 >--5$A%$*. *- %32 3#@>.
A*.,$%$*. %3>% ,)$K2= =#A3 $))>%$*.>5 B23>K$*#)C
N% $= %3#= $)*.$A %3>% )$=2 *- A)*+,-#.,$./ +>= ,#2 %* %32 A)$=$= *- 6779? $%= A)$%$A>5 ,$--2)2.A2
B2$./ %32 25$@$.>%$*. *- %32 @$,,52@>.C V* 5*./2) ,*2= >. $.,$K$,#>5 .22, %* /* %* > B>.I
%* %>I2 *#% > 5*>. %* -$.>.A2 %32$) 3*#=2? %32& A>. 3*=% > 4)*E2A% *. > )2>5 2=%>%2
A)*+,-#.,$./ +2B=$%2? 161 52.,$./ +2B=$%2 >., %32 A)*+, +$55 ,2A$,2 $- %32& +>.% %* =3>)2
$. %32 4)*42)%&? *) $- %32& >)2 +$55$./ %* 52., 3$@ *) 32) %32 @*.2&C
d*+2K2) %32 A)*+, B2$./ 2./>/2, $= =2K2)25& >--2A%2, B& %32 5$@$%>%$*.= $@4*=2, B& %32
_(\ *. $.K2=%*)=C .& B>)= @2>. %3>% > +$,2 =+>%32 *- %32 4*%2.%$>5 )2%>$5 A5$2.%= +$55
.*% *.5& .*% B2 >B52 %* 4>)%$A$4>%2 $. A)*+,-#.,$./? B#% +$55 >5=* 5*=2 %32 *44*)%#.$%& %*
52., %32$) ,$K2)=$%& %* %32 @$RC
;66(3)$=%*432) 22,C H;```JC @.g, T*#%3 T2>C !"6="6: ,"7"J..A$>5 ()$=$= N."#$)& (*@@$==$*.? g_NV\a ^!1M^< M_
-
5/21/2018 Equity Crowdfunding Dissertation
31/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
F;
N1C Z7*"$ !;'5@;+,
K$)%#>5 )2>5$%& 3>),+>)2 @>.#->A%#)2) %3>% +>= A)*+,-#.,2, *. Y$AI=%>)%2)
>., 4#)A3>=2, B& _>A2B**I -*) > )24*)%2, XTo6 B$55$*.C N% @>)I= %32 -$)=% @>E*) A*@@2)A$>5
,2>5 -*) >.& A)*+,-#.,2, A*@4>.& >., 3>= #.,2)=%>.,>B5& @>,2 $.K2=%*)= 2RA$%2,C
N. > _*)B2= >)%$A52 ,$=A#==$./ %32 =>52? (!M *- T22,)= Z2-- a&.. =>$, %3>%? PD2 2=%$@>%2 %3>% $-
&*#k, 4#% oF77 $.%* MA#5#= %3)*#/3 2"#$%& A)*+,-#.,$./? &*# A*#5, 3>K2 @>,2 > )2%#). *-
o67?777CQ;6W
)2 %+* +>&= %* 5**I >% %3$=? %32 -$)=% $= %3>% %32 $.,#=%)& $= -52R$./ $%= @#=A52 >.,
=3*+$./ %3>% 2"#$%& A)*+,-#.,$./ $= B*%3 K$>B52 >., @*)2 $@4*)%>.%5&? 4)*-$%>B52C % A*.=$,2)$./ %3>% ,>%> -)*@ T22,)=;6:
=3*+= %32 >K2)>/2 $.K2=%@2.% $= p87W *)
)*#/35& XTo;677? %32 )2%#). >. >K2)>/2 $.K2=%*) +*#5, 3>K2 )2A2$K2, +*#5, B2 #4+>),= *-
XTo89?777C %$*.>5 $.K2=%*)
5#=%$./ -*) @*)2 >., +2 @>& +255 B2/$. %* =22 %32 /)22, A>4$%>5 I$AI $.C
% =>$,? %32 _(\ =3*#5, .*% )2=%)$A% %32 4>)%$A$4>%$*. *- $.K2=%*)= +$%3$. %32 A)*+,-#.,$./
=4>A2C %$*.>52 B23$., A>44$./ %32 5$@$% *- 5*+2) $.A*@2 )2%>$5 A5$2.%= $= B>=2, *. %32
@$=%>I2. >==#@4%$*. %3>% %32& >)2 .*% >= =*43$=%$A>%2, >= 3$/32) .2% +*)%3 $.,$K$,#>5=?
3*+2K2)? %$@2 >., >/>$. +2 3>K2 =22. 3*+ 3$/32) .2% +*)%3 $.,$K$,#>5= 3>K2 B22. 4)*K2.
%* B2 /#55$B52 >., $))>%$*.>5 $. %32$) $.K2=%@2.% 3>B$%=C X.$%2, T%>%2= KC [2).>), aC ]>,*--;68
$= >. 2R>@452 *- 3*+ $.,$K$,#>5= >., 2.%$%$2= +3* >)2 A*.=$,2)2, =*43$=%$A>%2, >.,
4)*-2==$*.>5 $.K2=%*)= +2)2 ,#42, $.%* 4>)%$A$4>%$./ $. > 1*.L$ =A32@2 %3>% 2K2.%#>55&
$@45*,2,? A*=%$./ %32@ >. 2=%$@>%2, XTo67 B$55$*.C )2 $..#@2)>B52 2R>@452= *- %32
$))>%$*.>5$%& *- $.K2=%*)= *- >55 =%)$42= >., $% +*#5, B2 > =3>@2 $- %32 A)$%$A>5 $./)2,$2.% %*
4>)%$A$4>%*)& A)*+,-#.,$./ S %32 ,$K2)=$%& *- 4>)%$A$4>.%= S $= 5*=% %3)*#/3 %3$= >)%$-$A$>5
5$@$%>%$*. B>=2, *. > -#.,>@2.%>55& -5>+2, >==#@4%$*. %3>% 2"#>%2, .2% +*)%3 %*
$.%2552A%#>5 4)*+2==C
[& )2=%)$A%$./ %32 4*%2.%$>5 4**5 *- $.K2=%*)= %* 42)=*.= *- > 5>)/25& =$@$5>) B>AI/)*#.,
HB>=2, *. B>.I B>5>.A2=J %32 -$)=% 5*== A*@2= -)*@ ,$K2)=$%& +$%3$. %32 A*.%2R% *- %32
;6WZ2-- a&.. H(!M T22,)=CA*@J $. i>K$, 1)*==2)? H67;UJC i*2= _>A2B**Ig= i2>5 _*) MA#5#= T4255 )%2)v b*.5$.2c _*)B2=C;6:T22,)= [5*/? gT%>%= [23$., M#) _$)=% ;9 ]*.%3=g H67;UJ b*.5$.2cC
;687` ()C 6;F Hi(J
-
5/21/2018 Equity Crowdfunding Dissertation
32/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
F6
+$=,*@ *- A)*+,=? $- %3$= >==#@4%$*. %3>% A)*+,= A>. B2 +$=2) %3>. 2R42)%= $= %)#2? %32. %32
)2@*K>5 *- %3$= >=42A% +$55 3>)@ %32 ,25$A>%2 2A*G=&=%2@C _#)%32) %* %3>%? B& 25$@$.>%$./ %32
4*==$B$5$%& *- 2K2. 4)*@*%$./ %32 $==#2 %* %32=2 .*.G=*43$=%$A>%2, $.K2=%*)=? $==#2)= +3*
@>& .22, A)#A$>5 -22,B>AI *. %32 +*)I>B$5$%& *- %32$) $,2> -)*@ %32 +$,2) 4#B5$A +$55 B2
#.>B52 %* K>5$,>%2 A52>)5& %32 ,2@>., -*) %32$) 4)*,#A%C (*.=2"#2.%5& ,24)$K$./ =%>)%G#4= *-
%32 >B$5$%& %* B#$5, >., )2A)#$% $.K2=%*)GA*.=#@2)= +3* 3>K2 >55 >5*./ B22. %32 %>)/2%
>#,$2.A2 *- %32 B#=$.2==C
N- %32 *BE2A%$K2 +>= %* 4)2K2.% 5*+2) .2% +*)%3 $.,$K$,#>5= -)*@ %>I$./ />@B52= $. 3$/3 )$=I
A*@4>.$2=? %32. $% =%>.,= %* )2>=*. %3>% >A%#>5 />@B5$./ $%=25- $= 3>), %* ,2-2., >= 52== )$=I&
%3>. 2"#$%& A)*+,-#.,$./C;69
N. %2)@= *- %32 )$=I *- -)>#,? +2 3>K2 =22. %32 2R>@452 *- %32 A)*+,k= )2>A%$*. %* %32 O*[2
>., Y*B2 [22- E2)I& A>@4>$/.=C N% $= 2K$,2.% %3>% %32& >)2 A>4>B52 *- 4)*%2A%$./ %32@=25K2=
-)*@ @>E*) $.=%>.A2= *- ,2A24%$*.C D3>% $% @$/3% .*% B2 =* /)2>% >% $= 4)*%2A%$./ $%=25- -)*@
2RA2==$K2 *) $))>%$*.>5 2R#B2)>.A2 %*+>),= $.K2=%@2.%=C
N. Q.':8, 8; )*+ 3689:'? T#)*+2$AI$ ,2=A)$B2= %32 45>.I )*>, A)>L2 *- %32 ;967=? +32)2
45>.I= +2)2 5>$, >A)*== %32 A*#.%)& %* >$, $. %32 =422,$2) @*K2@2.% *- A>))$>/2=CX.-*)%#.>%25&? >-%2) @#A3 ->.->)2 >., $.K2=%@2.%? %32 2=%$@>%2, 5$-2A&A52 *- 2$/3% &2>)=
%#).2, *#% %* B2 *.5& -*#) >., @>.& 42*452 5*=% %32$) @*.2&C D3$52 #.-*)%#.>%2? %3$= +>=
A*@452%25& $. 5$.2 +$%3 %32 )$=I >==*A$>%2, +$%3 >.& K2.%#)2C d>, %32 45>.I )*>,= B22.
=#AA2==-#5? %32& +*#5, 3>K2 )2>42, > 3>.,=*@2 4)*-$%C
N12 R$+%.*"+7[% K%@5$"+'./ K%@70%
\.& =#B=%>.%$K2 A)$%$A$=@ *- %32 4*5$A& ,2A$=$*.= @>,2 B& %32 _(\ +$%3 )2/>), %* %32$)
4*=$%$*. *. 2"#$%& A)*+,-#.,$./ +*#5, B2 ,$--$A#5% %* =#B=%>.%$>%2 >= %32 $.I *. %32
,*A#@2.% 3>= B>)25& ,)$2,C M--2)$./ >. >5%2).>%$K2 =%)>%2/& @>& +255 B2 *K2) >@B$%$*#= B#%
%3>% =>$,? %* @2)25& >AA24% %32 +>$% >., =22 >44)*>A3 B2$./ 2=4*#=2, $= $.K$%$./ ->$5#)2 >.,
> ,$==2)K$A2 %* >55 4>)%$A$4>.%= >., =%>I23*5,2)= +$%3$. %32 $.,#=%)&C
;69N. %32 -22,B>AI *. %32 (*.=#5%>%$*. 1>42)? *.2 )2=4*.,2.% >=I2, %32 =>@2 "#2=%$*. *- %32 _(\ %* +3$A3
%32& )245$2, %3>% )2/#5>%$*.= *. />@B5$./ +2)2 .*% +$%3$. %32$) >@B$% >., %32)2-*)2 +2)2 #.>B52 %* A*@@2.%C
-
5/21/2018 Equity Crowdfunding Dissertation
33/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
FF
_)*@ %32 ,$=A#==$*. >B*K2? +2 -$., %3>% *.5& *.2 *#% *- >55 4>)%$A$4>.%= +$%3$. %32
A)*+,-#.,$./ @$R +$55 B2 /#>)>.%22, > B2.2-$%C N.K2=%*)= =3*#5,2) %32 B#),2. *- %*%>5
A>4$%>5 5*== +$%3 .* )2A*#)=2 *) )2=%$%#%$*. =>K2 >., 2RA24% $. %32 A>=2 *- *#%)$/3% -)>#,? %3$=
$= *- A*#)=2 *--=2% B& %32 4*%2.%$>5 #4=$,2 *- $.K2=%$./ $. > =#AA2==-#5 B#=$.2==C [#=$.2==2=? $%
A*#5, B2 >)/#2,? +$55 ,2)$K2 %32 @*=% B2.2-$% =$.A2 %32& *B%>$. >. $.K2=%@2.% -*) > A3>.A2
%* B#$5, %32$) ,)2>@? B#% B2$./ -#.,2, $= .*% > /$K2. >., $. %3>% =2.=2 %32& >)2 .*%
/#>)>.%22, %* B2.2-$% -)*@ 4>)%$A$4>%$*. $. 2"#$%& A)*+,-#.,$./C
15>%-*)@= 3*+2K2)? +$55 %>I2 %32$) -22 -)*@ =#AA2==-#5 4)*E2A%= H>., $. %32 A>=2 *- T22,)=?
-)*@ >.& 4)*-$%= ,2)$K2, -)*@ $.K2=%@2.%= +3$A3 %32& @>.>/2 >= .*@$.22J >., $. )2%#).?
%32& 4)*K$,2 > @>)I2%45>A2 *. +3$A3 $.K2=%*)= >., 2.%)24)2.2#)= A>. -$., *.2 >.*%32)C
.>5*/*#= %* %3>% *- > 5>.,5*), +3* *+.= 4)$@2 ,$/$%>5 )2>5 2=%>%2? %32 4)$A2
$= > 42)A2.%>/2 *- %32 m4)*-$%k >., %32& 4)>A%$A>55& >==#@2 L2)* )$=IC N% $= )2A*@@2.,2, %3>%
45>%-*)@= B2 4>==2, %32 B#5I *- %32 )2/#5>%*)& B#),2. *- >==2==$./ %32 =#$%>B$5$%& *-
B#=$.2==2= 5$=%$./ %32$) 4)*E2A%= >., .*% @2)25& 4>&$./ >%%2.%$*. %* 252@2.%= %3>% 4)2K2.%
-)>#,? B#% %32 *K2)>55 K$>B$5$%& *- %32 B#=$.2==;6`
%* +3$A3 $.K2=%*)= @>& =#B=A)$B2C
)/#@2.% >/>$.=% $.A)2>=2, )2/#5>%*)& 4)2==#)2 *. 45>%-*)@= $= %+*G-*5,C % $% +$55 2>). %32 $)2 *- 4#)$=%= +3* B25$2K2 %3>% A)*+,-#.,$./ =3*#5, B2 2.%$)25&
,2@*A)>%$A >., %3>% >.& 4)*E2A% =3*#5, B2 >==2==2, *. $%= @2)$%= .*% B& >. $.%2)@2,$>)& B#%
B& %32 A)*+, +3* +$55 %32. ,2A$,2 +32%32) *) .*% %* -#., $%C )/#@2.% %3>% +$55
B2 >,K>.A2, $= %3>% $% +*#5, )>$=2 %32 B>) %* 2.%)& >., ,$=$.A2.%$K$=2 .2+ 45>%-*)@= -)*@
=%>)%$./ #4 >= +255 >= 45>A$./ > 3#/2 B#),2. *. 2R$=%$./ 45>%-*)@=C
% >= $% A#))2.%5& =%>.,=? > 5>)/2 =2/@2.% *- %32 A)*+,
+$55 B2 B>))2, -)*@ 4>)%$A$4>%$./ $. 2"#$%& A)*+,-#.,$./? B& )252>=$./ %32 )2/#5>%*)&
)2=%)$A%$*.= *. %32 A)*+, >., )245>A$./ $% +$%3 > %$/3%2) =A)22. *. B#=$.2==2= %3>% 5$=%? $% +$55
>A%#>55& A*.-*)@ %* %32 $,2>5 *- ,2@*A)>%$A$=$./ A>4$%>5 >= @*)2 42*452 >)2 >B52 %*
4>)%$A$4>%2 >., *K2) %$@2? %32 "#>5$%& >., "#>.%$%& *- 4)*E2A%= +$55 )$=2C _#)%32)@*)2 $- %32
A)*+,-#.,$./ 45>%-*)@ $= >.>5*/*#= %* >. #.,2)+)$%2) *) 2K2. =%*AI 2RA3>./2? %32. E#=% 5$I2
3*+ %32 _(\ +$55 .*% >55*+ > [) -*)
;6`
@>& $.A5#,2 %32 B>AI/)*#., *- %32 -*#.,2)=e%2>@? %32 K$>B$5$%& *- %32 B#=$.2== $. %2)@= *-4)*,#A%e@>)I2% >., &2% +$55 52>K2 ,$=A)2%$*. -*) 45>%-*)@= %* >55*+ B#=$.2==2= %3>% >)2 3$/3 )$=I %* =%$55 5$=% %32$)
4)*E2A%=C
-
5/21/2018 Equity Crowdfunding Dissertation
34/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
FU
$.%2)@2,$>)$2= A>. >--*), %* B2 =2% 3$/32)C N% +*#5, >5=* =>K2 %32 _(\ -)*@ 3>K$./ %* ,2>5
+$%3 > %3$), 4)*B52@? %3>% *- 4**)5& *42)>%2, $.%2)@2,$>)$2= +3* $. %32 3*42= *- 2>).$./
%32$) Wf -22? >55*+ >55 >., =#.,)& %* 5$=% *. %32$) 45>%-*)@ $. >.%$A$4>%$*. *- > B)2>I>+>&
3$%C;F7
_#)%32)@*)2? $. %32 +$,2) $.%2)2=% *- 4)2=2)K$./ %32 $@>/2 *- %32 $.,#=%)&? >= ->) >=
4#B5$A =%>%2@2.%= /*? %32 B$/ 45>%-*)@= +$%3$. %32 XY 3>K2 >5)2>,& %>I2. %32 =%>.A2 *-
K2%%$./ 4)*E2A%= %* =*@2 ,2/)22? %32 )#52 %3>% )2"#$)2= >==2==@2.% +$55 @2)25& A)&=%>5$=2 %32
4)*A2== >., >5=*? $@4)*K2 %32 42)A24%$*. >., %)#=% B*%3 -)*@ +$%3$. >., +$%3 *#% %32
$.,#=%)&C
N. >,,$%$*. %* %32 $.%2)@2,$>)& 3>K$./ %32 B#),2. *- >==2==$./ %32 =#$%>B$5$%& *- B#=$.2==2=
%* )>$=2 A>4$%>5C N% =3*#5, B2 %32 A>=2 %3>% >55 =#AA2==-#55& -#.,2, B#=$.2==2= @>I2 >K>$5>B52
%* %32$) $.K2=%*)= -$.>.A$>5 =%>%2@2.%= $. 5$.2 +$%3 %32 A#))2.% %>R )2/$@2 -*) A*@4>.$2=
)2/$=%2)2, +$%3$. %32 XY;F;
C )/#@2.% >/>$.=% $@452@2.%>%$*. *- %3$= @2>=#)2 $= %3>%
A*@42%$%*)= +$55 4>& A5*=2 >%%2.%$*. %* %3*=2 -$.>.A$>5= >., @>& A>#=2 A)*+,-#.,2,
B#=$.2==2= %* =#--2) > ,2%)$@2.%? $% $= >K2))2, %3>% %32 A*=% *- 5*=$./ > =5$/3% A*@42%$%$K2
2,/2 $= +*)%3 %3>% 42>A2 *- @$., >., %)>.=4>)2.A& %3>% > m4#B5$Ak =%>%2@2.% *- >AA*#.%= +$55
4)*K$,2 -*) >55 4>)%$A$4>.%=C \,,$%$*.>5 4)*%2A%$*. -*) $.K2=%*)= =3*#5, $.A5#,2 > @>R$@#@
,$5#%$*. )>%2 *- W7f %* 4)2K2.% #.->$).2== >= +255 >= =* $==#2)= 3>K2 %* =>A)$-$A2 @*)2 *-
%32$) *+. 2"#$%& )>%32) %3>. A3$4 >+>& >% $.K2=%*)= =%*AI B& %32 $==#2 *- @*)2 =3>)2=C D3$52
%3$= @>& ,2%2) -*55*+ *. -#.,$./ -)*@ 5>)/2) $.=%$%#%$*.>5 $.K2=%*)= =#A3 >= K2.%#)2
A>4$%>5$=%= >., >./25 $.K2=%*)=? > B#=$.2== 3>= K>)$*#= *4%$*.= >K>$5>B52 %* %32@ $. %2)@= *-
-#.,)>$=$./? 161 5*>.=? B>.I 5*>.=? B**%=%)>44$./? >44)*>A3$./ >./25 $.K2=%*)=? A*5, A>55$./
K2.%#)2 A>4$%>5$=%= S >55 *- +3*@ 3>K2 >=42A%= +3$A3 @>& ,2%2) %32 $==#2)C
_#)%32)? %32)2 =3*#5, .*% B2 > %3)2=3*5, *. >.& =$./52 $.K2=%*) $. %2)@= *- %32 >@*#.% %3>%
@>& B2 $.K2=%2,C N- %32)2 >)2 .* )2=%)$A%$*.= *. 3*+ @#A3 > 42)=*. @>& />@B52 >% >.& *-
%32 #B$"#$%*#= A>=$.*= >., B**I@>I2)= ,*%%$./ 2K2)& 3$/3 =%)22%? #.,2) %32 >==#@4%$*.
%3>% 42*452 #.,2)=%>., -#55 >., +255 %32 )$=I= *- />@B5$./? %32. $% $= =#//2=%2, %3>% .*% *.5&
+$55 %32 @*.2& B2$./ 45*+2, $.%* A)*+,-#.,$./ B2 @*)2 #=2-#5? B#% %32 2R42A%2, )2%#). $=
;F7= @>,2 B& V>K>5 >K$I>.% H_*#.,2)? \./25CA*J >% 4>.25 ,$=A#==$*. *. A)*+,-#.,$./ >% T%>.-*),
a>+ TA3**5C *AIA2.%2)C5>+C=%>.-*),C2,#? g()*+,-#.,$./0 %$*. #, w
i$=>=%2)v u T%>.-*), *AI (2.%2) _*) (*)4*)>%2 O*K2).>.A2g H67;UJ b*.5$.2cC;F;
& %3>% =%>%2@2.%= =3*#5, B2 >K>$5>B52 %* $.K2=%*)= >% 52>=% *.A2 42) A>52.,>) &2>)? 2>A3 A>52.,>)&2>) %32 B#=$.2== $= $. *42)>%$*.? -#)%32) %* %3>%? #4*. %32 ->$5#)2 *- %32 B#=$.2==? > -#55 =%>%2@2.% *- >AA*#.%=
=3*#5, B2 4)2=2.%2, %* $.K2=%*)= -*) %)>.=4>)2.A&C
-
5/21/2018 Equity Crowdfunding Dissertation
35/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
FW
@*)2 %3>. A*@@2.=#)>%2 +$%3 %32 52K25 *- )$=I $.K*5K2,C 4= +$55 @2>.
%3>% %32 @*)2 >. $.K2=%*) 3>= $.K2=%2, $. >. 2.%2)4)$=2? %32 2--2A% *- 3>K$./ >. >,,$%$*.>5
mA322)52>,2)k *) 2K2. >A%$K2 2K>./25$=% *- %32 B)>., +$55 >,, K>5#2 %* =>$, 2.%2)4)$=2C
N% $= 3*42, %3>% %3$= 4)*4*=2, >5%2).>%$K2 )2/#5>%*)& )2/$@2 +$55 B2 @*)2 2--2A%$K2 >%
4)2K2.%$./ -)>#, >., >5=* >55*+ %32 A)*+, %* 2R2)A$=2 %32 -#55 +2$/3% *- %32$) 4*+2)C D3$52
%3$= 4)*4*=2, )2/$@2 $= .*% 2.%$)25& +$%3*#% )$=I? %32 B>=$A 4)2@$=2 $= %3>% $- %32)2 $= /*$./ %*
B2 )$=I .* @>%%2) +3>%? %32. >% %32 K2)& 52>=%? %3*=2 4>)%$A$4>.%= +3* >==#@2 %32 52>=% )$=I
-*) %32 @*=% )2+>), =3*#5, %32)2-*)2 =3*#5,2) %32 B$//2=% B#),2. $. %2)@= *- 4)2K2.%$*. *-
-)>#, >., 4)*%2A%$*. *- $.K2=%*)= H+3* 3>K2 %32 #.-*)%#.>%2 4*=$%$*. *- B2$./ >% %32 3$/32=%
)$=IJC
N12 )'*6$5,7'*
!"#$%& A)*+,-#.,$./ 3>= B22. A>552, %32 ,2@*A)>%$=>%$*. *- A>4$%>5? %32 %)>,$%$*.>5 @*,25 *-
)>$=$./ @*.2& $= *#%@*,2,C /2 *- =*A$>5 A>4$%>5 >., )$/3%-#55& =*C [>.I= >.,
-$.>.A$>5 $.=%$%#%$*.= >A% $. %32$) *+. =$./#5>) B2=% $.%2)2=%=? =* ,* *),$.>)& 42*452 B#% %32)2
>)2 =$/.$-$A>.%5& @*)2 *),$.>)& 42*452 *#% %32)2? 2>A3 +$%3 > ,$--2)2.% )$=I >442%$%2 >., .2%
+*)%3C D32)2 -$.>.A$>5 $.=%$%#%$*.= )2>A% %* @>)I2%=? 42*452 )2>A% %* 2@*%$*.=j -$.>.A$>5
$.=%$%#%$*.= $.K2=% $. .#@B2)=? 42*452 $.K2=% $. 42*452C
.=+2) %* %32 )2/#5>%$*.= %3>% +2 3>K2 2R>@$.2, >B*K2? 2>A3
E#)$=,$A%$*. 3>= B>=2, %32$) )2/$@2 *. > ,$--2)2.% *42)>%$./ 43$5*=*43& >., 5$I2+$=2? %32
>5%2).>%$K2 )2/$@2 4)*4*=2, -*) %32 XY $= 4)2,$A>%2, *. %32 $,2> *- *42.$./ A)*+,-#.,$./
%* %32 @>==2= >., -*)A$./ %32 4>)%$2= +3* ,2)$K2 %32 )2>5 B2.2-$% %* B2 325, %* > 3$/32) 52K25
*- >AA*#.%>B$5$%&C X.-*)%#.>%25&? *.5& %$@2 +$55 %255 3*+ %32 @>)I2% +$55 2K*5K2? +32%32) *)
.*% 2"#$%& A)*+,-#.,$./ +$55 B2 %32 .2R% B#BB52 )2@>$.= %* B2 =22. B#% +3>% $= A52>) $= %3>%
+2 >)2 >% %32 ,>+. *- > .2+ >/2 *- 4)$K>%2 2"#$%& $.K2=%$./? *.2 %3>% $= -#55 *- 4)*@$=2 >.,
>5=* ,>./2)C
N% $= > .2>) A2)%>$.%& %3>% -)>#, +$55 *AA#) =*@2+32)2 ,*+. %32 5$.2? .* @>%%2) %32 +$=,*@
*- A)*+,= *) %32 =A)#%$.& *- 2>/52G2&2, )2/#5>%*)=C D3>% $= $@4*)%>.% $= %* )2>5$=2 %3>%
*#%)$/3% -)>#, >., 3*.2=% ->$5#)2 >)2 .*% %32 =>@2C % A*#5, 3>442. %*
2"#$%& A)*+,-#.,$./ $= +32)2 *.5& > =252A% -2+ >)2 >B52 %* 4>)%$A$4>%2? A)*+,-#.,$./
-
5/21/2018 Equity Crowdfunding Dissertation
36/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
F:
45>%-*)@= 5*=2 *#% >= %32 4**5 *- @*.2& $= %** =@>55 %* /* >)*#.,? B#=$.2==2= 5*=2 *#%
B2A>#=2 %32& =%>., %* )>$=2 5*+2) A>4$%>5 >@*#.%= >., @*)2 $@4*)%>.%5&? 5*=2 %32 K>5$,>%$*.
-)*@ > 5>)/2) >., @*)2 ,$K2)=2 /)*#4 *- $.,$K$,#>5=C
\,>@ T@$%3? ->%32) *- @*,2). 2A*.*@$A= *.A2 =>$,? %3>%j
N% $= .*% B& >#/@2.%$./ %32 A>4$%>5 *- %32 A*#.%)&? B#% B& )2.,2)$./ > /)2>%2) 4>)% *-
%3>% A>4$%>5 >A%$K2 >., 4)*,#A%$K2 %3>. +*#5, *%32)+$=2 B2 =*? %3>% %32 @*=%
E#,$A$*#= *42)>%$*.= *- B>.I$./ A>. $.A)2>=2 %32 $.,#=%)& *- %32 A*#.%)&C
D3>% A)*+,-#.,$./ >55*+= -*) $= %3>% %3*=2 +3* >)2 B52==2, +$%3 $.,#=%)$*#=.2== >., /$-%2,
+$%3 $,2>= B#% >)2 =3*)% *- A>4$%>5 @>& -$., %3*=2 +3* >)2 2.,*+2, +$%3 >. >B#.,>.A2 *-
=#A3 A>4$%>5 >., +3* >)2 +$55$./ %* 4>)% +$%3 =*@2 *- +3$A3 %3>% @>& >55*+ %32@ %* )2>4 %32
B2.2-$%= *- %32 $.,#=%)$*#=.2== *- *%32)=C %$=>%$*. *- A>4$%>5 >., %32
A*.-5#2.A2 *- %32 N.%2).2%? 2.%)24)2.2#)=3$4? %2A3.*5*/& >., .*+? A)*+,-#.,$./C
-
5/21/2018 Equity Crowdfunding Dissertation
37/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
F8
V7#$7'@."=;/
!"#$% '( )"*%*
!" !"#$%&'()& +# ,#-./0
$" United States v. Bernard L. Madoff 09 Cr. 213 (DC)
+%,-$"./'0* "01 2/3%4./5%*
%" $&&'(%)(*+ ,-./012 34 534-463-7 8421.9:0412 ;3.0613
-
5/21/2018 Equity Crowdfunding Dissertation
38/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
F9
!'"S0770J7-::0 OK T-:W0.1 N -4@ R6I[304W-6I0. ?K L+.C[@J94@34A^ N-ZZ34A NI0 D3AI1
+.C[@L b$&!%c aC9.4-7 CJ S9234022 d0419.34A"
!B"+9::34A ; -4@ aCI-4 RK L;0:-4@\;.3i ?710.4-13
-
5/21/2018 Equity Crowdfunding Dissertation
39/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
F`
%&"S0770J7-::0 OK T-:W0.1 N -4@ R6I[304W-6I0. ?K E$&!&F L+.C[@J94@34A^ ?4
[email protected] P.A-43h-13C4 O0.2Z0613
-
5/21/2018 Equity Crowdfunding Dissertation
40/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
U7
'$"*9.CZ0-4 +C::3223C4K LD02ZC4202 NC NI0 O9W736 +C42971-13C4 P4 +.C[@J94@34A 84
NI0 *>L E$&!'F"
'%"*9.CZ0-4 +C::3223C4K L>470-2I34A NI0 OC10413-7 PJ +.C[@J94@34A 84 NI0 *9.CZ0-4
>43C4 +P,E$&!'F !U$ 534-7L E$&!'F"
=%#*/.%*
''"S-91321- +K L*`67923
-
5/21/2018 Equity Crowdfunding Dissertation
41/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
U;
B%"56-"C.A"9/K L+.C[@J94@34A \ 534-463-7 +C4@961 ?91IC.31VL E$&!'F
]I11Z^(([[["J6-"C.A"9/(6C429:0.2(J34-463-7\20.20 q 84@30ACACL E$&!'F bC47340c
]I11Z2^(([[["34@30ACAC"6C:(-WC91(10.:2_ -660220@ != ,-V $&!'"
=!"84@30ACACK Lg0-7W0 MCW0^ NI0 P47V Q-V NC ?91C:-136-77V ,0-29.0 +-7C.30 841-/0L
E$&!'F bC47340c ]I11Z2^(([[["34@30ACAC"6C:(Z.Cj0612(I0-7W0\ACW0\1I0\C47V\[-V\
1C\-91C:-136-77V\:0-29.0\6-7C.30\341-/0rIC:0_ -660220@ !$ ,-V $&!'"
=$"84@30ACACK LT01L2 S937@ ? MC@@-:4 N027- ,9209:L E$&!'F
]I11Z^(([[["34@30ACAC"6C:(Z.Cj0612(701\2\W937@\-\AC@@-:4\1027-\:9209:\\B_
-660220@ !B ,-V $&!'"
=%"i36/21-.10."6C:K Li36/21-.10. S-2362 t 5.0l90417V ?2/0@ e90213C42 E5?eF m
i36/21-.10.L E$&!'F bC47340c
]I11Z2^(([[["/36/21-.10."6C:(I07Z(J-l(/36/21-.10.uW-2362o.0JsJ-ln29W6-10AC.Vr?
66C_ -660220@ U ,-V $&!'"
-
5/21/2018 Equity Crowdfunding Dissertation
42/45
!"#$%& ()*+,-#.,$./0 1*+2) %* %32 12*452 67786896:
U6
='"i36/21-.10."6C:K LP40 S3773C4 ;C77-.2L E$&!'FbC47340c
]I11Z2^(([[["/36/21-.10."6C:(!W3773C4_ -660220@ $) ?Z.37 $&!'"
=B"i36/21-.10.K LiPS* D*; \ !&&v a?O?G*R* S**D 5*; iPS* S**5 a*DipL E$&!'F
]I11Z2^(([[["/36/21-.10."6C:(Z.Cj0612(/CW0.0@(/CW0\.0@\!&&\j-Z-4020\W00.\J0@