A Green flag over mobile industry start-ups: Human capital and past investors as investment signals

Crowdfunding and online start-up platforms are becoming important communication tools for startups and investors. Existing literatures on online start-up platforms usually focus on reward-based crowdfunding platform, which do not offer any equity to backers. In addition, there have not been many empirical researches about equity-based crowdfunding due to the novelty of the regulation. This study analyzes the association between funding amount and early stage start-ups' underlying characteristics, the type of past investors, and influence of investors in the context of equity-based crowdfunding. The distinction of our research is the aspect of approach that we use population data from online start-up platform for the mobile industry. We find that start-up's funding outcome is positively related to start-up's human capital and pure investors. Moreover, our study extends theoretical understanding of the importance of human capital and past investors in start-up, and also contributes to the entrepreneurship literature by examining creditable signals for early stage start-up investment.