Are Syndicates the Killer App of Equity Crowdfunding?

@article{Agrawal2016AreST,
  title={Are Syndicates the Killer App of Equity Crowdfunding?},
  author={Ajay Agrawal and Christian Catalini and Avi Goldfarb},
  journal={California Management Review},
  year={2016},
  volume={58},
  pages={111 - 124}
}
Information asymmetry presents a challenge to equity crowdfunding just as in other markets for equity capital. Investors are less likely to finance startups when it is difficult to assess quality. Syndicates reduce market failures caused by information asymmetry by shifting the focal investment activities of the crowd from startups to lead investors. Syndicates align the incentives of issuers, lead investors, and follow-on investors by providing incentives for lead investors to conduct due… 
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