Can Capital Defy the Law of Gravity ? Investor Networks and Startup Investment ∗

@inproceedings{Catalini2017CanCD,
  title={Can Capital Defy the Law of Gravity ? Investor Networks and Startup Investment ∗},
  author={Christian Catalini and Xiang Hui},
  year={2017}
}
In early crowdfunding platforms, backers would directly fund projects without relying on traditional experts to select and curate projects for them. This approach becomes problematic when equity is involved, since the degree of asymmetric information and the risk of moral hazard are higher than in reward-based crowdfunding. Platforms have therefore experimented with market design solutions targeted at counterbalancing these risks. We study how online syndication by professional investors… CONTINUE READING

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