What do we know about the choices of entrepreneurs before the equity crowdfunding campaign?

This literature survey focuses on the pre-investment phase of equity crowdfunding, encompassing three key areas: (i) a comparative analysis of equity crowdfunding (ECF) in relation to traditional sources of entrepreneurial funding, such as venture capital and business angels; (ii) a discussion on why and when entrepreneurs prefer ECF; and (iii) an in-depth examination of the diverse models of ECF platforms. This paper is relevant for both practice and research. It can help entrepreneurs to identify under what circumstances ECF might be preferable to traditional sources of start-up funding and which platform model best suits their needs. It is also relevant for research because, besides providing an organized summary of the literature on this new way of financing start-ups, it also identifies some inconsistencies and gaps in the existing literature, providing some clues for further investigations. This paper provides a literature survey on the pre-investment phase of ECF, exploring the decisions made by entrepreneurs before embarking on the ECF campaign. Specifically, we conduct a comparative analysis of ECF against alternative entrepreneurial funding sources. Additionally, we explore the motivations driving entrepreneurs' preference for ECF and thoroughly examine various ECF platform models, providing insights into their distinct characteristics. The paper concludes by proposing avenues for further research and acknowledging the limitations of current investigations. Two primary implications emerge from this study. Firstly, it proves invaluable for entrepreneurs aiming to discern the situations where ECF presents advantages over traditional start-up funding sources and to identify the platform model that aligns best with their specific needs. Secondly, it provides a structured, comprehensive, updated summary of the existing literature on this innovative start-up funding source. Furthermore, it identifies inconsistencies and gaps within the current body of research, offering valuable insights and suggesting avenues for further investigation in this field.