Crowdfunding and bank financing: Substitutes or complements?

Anton Miglo

Research output: Contribution to journalArticlepeer-review

9 Citations (Scopus)
11 Downloads (Pure)


In this paper, we analyze a firm choice between crowdfunding and bank financing. For many entrepreneurs, it is an important issue. We analyze a model where the choice of financing is affected by moral hazard problem regarding the choice of production scale that favors bank financing, and by the uncertainty about market demand that favors crowdfunding. We argue that long crowdfunding campaigns or campaigns with large targets usually are less efficient in mitigating moral hazard problem than small/short campaigns. We also argue that high-quality firms and firms with potentially large markets will tend to select bank financing while projects with largest amount of investment should select mixed financing where the firm uses a short crowdfunding campaign and a bank loan. Most of our model empirical predictions have not been directly tested so far while they are indirectly consistent with available evidence.

Original languageEnglish
Pages (from-to)1115–1142
Number of pages28
JournalSmall Business Economics
Issue number3
Early online date15 Jan 2022
Publication statusPublished - Oct 2022


  • crowdfunding, debt financing, moral hazard, reward-based crowdfunding, demand uncertainty
  • Debt financing
  • Crowdfunding
  • Reward-based crowdfunding
  • Demand uncertainty
  • Moral hazard

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