Research Summary: Digital equity crowdfunding platforms have brought an unprecedented number of international investment opportunities to investors' reach. Although most equity crowdfunding investments are still made domestically, cross-border investments often have a decisive role in a campaign's success. We therefore ask what drives cross-border investments and theorize how international investors' attention directs their investment choices. We leverage unique data and several complementary approaches to examine this question. Our contribution to the equity crowdfunding literature is twofold: (a) we theorize and empirically show how international investor attention affects cross-border equity crowdfunding investments, and (b) we conduct the first empirical study of the drivers of cross-border investments in equity crowdfunding. These findings also have implications for new venture internationalization research and the broader literature on investor attention.
Managerial Summary: Although most equity crowdfunding investments are still made domestically, cross-border investing is growing, and cross-border investments are often critical for campaign success. We show that to attract cross-border investments, it is important for platforms and fundraising companies to capture foreign investors' attention. Platforms and companies can support this through measures such as international digital marketing. In addition, we found that cross-border investors are more likely to invest in companies with investors' nationalities represented in the team. Companies can thus benefit from nurturing international diversity and marketing in their team members' countries of nationality. Also, companies can seek investments even from distant countries because once investors invest abroad, distance-be it geographic, institutional, cultural, or linguistic-no longer plays a major role in their investment decisions.