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Article
Publication date: 7 February 2020

Enrico Battisti, Fabio Creta and Nicola Miglietta

This paper gathers initial evidence about the nature and features of the equity crowdfunding model in Italy, especially in terms of regulations. The purpose of this study…

Abstract

Purpose

This paper gathers initial evidence about the nature and features of the equity crowdfunding model in Italy, especially in terms of regulations. The purpose of this study is to examine how equity crowdfunding might support the real estate sector in Italy.

Design/methodology/approach

To explore the recent initiatives in the development of FinTech in Italy, especially referring to equity crowdfunding’s instrument, a qualitative perspective is used. In particular, this paper relies on primary data from regulations and secondary data from the public domain, which are examined in relation to the current literature.

Findings

The results of this study show that equity crowdfunding represents a funding method that is rapidly increasing in Italy, despite rather rigid regulation. Among the various sectors involved, the real estate sector could benefit from the crowdfunding models and, specifically, from the equity one. The development of new real estate equity crowdfunding portals that allow diversification of investment (by reducing the typical entry barriers for real estate investment) could guarantee greater investment transparency and simplicity.

Practical implications

Real estate crowdfunding can be a simple way to invest in the real estate industry. Thanks to the use of technology, specifically internet-based platforms, this type of crowdfunding allows for small investors, as well as professional investors, to access an asset class otherwise not open to small investment tickets and improve the diversification of investments.

Originality/value

Although recent literature has examined the concept of crowdfunding and highlighted different models, aspects and campaigns, no prior studies, to the authors’ knowledge, have explicitly and jointly investigated, also based on the state of art of regulation, the equity crowdfunding model and the real estate sector in Italy.

Details

Journal of Financial Regulation and Compliance, vol. 28 no. 3
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 16 August 2018

Nicolle Montgomery, Graham Squires and Iqbal Syed

The purpose of this paper is to review the literature on the Disruptive Innovation Theory and on the disruptive potential of real estate crowdfunding (RECF) in the real

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Abstract

Purpose

The purpose of this paper is to review the literature on the Disruptive Innovation Theory and on the disruptive potential of real estate crowdfunding (RECF) in the real estate finance industry, assessing whether RECF constitutes a potentially disruptive innovation to the real estate finance industry. Based on a review and synthesis of the literature, the paper advances an initial conceptual framework of core characteristics of disruptive innovations. This framework is used to examine the disruptive potential of RECF in the real estate finance industry.

Design/methodology/approach

This paper is a systematic literature review that synthesizes and analyzes relevant extant research articles retrieved from online databases.

Findings

Findings suggest that according to the theory of disruptive innovations, and the core characteristics of disruptive innovations, RECF is a potentially disruptive innovation to the real estate finance industry. RECF seems to generally align with the classic characteristics of disruptive innovations. A more comprehensive and systematic analysis, supported by empirical data, is necessary to evaluate whether and to what extent RECF constitutes a disruptive innovation to the real estate finance industry.

Research limitations/implications

This study has only captured and reviewed articles published and available in database searches. RECF is a nascent field that has recently begun receiving academic attention.

Practical implications

Real estate plays an integral part in the economy, and the way it is financed has become an increasingly important issue following the Global Financial Crisis. This paper provides useful insights for assessing whether and to what extent RECF may be disruptive to the real estate finance industry.

Social implications

RECF may potentially improve accessibility and affordability of real estate finance, thereby helping to address the problem of shortage of real estate project finance.

Originality/value

While RECF is portrayed in the academic and gray literature as a disruptive innovation, its disruptive potential is yet to be determined. This paper advances an initial conceptual framework of defining characteristics of disruptive innovations. This framework is used to evaluate RECF as a potentially disruptive innovation in the real estate project finance industry. This study forms a basis for future empirical examination of the disruptive potential of RECF in the real estate finance industry.

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Article
Publication date: 7 June 2019

Manuchehr Shahrokhi and A.M. Parhizgari

The purpose of this paper is to analyze the determinants and the operational aspects of real estate crowdfunding (RECF henceforth). It addresses RECF growth, drivers and…

Abstract

Purpose

The purpose of this paper is to analyze the determinants and the operational aspects of real estate crowdfunding (RECF henceforth). It addresses RECF growth, drivers and platforms in light of modern digital technology.

Design/methodology/approach

A comparison with traditional real estate funding is provided, and the ease and advantages that RECF offers to real estate investors are analyzed. The risks and rewards of crowdfunding in general and RECF in particular are also addressed.

Findings

Inasmuch as RECF appears novel and disruptive, research in this paper dates RECF back to the seventieth century. The findings thus posit that RECF is an evolutionary process while it is currently transformative and disruptive.

Originality/value

This is a novel look into RECF, particularly in terms of data, analyses and evaluation of alternatives.

Details

Managerial Finance, vol. 46 no. 6
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 30 March 2020

Lucia Gibilaro and Gianluca Mattarocci

The paper aims to study the performance of crowdfunding REITs with respect to traditional REITs in order to evaluate the differences in the risk–return profile and their…

Abstract

Purpose

The paper aims to study the performance of crowdfunding REITs with respect to traditional REITs in order to evaluate the differences in the risk–return profile and their usefulness for a diversification strategy within the indirect real estate investments.

Design/methodology/approach

The paper considers the crowdfunding REITs introduced after the JOBS act in the United States and evaluates their performance and risk during the time period 2016–2018. Performance achieved by crowdfunding REITs is compared with other types of REITs in order to evaluate their usefulness for constructing an optimal portfolio strategy based on a standard mean variance approach.

Findings

Results show that the performance of crowdfunding REITs is more stable over time with respect to other REITs and the lack of correlation with traditional REITs may be exploited for constructing a more efficient diversified portfolio of indirect real estate investments.

Practical implications

Crowdfunding REITs have different performance with respect to standard REITs and, especially individual investors, may benefit from including this new investment opportunity in their portfolio.

Originality/value

The paper is the first study on the performance of the crowdfunding REITs that is evaluating their usefulness for a diversification strategy within the real estate sector.

Details

Journal of Property Investment & Finance, vol. 39 no. 2
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 21 October 2021

Gimede Gigante and Giacomo Cozzio

This study analyses the success factors of crowdfunding campaigns in the real estate sector.

Abstract

Purpose

This study analyses the success factors of crowdfunding campaigns in the real estate sector.

Design/methodology/approach

The success factors of general crowdfunding campaigns were identified then adapted to real estate and tested through multiple statistical analyses (T-tests, correlation matrices, variance inflation factor (VIF) and linear regression).

Findings

The findings shows that crowdfunding use in the real estate sector is evolving and that crowdfunding is a potentially disruptive tool in this sector. They also demonstrate that project duration and expected return on investment (ROI) play key roles in campaign success.

Research limitations/implications

Results are based on the Italian context only. Extending the analysis to other markets represents a fruitful starting point for further analysis.

Practical implications

The outcomes of the paper might be useful both for perspective entrepreneurs, who are considering crowdfunding to finance their projects, and for platforms in order to shape systems and services towards enhancing campaign success.

Originality/value

Although there are existing studies on crowdfunding success factors and applications of crowdfunding as a tool, no previous study specifically investigates the use of crowdfunding in Italian real estate by analysing success factors.

Details

Journal of Property Investment & Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-578X

Keywords

Abstract

Details

The Savvy Investor's Guide to Building Wealth through Alternative Investments
Type: Book
ISBN: 978-1-80117-135-9

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Article
Publication date: 6 November 2017

Braam Lowies, Christa Viljoen and Stanley McGreal

The purpose of this study is to investigate the perceptions of property investors of the risks and returns associated with property crowdfunding as an investment vehicle…

Abstract

Purpose

The purpose of this study is to investigate the perceptions of property investors of the risks and returns associated with property crowdfunding as an investment vehicle. The study contributes to the understanding of alternative property investment vehicles and how it is perceived by investors.

Design/methodology/approach

The study focusses on investor perceptions in using property crowdfunding as an investment vehicle and follows a survey-based design. A questionnaire was finalised after the completion of a pilot study and was distributed to existing property crowdfunding investors via email. Inferential statistical measures were used.

Findings

The results show, to an extent, similarities to general equity-based crowdfunding studies. However, the uniqueness of property crowdfunding as an investment vehicle may explain the insignificance of the results when related to other studies. Overall, the property crowdfunding investor seems to present cautious behaviour with a conservative perception of property crowdfunding as an investment vehicle.

Practical implications

It is recommended that property crowdfunding platforms present prospective investors with more formal regulation of the property crowdfunding industry. Such a regulatory framework may lessen the current level of uncertainty presented by investors.

Originality/value

The study enhances the understanding of the role of property crowdfunding as an alternative investment vehicle in Australia. More importantly, it went some way towards enhancing the understanding of how investors perceive and behave vis-à-vis property crowdfunding as an investment vehicle.

Details

Journal of Financial Management of Property and Construction, vol. 22 no. 3
Type: Research Article
ISSN: 1366-4387

Keywords

Open Access
Article
Publication date: 11 December 2018

Zaiyu Huang, Candy Lim Chiu, Sha Mo and Rob Marjerison

The purpose of this paper is to develop initial evidence about the nature and features of crowdfunding in China, given it is largely unregulated regulatory frameworks.

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6894

Abstract

Purpose

The purpose of this paper is to develop initial evidence about the nature and features of crowdfunding in China, given it is largely unregulated regulatory frameworks.

Design/methodology/approach

The paper used extensive desk research using data collected from the public and private sectors, after which the data was analyzed parallel to existing academic literature, that is, institutional context by Bruton et al. (2014). This paper uncovered patterns of development, profiling crowdfunding platforms, examining the regulatory landscape and providing antecedents of successful crowdfunding projects in China.

Findings

When the traditional financial markets are hard to reach, micro, small and medium enterprises (MSMEs) were starved for capital. Crowdfunding can play a major role in funding and risk sharing. It is an innovative and dynamic vehicle for MSMEs as well as enthusiastic investors in China. Since its initial introduction to China in 2009, crowdfunding has gained substantial popularity in a relatively short period. Currently, there is still not an identifiable guideline on how to delineate the significance of the crowdfunding platform. The development of crowdfunding in China faces a few unresolved key issues. As researchers exploring this phenomenon in new ways, crowdfunding platforms can be enhanced in a manner that benefits the capital seeker, investors and society as a whole.

Originality/value

There is a dearth of information on start-up crowdfunding in Asia. With little data available to analyze, so this paper hopes to contribute to knowledge and provide valuable information to researchers and industry representations. Crowdfunding represents a potentially disruptive change in the way that new ventures are funded. This paper represents an initial analysis in the study of new ventures in China. Finally, the authors provide recommendations for entrepreneurs, investors and policymakers as well as researchers and practitioners with suggestions about yet unexplored avenues of research.

Details

Asia Pacific Journal of Innovation and Entrepreneurship, vol. 12 no. 3
Type: Research Article
ISSN: 2398-7812

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Article
Publication date: 12 October 2018

Ross Malaga, Stanislav Mamonov and Janet Rosenblum

Title II of the Jumpstart Our Business Startups Act aims to make it easier for new ventures to raise funds from accredited investors via equity crowdfunding. The purpose…

Abstract

Purpose

Title II of the Jumpstart Our Business Startups Act aims to make it easier for new ventures to raise funds from accredited investors via equity crowdfunding. The purpose of this paper is to understand whether Title II equity crowdfunding represents an opportunity for women-owned companies (those that have one or more female owners/founders) to raise capital at rates similar to companies owned by men.

Design/methodology/approach

The authors conduct an exploratory analysis using a data set containing 6,234 Title II equity crowdfunded offerings aggregated across 17 crowdfunding platforms between September 2013 and December 2015.

Findings

The authors find that women-owned companies constitute only 15.2 per cent of the ventures seeking funding in this data set; however, gender had no effect on the likelihood of successful fundraising under Title II.

Originality/value

This study is the first to examine the roll of gender on the success of equity crowdfunding campaigns the USA. It provides empirical evidence that crowdfunding has had limited impact on democratizing access to capital for woman-owned startups and small businesses. The data reveal that woman-owned companies are underrepresented in Title II equity crowdfunding to an even greater extent than they are underrepresented in angel and venture capital (VC) investments. The results of this study also highlight the importance of examining the role of gender in equity crowdfunding across different countries.

Details

International Journal of Gender and Entrepreneurship, vol. 10 no. 4
Type: Research Article
ISSN: 1756-6266

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Article
Publication date: 16 November 2021

Yuen Leng Chow and Kok Keong Tan

Blockchain and distributed ledger technologies are set to disrupt the real estate sector in all areas: ownership, sale, management and investment. Tokenization moves…

Abstract

Purpose

Blockchain and distributed ledger technologies are set to disrupt the real estate sector in all areas: ownership, sale, management and investment. Tokenization moves physical real estate to the digital space and could result in substantial cost savings in the pre- and post-tokenization process. This article discusses whether real estate as an asset class is ready for digitalization in the Asia-Pacific (APAC) region.

Design/methodology/approach

Globally, the APAC region has the highest digital adaptation/adoption rates. Regulators in the region are also moving fast to clarify their stance on digital assets. This article adopts a holistic view, from trends, regulations, and technology, to discuss the benefits and challenges of digitalizing real estate in APAC.

Findings

Real estate tokenization is a nascent market but platforms like BrickX, KASA, ADDX, and Minterest have successfully launched real estate tokens in Australia, South Korea, and Singapore, respectively. Tokenization may prove to be a viable funding source for those relatively poorly capitalized financial markets in the APAC region.

Practical implications

This paper discusses the current regulatory and business contexts in relation to the pace of tokenization of real estate in APAC. Opportunities and difficulties are outlined in a concise manner to facilitate more discussion in this area.

Originality/value

Existing reports and research articles tend to focus on the western markets. This article provides a new perspective on tokenization, specifically in the APAC context.

Details

Journal of Property Investment & Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-578X

Keywords

1 – 10 of 220