Abstract
This study investigates the role of venture capitalists (VCs) and business angels (BAs) in the post-campaign performance of equity crowdfunded (ECF) firms. Analyzing 1373 UK ECF firms, we examine post-campaign outcomes, including firm size, financial performance, innovation, and future entrepreneurial finance events (i.e., follow-on funding, M&As, or IPOs). We find that both VC- and BA-backed ECF firms exhibit lower innovation than matched ECF firms without such investors. There are limited other differences with non-backed ECF firms, except that BA-backed-only ECF firms are larger post-campaign. ECF firms with multiple investors of the same type are larger post-campaign, but they have fewer granted patents, while ECF firms backed by distinct investor types have fewer employees and fewer patents. However, ECF firms with VCs and/or BAs, except for BA-backed-only ECF firms, all outperform ECF firms without such investors in future entrepreneurial finance events. Our findings offer new evidence on the heterogeneous effects of VCs and BAs, addressing calls to desegment the entrepreneurial finance literature and explore investor co-participation.