Abstract
In recent years, crowd funding has risen in significance, enabled by the proliferation of the Internet. Of the various types of crowd funding platforms available, crowd lending and crowd equity most resemble traditional equity and debt based financing instruments with two important distinctions – (i) the funds come from the crowd instead of from financial institutions and rich investors; and (ii) potential supporters can get up-to-date information on the level of support that a project has received thus far before making their decision to commit. This explosive growth in crowd funding presents an opportunity to study whether a company, in seeking its financing from the crowd instead of from more traditional sources such as financial institutions, venture capital and/or angel funding, behave differently from predictions based on mainstream capital structure theory, which used mainly information from publicly listed companies for analysis. This analysis has important implications for Singapore given that crowd funding, with its growing in-country popularity, is an alternate avenue of funding for smaller companies, which may have difficulties obtain financing to support expansion and growth, or to tide over a difficult period due to the high risk involved in lending to them. This thesis provides evidence from crowd funding data sources that though crowd equity funded companies broadly follows the wisdom of their publicly funded counterparts in making financing decisions, the former, in contrast to the latter, tend to be larger in size, be in poor performing industries or are recently established start-ups. While the data set used in this thesis is insufficient for exploring the possible reasons for the discrepancies with established corporate finance literature, further research, with more detailed data from crowd funding sources, can provide further insight on the matter.