Investor retention in equity crowdfunding

Crowdfunding platforms promise to disrupt investing as they bypass traditional financial institutions through peer-To-peer transactions. To stay functional, these platforms require a supply of investors who are willing to contribute to campaigns. Yet, little is known about the retention of investors in this setting. Using four years of data from a leading equity crowdfunding platform, we empirically study the length and success of investor activity on the platform.We analyze temporal variations in these outcomes and explain patterns using statistical modeling. Our models are based on information about user's past and current investment decisions, i.e., content-based and structural similarities between the campaigns they invest in. We uncover the role of past successes and diversity of investment decisions for novice vs. serial investors. Our results inform potential strategies for increasing the retention of investors and improving their decisions on crowdfunding platforms.