INFORMATION PROBLEMS, CROWDFUNDING AND THE CAPITAL STRUCTURE OF BUSINESS START-UP

Summary : Business start-ups face financial constraints due to lack of internal funds and information problems, (Carpenter and Petersen, 2002). Crowdfunding is the cheapest method to limit such problems. We are interested in studying the decisive weight of financial problems in information opacity and asymmetry on the decision about the capital structure of entrepreneurial projects. Our study is conducted on the PSED(panel study of entrepreneurial dynamics). In fact, evidence from analyzing the role of information opacity proves that the main source of finance is equity rather than debt. Moreover, Information asymmetry limits crowdfunding. In fact different parties engaged in funding have no access to the same level of information (Myers and Majluf, 1984). The entrepreneur might be even more reluctant to disclose information to some investors, due to the lack of professionalism, Schwienbacher and Larralde, (2010).
Keys words: Capital structure, crowdfunding, information asymmetry, information opacity.

Capital structure, crowdfunding, information asymmetry, information opacity.