Research Article
Is Equity Crowdfunding the Leapfrog to Companies’ Success?
Financial Performance in China
Chang Jiang , Raquel P´ erez-Est´ ebanez , and Elena Urqu´ ıa-Grande
Faculty of Economics & Business, Department of Financial Administration and Accounting, Complutense University of Madrid,
28223 Madrid, Spain
Correspondence should be addressed to Chang Jiang; chanjian@ucm.es
Received 16 June 2022; Revised 26 July 2022; Accepted 1 August 2022; Published 29 August 2022
Academic Editor: Kapil Sharma
Copyright © 2022 Chang Jiang et al. is is an open access article distributed under the Creative Commons Attribution License,
which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
As the fastest-growing crowdfunding model, equity crowdfunding (ECF) brings high returns and uncertainty. In this context, it is
crucial to understand these crowdfunding projects’ actual performance. Since ECF is currently in the early stage of integration,
there are still a lot of risk issues, such as the uncertainty of equity structure, capital supervision, or project management. erefore,
this paper develops a new profitability indicator, “return on registered capital,” to test its impact on the ECF project’s actual return.
is paper studies which factors affect the financial performance of ECF projects through the traditional statistical model and a
deep neural network (DNN) model. ere is evidence that return on registered capital affects the actual return of the project. At
the same time, the company’s operating time and the number of employees had an unexpected effect on project performance. In
addition, the recognition accuracy of the DNN model in this study exceeds 97%, which affirms the applicability of the DNN model
in the analysis of ECF success factors. is paper also uses tenfold cross-validation to prove that deep learning has certain
advantages in this topic’s accuracy and generalization error. is study explores whether company representatives’ gender and
knowledge level affect project performance. e results will be described in detail in the paper.
1. Introduction
e Internet has changed the way of social communication
and people’s way of life, and it also had a massive impact on
the financial industry’s innovation. Entrepreneurs, especially
in SMEs, have difficulty obtaining business loans or in-
vestments in the early stages of their business, resulting in
many projects ultimately failing. With the continuous de-
velopment of Internet finance, many new financing methods
have emerged. Crowdfunding is one of them, it is a “pre-
consumption” model that applies to ordinary backers by
raising their investments to fund projects, and they can also
earn future profits through projects [1].
Generally, scholars divide crowdfunding into four cat-
egories: donation-based, reward-based, equity, and lending.
Equity crowdfunding (ECF) has developed rapidly in recent
years as a subcategory of crowdfunding. Vulkan et al. [2]
pointed out in their research that the development of ECF
will pose a massive challenge to venture capital and business
angel financiers in the future. Several years have passed, and
until now, facts have proved that ECF has substantially
impacted traditional investment fields.
e existing research on the ECF theme has developed
rapidly in recent years. On the one hand, some researchers
have studied ECF development, such as ECF and pervasive
finance [3], market size and geographical distribution [4],
and plagiarizing product ideas [5].
On the other hand, some researchers have paid attention
to ECF’s performance and success factors’ internal activities.
is direction has become a hot spot for ECF research
nowadays. Some researchers focus on the project sponsors’
social capital [6], the static factors like the ultimate campaign
outcome of innovative companies [7, 8], and the return on
investment [9, 10] all the factors on project success.
As a new investment and financing mechanism, entre-
preneurs who need funds can use ECF for rapid financing.
e public can also use ECF to support projects that require
funds and obtain high returns. Also, it brings great un-
certainty. erefore, the present research proposes a new
idea to improve the performance research of ECF. Unlike
Hindawi
Computational Intelligence and Neuroscience
Volume 2022, Article ID 7814550, 12 pages
https://doi.org/10.1155/2022/7814550