Beyond Returns: How Motivation Shapes Crowdinvestment

What is it about?

The paper examines how psychological motivations shape investors’ decisions to participate in equity crowdfunding, challenging the assumption that these choices are driven primarily by financial gain. Drawing on Self-Determination Theory, specifically the Basic Psychological Needs Theory, and complemented by Prospect Theory, the authors analyse 15 semi-structured interviews with crowdinvestors from Europe and North America. Through thematic and framework analysis, the study uncovers how autonomy, competence, and relatedness needs manifest in investors’ decision-making, and identifies deeper psychological dimensions such as self-efficacy, eudaimonic well-being, and self-transcendence. The authors introduce the concept of self-endorsement as a mechanism through which investors validate their decisions and reduce the perceived risks associated with uncertain early-stage investments.

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Why is it important?

The study offers an understanding investor behaviour in equity crowdfunding by moving beyond traditional economic explanations and instead foregrounding the psychological processes shaping investment decisions. By integrating Self-Determination Theory with Prospect Theory for the first time, it provides a richer and more holistic account of how individuals interpret risk, navigate uncertainty, and find personal meaning in early-stage investments. The introduction of self-endorsement as a cognitive reappraisal mechanism presents a novel theoretical insight with relevance across behavioural finance and related fields. Practically, the findings highlight pathways for platforms and entrepreneurs to strengthen investor engagement through communication strategies that foster autonomy, competence, and relatedness, opening new avenues for research and practice.