Faculty of Business Administration

Investors’ choices between cash and voting rights:
Evidence from dual-class equity crowdfunding

Prof. Douglas CUMMING
Professor of Finance and Entrepreneurship
Schulich School of Business
York University



This paper examines for the first time the value of dual-class equity crowdfunding as a digital governance model. Unique to this context, companies can set an investment threshold under which no voting rights are granted, making the issuance of class A vs. class B shares, depending on individual investors. Using a sample of 491 offerings on the UK platform Crowdcube in the period 2011-2015, we find that a higher separation between ownership and control rights lowers the probability of success of the offering, the likelihood of attracting professional investors, and the probability of long-run success. Our evidence also shows that, different from small investors, professional investors care about the implementation of a threshold for the attribution of voting rights and often bid the class A threshold exactly.

Date: 16 October, 2018 (Tuesday)
Time: 19:00~20:30
Venue: Faculty of Business Administration, E22-G013


A Short Biography of Prof. Douglas CUMMING

Professor Douglas Cumming is Professor of Finance and Entrepreneurship at the Schulich School of Business, York University, Ontario. He is the Editor-in-Chief of the Journal of Corporate Finance, the Founding Editor-in-Chief of the Annals of Corporate Governance, the Co-Editor-in-Chief of Finance Research Letters, and a Co-Editor of Entrepreneurship Theory and Practice. He is also an Associate Editor of a number of top academic journals, including the Journal of Banking and Finance, British Journal of Management, Corporate Governance: An International Review, European Journal of Finance, Eurasian Business Review, and Studies in Economics and Finance.

Since completing his J.D. /Ph.D. in 1999, Professor Cumming has published over 150 articles in leading refereed academic journals that include the Academy of Management Journal, Journal of Financial Economics, Journal Financial and Quantitative Analysis, Review of Financial Studies, Journal of Banking and Finance, Journal of International Business Studies, Journal of Business Venturing, Research Policy, and the Economic Journal, among others. As well, he is the coauthor/editor of numerous books with Elsevier, Oxford, Springer, and Wiley. For example, the Oxford Handbook of IPOs (2018), the Oxford Handbook of Sovereign Wealth Funds (2017), the Oxford Handbook of Entrepreneurial Finance (2012), the Oxford Handbook of Private Equity (2012), and the Oxford Handbook of Venture Capital (2012). 

Professor Cumming is a top ranked author at SSRN and RePEc based on downloads and citations, and has won numerous academic awards. He has consulted for a number of private and governmental organizations in North America, Europe and Australasia. His work has been reviewed in numerous media outlets, including The Economist, the Wall Street Journal, the New York Times, and The New Yorker.