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The Impact of the Founding Team’s Human Capital on Token Sale Success: An analysis of European ICOs between 2016-2021

Leuba, Geoffroy LU and Gill, Amrit LU (2022) ENTN19 20221
Department of Business Administration
Abstract
The emergence of blockchain technology enables entrepreneurs to raise capital in an innovative way, by addressing a crowd of online investors without the need for an intermediary. This phenomenon is known as token sales, and it may have the potential to revolutionize entrepreneurial finance. However, information asymmetry is particularly severe in this context, and the need for entrepreneurs to send signals to investors arises as an essential challenge to venture financing. We explore the possible impact that human capital may play as a signal for initial coin offerings (ICOs), a type of token sale. By looking at the education of the entrepreneurial team, as well as the relevant skills of its members, our findings suggest that human... (More)
The emergence of blockchain technology enables entrepreneurs to raise capital in an innovative way, by addressing a crowd of online investors without the need for an intermediary. This phenomenon is known as token sales, and it may have the potential to revolutionize entrepreneurial finance. However, information asymmetry is particularly severe in this context, and the need for entrepreneurs to send signals to investors arises as an essential challenge to venture financing. We explore the possible impact that human capital may play as a signal for initial coin offerings (ICOs), a type of token sale. By looking at the education of the entrepreneurial team, as well as the relevant skills of its members, our findings suggest that human capital does not play a significant role in ICO success. Interestingly, we found that the number of Twitter followers is significant in relation to ICO success. We believe that herd behavior and a lack of due diligence may explain these results. We open the discussion for further investigation. (Less)
Please use this url to cite or link to this publication:
author
Leuba, Geoffroy LU and Gill, Amrit LU
supervisor
organization
alternative title
The Impact of the Founding Team’s Human Capital on Token Sale Success: An analysis of European ICOs between 2016-2021
course
ENTN19 20221
year
type
H1 - Master's Degree (One Year)
subject
keywords
entrepreneurship, entrepreneurial finance, token sales, initial coin offerings, ICO, information asymmetry, signaling theory, human capital
language
English
id
9085140
date added to LUP
2022-06-20 12:26:14
date last changed
2022-06-20 12:26:14
@misc{9085140,
  abstract     = {{The emergence of blockchain technology enables entrepreneurs to raise capital in an innovative way, by addressing a crowd of online investors without the need for an intermediary. This phenomenon is known as token sales, and it may have the potential to revolutionize entrepreneurial finance. However, information asymmetry is particularly severe in this context, and the need for entrepreneurs to send signals to investors arises as an essential challenge to venture financing. We explore the possible impact that human capital may play as a signal for initial coin offerings (ICOs), a type of token sale. By looking at the education of the entrepreneurial team, as well as the relevant skills of its members, our findings suggest that human capital does not play a significant role in ICO success. Interestingly, we found that the number of Twitter followers is significant in relation to ICO success. We believe that herd behavior and a lack of due diligence may explain these results. We open the discussion for further investigation.}},
  author       = {{Leuba, Geoffroy and Gill, Amrit}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Impact of the Founding Team’s Human Capital on Token Sale Success: An analysis of European ICOs between 2016-2021}},
  year         = {{2022}},
}